Behind The Room 40 Name

By | Uncategorized | No Comments

What’s in a name?

A frequent question we get is about our name – it’s a little unusual. We’re actually named after an organization who came together during World War I in Room 40 of the British Admiralty Building. They brought together brilliant minds from various disciplines to understand how to use intelligence to make better decisions, faster.

One of the successes of Room 40 was identifying that a diversity of skills and ideas makes teams more successful, not less. It was this group of naval experts, linguists, mathematicians, scientists, and professors that managed to crack the enemy code.

Their mission was kept so secret that there still aren’t a lot of details about all the volunteers who came together to gather and process information crucial to winning WWI. Fortunately, our Room40 is much easier to find!

We’re thankful to them not just for their name. Without the Room 40’s code-breaking, we would not be able to celebrate today’s 100th year anniversary of the end of the Great War.

The Room40 Group is a consulting and advisory group that works with the leadership of nonprofits to help organizations improve, grow, and change. Like its namesake, Room40 is a place where smart people come together to analyze data, uncover meaning, and progress toward a greater good.

 

Meet Our New Team

By | Room40 Hiring, Room40 News | No Comments

]No summer holidays for us, we’ve been busy searching and finding 3 new recruits for The Room40 Group Team. We’re so glad to welcome these new folks to our team! We’ve gotten bigger which means we can support you better and develop new exciting insights.

Introducing our new lineup:

Associate Consultant Staff Team PhotoLiz Keeffe, Associate Consultant
Liz recently graduated with her MBA in Nonprofit Management and a Masters in Sustainable International Development from Brandeis University. She brings experience in education and community development to the Room40 Group. The Team hopes that her farming experience and love of gardening will save the office plant.

Favorite Place in Boston: Liz enjoys walking along the Charles River with her dog, Tonia.

 
 

Analytics Product Manager Staff Team Photo

Karla Sordia, Analytics Product Manager
Karla brings a unique combination of public and nonprofit experience to Room40. She loves hiking across New England and programming macros in Excel. She has a degree in Economics from the University of Rochester and is originally from Monterrey, Mexico.

Favorite place in Boston: The Minuteman trail, especially along Spy pond, where she walks her dog.
 
 

Marketing and Sales Associate Staff Team Photo
Karena Viehbacher, Marketing and Sales Associate

Karena recently graduated with a Masters in Management from Babson College. She grew up between France and the United States before settling in Boston. Many of her sentences start with “So I was listening to this podcast…”

Favorite Place in Boston: People (and dog) watching from the South End Buttery with a latte and newspaper.

We’re growing – and hiring – and need your help!

By | Room40 Hiring, Room40 News

Hello from Room40!

Things are going great over here. In fact, we’re creating four new positions that will be the perfect fit for someone you just might know. Help us and that perfect someone find each other and we’ll thank you ‘til the end of time. Seriously. Free paperclips every time you come by our office.

We’ve all met those people that make us think, “Wow, I wish I had the right position for you.”  You know who they are— bright, driven, fun to work with. In short, they’re exceptional. You’ve probably met a few of them in your career, but not more than 3 or 4.  Well, that’s who we’re after.

At Room40 we’re known for consulting work that blends the strategy tool-kit honed at top firms with the experience gained as executives at nonprofits ranging in size from $5M to $150M. A growing number of organizations also know us for our revenue and impact analysis— a proprietary, data-rich set of insights that help nonprofits grow, change and improve.

Our team is growing in both areas of our work. We’re looking for

  • an Analytics Product Manager who will dive deep into messy, complicated data sets about nonprofits and their work and later emerge (to wild applause!) with beautiful data visualizations;
  • a Consultant (more senior) and Associate (more junior) to take these insights and help our nonprofit clients use them to change the world for the better; and
  • the perfect Marketing & Sales Associate who can tell these stories far and wide, so that an increasing number of nonprofits learn and improve from our work.

How can you help? We’re so glad you asked! Share the news and help us find those exceptional folks we’d be lucky to work with.  Drop us a note and tell us about them. You won’t be sorry you did. We promise. Paperclips are just the beginning.

All the best,

Ben, George and Anna

The Room40 Group

Turns out you agree: Revenue strategy does matter

By | Cool Analysis, Revenue Strategy, Strategic growth

A stunning 88% of nonprofit leaders* say developing and implementing a revenue strategy would make a significant difference or a tremendous difference for their organization’s long-term success, but only 22% have one.

You’ve heard us say it before: revenue strategy is important.  Like your program strategy, it aligns your organization around a goal, the path to achieve it, and resources it will take to get there.  It sets you up to make the best use of scarce resources as you raise money to support your mission.  (If you’re wondering how program strategy and revenue strategy are different, check out this post.)

Creating a revenue strategy takes time and money – both of which are often in short supply.  So perhaps it’s not surprising so few organizations have one.  But if it’s so valuable, you would expect that organizations would take steps consistent with a revenue strategy, even if they don’t have the resources to develop a full strategy.  There are two metrics that can help organizations allocate their fundraising resources more effectively:

  • $ raised per fundraising FTE, a metric that sheds light on whether raising more money will require more people or more/better support and systems for the people you have
  • Return on investment of fundraising activities, a metric that helps allocate scarce resources among the many possible ways you could raise money

(If you want a refresher on what these are, check our webinar here.)

We asked if organizations are using these metrics and we were surprised by the results:

  • 12% calculate the dollars raised per fundraising FTE
  • 17% calculate the return on investment (ROI) of their fundraising activities

So, what’s going on here?  There’s an approach to organizing our efforts around fundraising that we believe will result in better long-term results, but most organizations aren’t doing it.  There are simple metrics that would move us a step closer to a revenue strategy (and a step closer to best use of resources) but we’re not using them, either.

As data-geeks, that’s a head-scratcher for us.  But we’re astute enough to know that we’re oddballs.  So, it leads us to ask: what conditions need to change for revenue strategy to get the time and attention it deserves?  What can we do as a sector to address this?  A few things:

  1. Awareness.  Like program strategy 20 years ago, revenue strategy isn’t commonly talked about, used, or understood.  It’s hard to find the time, money, and support for something that isn’t common.
  2. Evidence.  With so few organizations using them, there aren’t many stories to tell – yet.  And if you’re looking for irrefutable evidence, that’s even harder to find.  Our instincts and experience tell us its important, but we’re short on evidence and success stories.
  3. Support.  Until Foundations and Boards understand the value of revenue strategy and are willing to support an organization’s pursuit of one, nonprofits will be hard-pressed to find the time or dollars to do it themselves.  It’s just the harsh truth of nonprofits’ access to resources, and the power of the gatekeepers of those resources.
  4. Availability of expertise.  Throw a nickel and you’ll hit a dozen nonprofit consultants (including us!).  How many of those do revenue strategy?  Not many.  And what they mean by “revenue strategy” is different from one to the next.  So, even if you have the support of your Board and the funding to do it, it takes some effort to find someone to help with this, and your options may be limited.  (We’d be happy to help!)

We are thrilled to see agreement on the importance of revenue strategy.  We are saddened to see how few organizations are taking steps in that direction.  But where there is a gap, there is opportunity.  We’re committing ourselves to addressing these barriers to revenue strategies so that organizations make the most of their fundraising resources, enabling them to do more good in our world, sooner.

If we’ve piqued your interest, but you’re wondering “what is revenue strategy, anyway”, stay tuned.  That’s our next post.

Yours in pursuit of more revenue,

Anna, Ben, George and Harleen, aka The Room40 Group

* We hosted a webinar a couple weeks ago all about the importance of Revenue Strategy, what it is, and a couple of steps you can take to get started.  GuideStar was kind enough to host it for us.  We had over 250 attendees.  The stats in this post are from questions we asked during that webinar and in a follow-up survey.

ICYMI: Our webinar “Too little revenue, all the time?”, hosted by GuideStar

By | Revenue Strategy | No Comments

It was a busy Monday, so we don’t blame you if you missed it!  We put on a great webinar on the importance of Revenue Strategy, what it is, and a couple of steps you can take to get started.  GuideStar was kind enough to host it for us.  We had over 200 attendees.  Not bad!

We know your day doesn’t stop just because we are hosting  a webinar.  So, here it is for your watching and listening pleasure.  Enjoy!

Yours in pursuit of revenue,

The Room40 Group

Want a great strategic plan? Pay attention to the process.

By | Uncategorized

Greetings from Room40,

The other day, I was asked what makes a great strategic plan.  I had a one-word answer, “Process”.  Not process for the sake of process – we don’t have patience for that.  Process that engages stakeholders, creates space for data and analysis, allows for iteration and sets up for testing and refining.  It’s a slightly odd answer from a bunch of self-professed data-junkies who like better decisions faster.  Not a lot of room for “process” if you’re oriented that way.  And that’s exactly why it’s important and is central to our approach.

“So, data-junkies who value process, what is this approach you’re talking about?”  We’re so glad you asked.  Here it is.  As always, if we can help you and your organization improve, grow, and change, drop us a line.

 

Seven Habits of Highly Successful Strategic Planning Processes
(I hope Steven Covey doesn’t get mad at us for that.  We’re just trying
to be funny.  How bout we just use SHHSSPP for short?)

Here goes…

SHHSSPP

1. Engage people.  There are no great strategies, just strategies well implemented.  One of the most critical steps in maximizing impact is getting your team on board by involving them in the process.  We balance input and perspectives from national and local leadership at the staff and board levels, front line to executive, program to back office.  We build this in from the beginning to get important input, educate and empower those involved, and create support for the plan as it is developed.

2. Write your narrative. We start the project by defining the narrative for the organization: Where are we today? Where do we want to be tomorrow? What is our vision of the future? This simple, short story will align your leadership on the front end and ground future conversations with staff and stakeholders on the important values and vision underpinning the organization’s next chapter.

3. Develop a hypothesis. Next, we help you develop a strong and testable hypothesis for how you will move from today to tomorrow. This will help us identify and prioritize the most critical decisions you need to make, and the specific data we collectively need to validate (or improve) the hypothesis.

4. Conduct analysis.  With the narrative and hypothesis to guide our efforts, we overlay quantitative and qualitative data, judgement and opinions to inform, validate and revise our thinking.  We conduct both internal analysis (programs, operations, financials) and external analysis (competitors, partners, geographic fit, funding options). Our Internal work builds on what you already know about your organization, supplemented with interviews and additional analysis. Our external work brings to the table new research, data and analysis about different the different opportunities and challenges that shape the context for your work.

5. Create scenarios.  The narrative, hypothesis and analysis come together to inform your organization’s decisions about its future.  To facilitate the decision-making, we believe in the power of developing several scenarios that offer distinct and competing views of what the organization will be doing in the future.  These scenarios will be intentionally provocative.  They elicit reactions that help us identify what will be embraced and challenging among the options. They open up a conversation about why.  It’s not unusual to like the reach of one scenario, the depth of another and the funding model of the third.  Some things are incompatible. Others can be integrated. In the end we can’t do everything and so we’ll have to choose.

6. Put together the plan. With the future vision decided, we develop a plan for how to get there informed by all we have learned about the organization and its external context.  This becomes the document that guides you internally and rallies your supporters externally.

7. Get ready for Implementation and change management.  Finding the “what”, or answer, is only the beginning. Arguably, the harder work begins with the “how”, or changes in behavior, staff, systems, and process… and that requires a clear articulation of the “why.” We can’t do that for you, but we draw on our executive experience leading similar efforts, our wins and our failures, to help you do it better.

Tah-dah!  Just like that.  Drop us a line if you have questions or stories to share.  We’d love to hear from you.

Yours in pursuit of HSSPP,

Anna, Ben, George and Harleen
aka Room40

We need to talk. It’s about revenue.

By | Philanthropy, Revenue Strategy

Ever notice that nonprofits dedicate many hours (and many dollars) to developing their programmatic strategy?  It’s a big change from 20 years ago – and it is usually time and money well spent.  But, nonprofits rarely do the same for their revenue strategy.  “Their what?”, you might say.  Exactly.

Organizations spend too little time on revenue strategy – what they will raise, how they will raise it and why, with limited time and money. This was our big “ah-ha” towards the end of 2017. We don’t have to tell you revenue is a big issue; you tell us all the time.  Somehow, every conversation comes around to revenue.  It either starts there or it ends there.  It’s inescapable.

Here’s a critical observation that will help us start to crack open the issue of “too little revenue, all the time”:  Nonprofits are in (at least) two businesses.  What does that mean?  Why does it matter?  And what does it have to do with revenue strategy?  We’re so glad you asked.

Two businesses?  What does that mean?
It’s tempting to think of your “business” as your programs.  It’s what you exist to do: feed the hungry, teach the children, provide services to those who need them most.  There is a set of activities (with associated costs) and a set of beneficiaries.  Your program staff and all the people that make their work possible (IT, HR, Finance, Accounting) are part of this “business” that serves your clients.

But look around your organization and there are other people (and costs) that are not directly serving your beneficiaries. They are engaged in different activities: planning galas, developing relationships with donors, submitting grant applications and reports, advocating for public funding, and on and on.  Their “customers” are different, too: individual donors, institutional funders, hosts and guests at your fundraising events.  They aren’t soliciting your clients (unless you are a college, university or hospital); they are engaging with an entirely different population, including individuals, corporations, foundations and public funding sources.

The fact that they are doing different things (costs) for different people (customers) than your program staff means they are in a different business.  Namely, raising money. So, yes, your program is your “business”, but it’s only one of your businesses.  Raising money is also your business – your second business – and it’s an important one!

There is a handy 2×2 from Bain & Company that illustrates this business of two businesses. It is generally used in the for-profit context but it applies to nonprofits just as well.  (Did you think the dawn of 2018 stripped us of our love of 2x2s??) High cost sharing and high customer sharing = one business. Low cost sharing and low customer sharing = two businesses.


Two different customers, two different sets of costs = two businesses.  Why does it matter?
Different businesses have different goals, require different activities and resources.  Knowing what it takes to run your programs and how to do it isn’t the same as knowing what it takes to raise money and how to do it.  (In case you hadn’t noticed, this is why the ED job is so dang hard!)  You’ve probably intuitively known you’re in two businesses for a long time.  Being able to describe your businesses, you can start assessing their needs and results with greater clarity and efficiency.  Instead of a two-headed monster, you can see you actually have two monsters! You can differentiate between an investment in one and an investment in the other and the return on those investments.

What does all this have to do with revenue strategy?
Strategic plans are all about allocating limited resources.  They tell you what to focus on (and what not to).  Organizations with programmatic strategic plans have a clear argument for resource investment on the program side.

Just like your program strategy, your revenue strategy clarifies what you are doing with limited time and resources, how and why – for your revenue business.  Taking the time to develop a plan, including a good hard look at your philanthropic potential compared to your own performance and that of your peers, will help you decide where to invest, which activities to spend your time on and what to say “no” to.  It will help you see if your goals are achievable and make the case for the resources you will need to achieve them.  It gives critical context to your tactics, allowing you to justify the investment required to reach your goals.  Now, doesn’t that sound dreamy?

We’ve been helping clients with organizational strategy for years.  It’s all about programs and operations.  More recently, we’ve been working with organizations on revenue strategy, within the context of growth or program strategy, but increasingly as a standalone issue.  It has been eye-opening for us, and for them. So far, we’ve found investing in revenue strategy with the same diligence and rigor as a program or operating strategy yields a high return… staff, board and funders can more clearly articulate your mission, resources are allocated more efficiently, and oh yea, you raise more money.

If one of your businesses has a strategy and the other doesn’t, it’s not hard to imagine that goal-setting, resource allocation, and decision-making is going to be easier in one than the other – and the one without will suffer.  Our hypothesis:  We can’t escape the land of “too little revenue all the time” without addressing this imbalance – without a revenue strategy.

So, there you have it.  Our ah-ha from 2017 and our early thinking about revenue in 2018.  Next week, we’ll ask for your perspective.  What do you think?  Do you agree revenue strategy is important?  Do you think we’re just plain crazy?  Keep an eye out for a survey.  This is too important to be a one-post topic!

Yours in pursuit of revenue,

The Room40 Group

Know before you grow

By | Growth strategy

Whether you’re growing a local program or expanding to a new state, there is so much to know before you grow.  What program will you offer?  Where?  To whom?  How much staff do you need?  How much will it cost?  Do you have support of your Board, your partners, your funders, your volunteers, your staff?  Some questions are easier to answer than others.*

One question you rarely hear:  how much money is there to support my growth?  Sure, you might hear “will funders fund me?”, but never: “how much money is out there?”  Why don’t we ever ask how big the pie is?  Well, because no one knew!

Until now.  We mapped all the philanthropy in the U.S.  We know that 60% comes from the top 50 metro service areas (we call them “markets”); 90% comes from all 381 markets in the U.S.  And we can give you the detail on it.  What’s amazing is not the data (though it is pretty cool!), it’s what you can do with it.

“So, how do I use The Map?”  Here’s a typical story of an organization using the data to make better decisions, faster:

Our Favorite Educational Nonprofit (OFEN) was in three cities and growing.  They had an ambitious plan to expand in Boston, investing in physical space, staff and outreach.  Ultimately, they had visions of serving the whole region – the need is everywhere, and OFEN’s program is proven to help.  The Board and staff were itching to grow faster than their plan.  An opportunity presented itself in western Massachusetts, just an hour outside of Boston.  It was consistent with their mission and program.  The overwhelming urge was to go for it.

The ED knew what he needed to raise to fund his Boston expansion.  It was an aggressive target, increasing OFEN’s fundraising by a significant percentage year over year to fund a capital campaign and significantly higher annual operating expenses.  With some quick back-of-the-envelope calculations, he estimated it would take $500K annually to run the program in western MA.

Then he asked the critical question:  How much philanthropy is in western MA?  Looking at The Map, Boston is the 10th largest philanthropic market in the country at $6.9B.  No other cities or towns in Massachusetts show up in the top 50.  The smallest, #50 Providence, RI, is $1.1B, or 16% of Boston.  All the dots west of Boston are far smaller than Providence – so small, they are hard to see.  Think of the dots as dollar signs… and there aren’t many.  (Go ahead, click on the map to get a good look.)

 

 

He took a quick look at what peers were raising on an annual basis and the answer was clear.  Funding the start-up in western MA would require support from the Boston philanthropic community.  That means staff time, potential prospects and dollars diverted from the big push in Boston.  And, likely, it would require on-going support as well.

With this answer, the ED went back to his board: “If we do this, we slow down Boston.  Let’s focus on Boston and revisit in a year.”  It was an unpopular decision – until he shared the data. 

The data and approach OFEN used to come to a better decision, faster is captured in The Map of Opportunity: A Practical Guide to Philanthropy in the U.S.  It’s available on our website.

Let’s be honest, sometimes you have a chance to really plan ahead; other times, not so much.  Either way, take the time to know before you grow – use The Map to answer that all-important question “Where is the money?”.

Need help along the way?  Just holler.

Yours in pursuit of better decisions, faster,

Anna, Ben, George and Harleen, aka The Room40 Group

*With experience as nonprofit executives and strategy consultants, we specialize in answering these sorts of questions.  Want some help? Let us know.

We found a partner in crime!

By | Room40 News

We found a partner in crime!  A soulmate!  Our better half!*

We’d like to introduce our new BFF:  GuideStar. We share a love of data and analysis, travel, sunsets, long walks on the beach…  oops.  I mean, commitment to data innovation and data distribution resulting in nonprofits making high-quality, data-informed decisions.

GuideStar is the world’s largest source of information for nonprofit organizations.  Working together, we will create valuable tools, informed by data, for the nonprofit sector.

The first result of our collaboration is The Map of Opportunity, showing the distribution and concentration of philanthropy across the U.S. – and how to use the information to raise more money.  If you haven’t seen it yet, check it out.  It will change the way you think about how much you can raise for your organization.

“We strive to provide data and analysis to help nonprofits make better decisions,” said Adrian Bordone, vice president for strategic partnerships at GuideStar. “Our collaboration with The Room40 Group is a sensible step in this direction by strengthening fundraising strategy and execution.”

Partnering with GuideStar will raise the awareness of our work and help us build a community of nonprofit leaders who value data and learning from each other – which only makes our work better (and more fun).  So, yes, we’re a bit smitten.

We look forward to sharing the results of our collaboration with you.  Stay tuned!

Yours in pursuit of better decisions, faster,

Anna, Ben, George and Harleen
aka The Room40 Group

 

*Yes, that’s hyperbole.  We don’t actually commit crimes.  And we’re not leaving our spouses to run off with GuideStar.  We’re working with GuideStar to promote great tools for nonprofits, informed by GuideStar’s data and our analysis.  It’s a working relationship we all believe will improve the sector.

 

Show me the money!

By | Cool Analysis, Philanthropy, Room40 News

Yes!  We will show you the money!  The Map of Opportunity: A Practical Guide to Philanthropy in the U.S. is for sale!  Get your very own copy for $495 (individual) or $995 (organization).  Click here to buy it now.

The Map of Opportunity reveals:

  • The distribution of philanthropy across the U.S.
  • How much money is in each of the Top 50 markets
  • Practical advice for raising more money

The Map of Opportunity is an 180-page report presenting never-before-seen data on philanthropy in the U.S.  You will see how philanthropy is distributed across the U.S.  You will get detailed information about philanthropy in the Top 50 markets, from NY, NY to Providence, RI, including:

  • How much philanthropy is from Foundations, Corporations and Individuals in each market
  • How philanthropy is distributed across the counties in each market
  • The top 10 Foundations, Corporations and Zip Codes for individual giving in each market

The Map of Opportunity pairs this critical data with easy to follow how-to guides to help your organization use the data to raise more money.  We show you how to:

  • Create a shared understanding of your philanthropic market(s) within your organization
  • Assess the long-term potential of your market(s) and others
  • Set revenue target(s) for the coming year

Get your copy today.  You won’t be disappointed.

The Map of Opportunity:  Philanthropy in the 381 Metropolitan Statistical Areas in the U.S.

Yours in data and insights,

Anna, Ben, George, and Harleen
The Room40 Group

[Psst…  not convinced yet?  Check out a free download of the Executive Summary and a couple pages of each section.  Take a peek and then buy the other 160 pages with confidence.]

Who is the Room40 Group?
A consulting and advisory group, we work with the leadership of nonprofits to help their organizations improve, grow and change.  We created the Room40 Group to help nonprofits combine data and learning from peers in pursuit of better decisions, faster.

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