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Growth strategy

Category Archives: Growth strategy

Map of Students of Color in Higher Education

By | Cool Analysis, Growth strategy

Do you or your organization serve post-secondary students of color?

We can help you find your beneficiaries! We created a visualization of the concentration and distribution of college students of color for one of our clients. Here’s what we found:

Distribution of Students of Color in colleges and universities
  • The individual bubbles represent all colleges and universities in the US that grant at least a bachelor’s degree.
  • The bubble size shows the total enrollment of all students at the academic institution.
  • The bubble color shows the percentage of students of color relative to all students with dark blue being closer to 0% and dark red closer to 100%.

Turns out you agree: Revenue strategy does matter

By | Cool Analysis, Growth strategy, Revenue Strategy

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.

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

By | Growth strategy

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

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.

Good things come in 3s!

By | Growth strategy, Room40 News

Did we say good things? GREAT things. Check it out: rings in a circus; wheels on a tricycle; feet off the ground (and rising) De La Soul is; blind mice; Stooges; members in Destiny’s Child; ingredients in a BLT… we could go on.

Truly, three is a magic number. So in that spirit here’s a little update on the 3 awesome things that have been happening in Room40.

Growth strategy, baby!

We’ve been working with two amazing organizations:  ioby and Braven.

ioby (in our backyards) is a crowd-resourcing platform that provides neighbors with the tools and support they need to create positive change in their neighborhoods.  (Think: opposite of NIMBY.)  We are helping ioby’s leadership develop a strategy, financial model and growth plan to support 5000 projects a year.  Check them out!

For too long, being the first in your family to go to college also meant you weren’t as likely as your peers to get a good job. Braven is changing this – and attracting a lot of attention in the process!  We are working with Braven’s powerhouse team identifying the best growth strategy for them.

We’re always keen to learn about great organizations looking for help planning their growth or adjusting to having grown.  No surprise, some of our favorite projects have been for friends of friends.  So, don’t be shy: you are an excellent matchmaker.  Introduce us to your favorite nonprofit, we’ll do the rest!

Your on-going quest to find the $$!
(aka, “Can’t we get better at this fundraising business?!”)

We are *this close* to introducing our latest labor of love:  a map and practical guide to all the philanthropy in the U.S., broken down by individual, corporate, foundation with detailed stats for the top 50 metro areas.  And what to do about it.  Yeah, get your head around that:  how much $$ is in Boston, vs. San Fran, vs. NYC (and 47 others…) and how it can help you make better decisions, faster about revenue strategy and annual targets.  This is the data and “how to” that we were sharing via LinkedIn posts last fall.  It’s grown up to be a real (big) thing: data and “how to” you can’t live without.  If you want to get on the “pre-release” list, drop us a line.
Is it just you three?

Actually, no.  We loved being 3, but it couldn’t last forever.  We have a fabulous new Associate Harleen.  She comes to us from Boston College, having just spent a year in the Jesuit Volunteer Corps in LA.  She has a passion for nonprofits, a great sense of humor and incredible tolerance for 40-somethings who think they are wicked smaht, pretty cool and exceptionally funny.  Yup – we found our unicorn.  And we’re looking for more! Know some people who would be a great fit for Room40? We’re all ears.

So, those are our 3… what are yours??  Drop us a line and let us know.  And don’t forget to introduce us to your old college roommate who is on that Board that is looking for a consultant to do a strategic plan.   We’ll tell them you’re still as smart and funny as you were back then.  Promise.

– The Room40 Team:  Anna, Ben, George and Harleen