Video: Growing Smarter: Strategies for Scaling and Sustaining Long-term Success at Your Organization | Duration: 3636s | Summary: Growing Smarter: Strategies for Scaling and Sustaining Long-term Success at Your Organization

Transcript for "Growing Smarter: Strategies for Scaling and Sustaining Long-term Success at Your Organization": Welcome to today's webinar. We're gonna be discussing strategies for scaling and sustaining your organization. Before we begin, I'm gonna go through a few housekeeping items, especially if you're new to our platform. We use a platform called Goldcast to broadcast webinars here. We're really enjoying it. I see a lot of you already active in the chat, so please keep that up. You're welcome to drop messages in the chat to us, or there is a q and a tab. All of these are part of the engagement panel that you should see, I believe, on the right hand side of your screen. You'll notice right now there's chat, messages, docs, which is where you can find resources like the slides for today that Stephanie is gonna go through. So if you wanna go ahead and download those now, go ahead and do that. You can also submit questions in the q and a tab. When we push polls live for CPE credits, which I'll go through in just a minute, you'll see that pop up both here in this engagement tools tab and then on your screen where the slides are. And we'll verbally cue you that those are gonna pop up. If you would like CPE credit, do respond to those. I'll go over this again in just a minute. But you should not see the polls tab right now because we don't have any live. You will see it momentarily. Alright. Really quickly, we do have one of our representatives, Lauren, on the line today. Lauren, if you don't mind, yeah, popping and saying hello. If you'd like to chat or message with her, she's an extension of our sales team. If you are interested in working with Blackbaud, Lauren, it's the fastest way for you to find out information specific to your organization, and set up a meeting to find out about demos and pricing. And she is typically, available for, like, a quick 15 minute chat and then can get you connected with someone as quickly as the next business day. So thank you for joining us, Lauren. Alright. And last thing before I get to see customer and have any questions about anything, just with the volume of chat messages, those are difficult for me to track. So I have a link to support right here. Highly recommend messaging them. They're very quick and responsive. Alright. And then lastly, if you're hoping to get a CPE credit today, we are offering one credit. The requirement for that is that you stay on the full time. I do track that, and I do check for that 50 minute mark. So please make sure you're staying on. If you're having any Internet difficulties or anything like that, the system does track when you originally log on. So say you need to refresh your browser or something like that, or you switch to your phone, we actually can track and see that you stayed on the whole time using your link. So no fears about that, but just please make sure you stay on the full time, because I do check to make sure you hit that full 50 minutes. We will 3 polls today. Stephanie and I will verbally let you know those are live, and you should see them on your screen. But make sure that you respond to all 3 of those because I do check that as well. If you run into any issues, you may send me a direct message or you can put a comment in the chat. We'll be keeping an eye on that, so no worries. And the last thing on the polls, you don't have to click a submit button in this platform. You just press your answer and the system logs it. So I know that gives folks some pause. Sometimes there's no extra step. Just click your answer and the system will will register that for you. Alright. So let's get to the fun part. Stephanie, I'm gonna go ahead and kick it over to you to introduce the topic and yourself and the agenda and get started today. Sounds great. Thanks, Sarah. I'm so glad to see everybody here today. I saw a couple people pop up in Buffalo, New York. That's where I am. So today we're talking about strategies for scaling and sustaining long term success. So what does that actually mean? Well, we're gonna talk about 3 different things today. 1st, we're gonna talk about, assessing the ROI of our program. So really, when we're thinking about, scaling, we're gonna think about our expenses. The next thing we're gonna talk about is strategies for diversifying and scaling funding. So again, when we're thinking of scale and growth and sustainability, we're thinking revenues. We're gonna tap into revenue there. And then finally, we're gonna talk about building a roadmap for mission aligned growth and long term success. And here's where we're gonna kinda pull it all together and think about, alright, how do we build a forecast or roadmap to this this strategy and scale that we are looking to achieve? So first of all, I'm Stephanie Skrzowski. I'm a non profit CFO for about, almost the last 2 decades. And my company is called 100 Degrees Consulting and we provide, fractional CFO and bookkeeping services to nonprofits around the world. So I've been doing this for a really long time, and I'm super passionate about nonprofit financial management. And so I'm really excited to talk to you all today. So the first question I have for you, we have a poll that Sarah is going to pop up on the screen. What is your organization's biggest challenge when it comes to growth? Whoops. This looks like it is a different poll question. Sarah, if you don't have that first poll question, we will keep rolling. Okay. So let me pop back to that slide. So what's your organization's biggest challenge when it comes to growth? And just drop an a, b, c, d, or e into the chat. So take a look at these. Is it a, assessing your program impact and your ROI? Is it b, diversifying your funding sources? Is it c, aligning your growth with your mission? D, scaling ops? Or maybe e, something else entirely that is a big challenge when it comes to growth? Okay. Y'all are amazing. This chat is going so fast. I'm seeing a wide variety here. I'm seeing lots of c's pop up, a's and b's. Oh, I see some e's. I see Alicia has c, d, and e. Okay. So we are going to talk about a and b today, maybe a little bit of c, and we'll see if we can get to any any surprise e's, if there's something else that's really challenging for you when it comes to growth. Awesome. Thanks everybody. Lots of c's. Okay. Cool. Alright. So when we are talking about growth, one of the things holding us back is around our financials. Right? So the average US nonprofit has just 2 months of cash on hand. So if we only have 2 months of cash in the bank, it makes growing and scaling sustainably very difficult. Right? We also have growing expenses between inflation, the increased need for our services. That is driving up expenses which make it really hard to do the work and to scale and grow the way that we want to and need to. And then finally, revenue is shifting. Right? Since 2020, I have seen funding streams shifting, drying up, and there's an increased competition for funding. And so these are all big challenges when it comes to scaling and growing our organizations. But it's super important to continue to grow. Right? 40% of nonprofit leaders cite financial sustainability as their top challenge to growth. That's why it's so important for you as the finance people inside your organization to really take an active role in helping guide that strategic discussion around growth, around scale. You know, the modern CFO is not the old school number cruncher CFO. Right? We should really be strategic partners in driving the growth and promoting sustainability. And so that's why we're having this conversation today, not as, you know, program people, but as finance leaders. And, you know, oftentimes, as the landscape in our organizations, in our sector is changing, we're expected to adopt a for profit strategies. Right? Looking at performance measurement, looking at financial ROI, really thinking about diversified revenue, and that's not necessarily a bad thing. I think that can be a really good thing, but we need to make sure that we have a grasp on all of that so we can be an active part of these conversations. So the first thing that we're gonna talk about today when it comes to growth and sustainability and scale is assessing ROI. So we're really talking about our expenses here. And so if you're thinking to yourself, wait, what is ROI? Like we're nonprofit, what does that actually mean? So ROI or return on investment really measures the value generated by a program relative to its cost. And so we are looking in our nonprofits not just financial ROI, but also impact ROI. Right? So some examples of that, think about your own organization. What is your mission? What is the impact that you are trying to have? Maybe it's number of lives changed. Maybe it's an amount of resources saved. Maybe it's increased community engagement per dollar spent. Right? Everyone on this call may have different, you know, a different impact ROI, but we all have something that we are measuring, right, in addition to financial. So why is this important? Why is this number, why is calculating our ROI important? Well, first of all, we can justify the way that we're allocating resources, the way that we're spending our money to our donors, to our funders, to other stakeholders. Right? We can also use this to help make strategic decisions around prioritizing programs. Right? Which programs have the highest impact? And if we want to, if we're thinking about growth and sustainability, maybe we're thinking about doubling down on what is really working. Right? Rather than trying a whole bunch of new things, let's double down on what's already working, what's having the biggest impact. Calculating your ROI can help you get that, you know, get to that point and make that decision. We can also use this calculation to really identify opportunities for improvement. Right? Maybe if there's not a lot of programmatic ROI with a particular program, but it's important to our mission, that would help us identify, like, we need to import some more resources here. Right? So it's all about decision making and, justifying the way that we're spending our money. So finance team. How do we help drive this ROI analysis? Right? Because like I said, this is not a decision just for the executive leadership or just for the board or just for programs. Finance really has an important role in driving this ROI analysis. So first of all, the data collection and the analysis. Right? We are numbers people. So we have all of the expense data at our fingertips in the accounting system, and then we have to pull in the programmatic data to go along with it. But we've got all of the finance data at our fingertips. We can also help define metrics. Right? So, I really love an organization where the finance team is a collaborator across all departments, not just, you know, sitting in the back office crunching the numbers. We are part of all of the important conversations in the organization. So collaborating with the program team to define metrics. The 3rd piece, we can help standardize reporting. Right? We are really good at reporting. This is what we do every day, every week, every month, so we can help create, standardized reporting for ROI. And we can help provide insights to leadership, to the board, for decision making on what programs do we wanna continue, what do we maybe need to phase out. And so how do we actually measure ROI? Right? Well there's a handful of different metrics that we can look at, cost per outcome, community reach, impact per dollar. But the simplest way that I really like to start is by using looking at an income statement by program. Right? And so from the accounting system, we can pull, an income statement that breaks down our expenses by program. In this example, I've just got admin, fundraising, and programs. But typically, you would have a column for then each of your programs. So we'd really easily be able to see the cost per program, and then combining that with the programmatic data that you get from your program team, whatever the impact was, the number of lives, the number of children taught, whatever that might be, and just do some simple math. Right? So here's an example, very simple example of an after school tutoring program. So the cost for this program was, $50,000 that's staff salaries, materials, space. Right? We're including like a portion of the operating expenses of the organization into the cost. Then we're looking at outcomes. Okay. A 100 students improved their test scores by 15%. So our ROI calculation is our cost per improved students. So we're just taking 50,000 divided by a 100. Right? Very, very simple math here. We just need the right data inputs. So we're saying compared to similar programs, maybe this organization has similar, similar programs, this is doing really well. This is really efficient. Let's consider scaling this. Right? So what do our ROI results tell you? Right? When you do that math, when you pull your income statement by program, look at your total cost, then look at the impact that you're having with hopefully programmatic data that you've that you've gathered from other team members, do the very simple math, this will help us think about which programs are delivering the most impact for the resources invested. Right? So where are we getting the most bang for our buck, in other words? Right? Where can efficiencies be improved without sacrificing outcomes? Right? Are there line items that we can save on the expense side of things without damaging our impact? Right? So basically getting even more bang for our buck. Or what programs might need additional investment or restructuring? So one example, I think of one organization that I worked with, they had like programs in 7 different cities in the US and one of those cities was just not performing super well. They weren't getting the impact. They were continuing to pour resources into it, and they had to make the tough decision. Okay. Do we continue to pour resources into this one particular program or do we decide to funnel those resources into more impactful programs? And it's a hard decision. Right? Because there were still lives being impacted by that program, but when they were thinking about how to best allocate the limited resources that they had, they made the decision to shut down the program and reallocate to more effective, more impactful programs. So it could really help you make decisions instead of letting a program just sort of eat up, you know, eat up funding and not really have the impact that you wanna have. Calculating and assessing ROI can really help you make really good decisions. So we can allocate resources strategically when we have this information, we can scale impactful programs, and we can also communicate the value to our funders. Right? I feel like we've all seen those, you know, probably most of you have some sort of annual report. Right? And we all love to communicate in some way, shape, or form the the value and the impact that a donor's dollar has on the organization. Calculating this number can help you do that really effectively and accurately. And I just wanna like bring it back to the finance team and just emphasize that like we are central to all of this. Right? We have the financial data. We have the, analysis skills, and that can, you know, we can then provide the insights and help drive action. We are at the center of all of this. Right? This is super important for the finance team to be involved. And I would really encourage you that if this is not part of your organization's, you know, current processes, whether it's quarterly or annually or maybe when you do your strategic plan, whatever it might be, I would encourage you to proactively bring this up, take the initiative to calculate your ROI. So with that, now I have a question for you. Now the poll is gonna come up. How often does your organization evaluate program ROI? So I think some of y'all jumped on this poll very quickly when it popped up earlier, but now is the time to answer. How often does your organization evaluate program ROI? So our options are regularly, occasionally, rarely, we haven't prioritized it, or never. And I see, a question oops. Sorry, Sarah. I was just gonna say really quickly while we're waiting for this to come in, this will count as the first out of the 3 CPE polls. So, the first one was a miss on my part. My apologies. This is the only one you need to worry about answering so far. And yes, we do have a question in the chat. Yes. And I will just say, Mark, no, there's not an enter button. I think you just click it. And for those of you that are, typing your answer in the chat, just make sure you answer the poll too because I think that's where Sarah can can keep track of you. But to answer the question really quickly before we move on, Tracy asked, what do you find to be the best way to calculate how much indirect to apply to a program? That's a great question. Sarah linked a, a white paper, that compares methods. But I think, you know, it depends on your organization. I like to do sort of a broad analysis of our administrative expenses, our operating expenses for the organization, and then allocate those proportionately to our programs. And so, you know, if a program is, you know, comprises 70%, then I would potentially allocate, you know, 70% of those admin costs to that program, if that makes sense. And so there's also, you know, the the government, indirect the de minimis, indirect rate from the US government is 10%. And so adding 10% onto the program, to the program cost is often a safe way to do that as well. So let's keep rolling. And, Sarah, do you have to close it or can I just keep going? Keep going. I'll leave it open for just a second. Okay. Perfect. Alright. So we just talked about expenses. Let's move on to talking about revenue. Right? We're talking about diversifying and scaling funding streams because it is not sustainable to have one revenue stream. Right? We need to make sure we've got funding diversity. So obviously, we all know this. If we have a single source of income, that is very risky because what if that goes away? I have seen it happen and it is catastrophic. So we also wanna have greater stability during economic shifts, right, or even like donor fatigue. I was gonna say economic shifts thinking about a pandemic 4 years ago. And those organizations that had, a lot of revenue diversity were a lot more stable during that time than organizations that relied on just a couple sources. It supports long term growth. Right? We can strategically invest if we have money coming in from a lot of different sources. Right? Because maybe there's not restrictions on everything. Maybe we've got more unrestricted money to, to test and try new initiatives. Right? So that revenue diversity helps us expand that way as well. And we've got more credibility with our funders and donors, by showing that we've got some resilience. Right? We are not just bringing in revenue from one source. Again, I have seen this happen. I have seen organizations, lose funders because they were too reliant on 1 or 2 different sources and the funder didn't like that. They were like, well, if something happens, your organization is at a high risk and I am not going to invest there. So the first thing that we want to do when we think about our revenue diversity is first do some quantitative analysis. Right? Let's look at our income statement. So with our income statement, we wanna we can very easily see you. Right? Because our income statement is broken down our revenue by source. We have foundations and grants, individuals, government, etcetera. So we can really easily calculate our revenue diversity simply by taking one of the line items, one revenue stream divided by the total and that tells us, you know, how much is coming from that particular source. Right? And so this definitely varies based on your organization. Maybe in this case, foundations and grants comprise 54% of the total. Well, if that was one grant in there, I would probably be concerned that over half of their revenue is from one source. But if within this line item then there's, you know, a whole bunch of different grants, then maybe I wouldn't be as concerned. So I think it's definitely that quantitative piece but also a little bit qualitative too, in just digging a little bit deeper. So when we think about our revenue streams, I also do like to do a bit of a qualitative analysis. Right? What is working well with our revenue? What is not working well? And what I mean working well and not working well. Maybe you've invested in a grant writer who is, you know, who's who's writing grants left and right, but you are not winning anything. You are not getting grants and it is not really aligned with the investment of time and resources that you're making. So that's probably not working so well. On the other hand, I work with an organization that is just killing it with their grant game. They are getting 6 and 7 figure multi year grants left and right, so they are doubling down there. Individual giving, for example, is not their strong suit. So it's not like they're hiring an individual giving manager to try to ramp that up. They're basically just doing more of what is working. Right? So I always like to, really you know, take some time to think about this. Now is a perfect time. We're doing this, live at year end in December, and so now is a perfect time to assess like what really worked well this year when it comes to revenue, growing your revenue streams, diversifying your revenue, and what has not worked, you know, quite as well. So we're gonna go through next a handful of, of different types of funding. I'm gonna move quickly. You do have these slides, so that if you want to go back and as you're thinking about what worked well this year, maybe what didn't work so well, you can go back through these slides and think about, you know, what might be some opportunities for us next year. Okay. So some areas where you might be bringing in funding right now, grants. Right? Maybe it's government grants, foundations, corporations, any other grant making entities whose, you know, values and their mission aligns with yours. So grants may be a big line item in your, in your income statement or maybe not. Individual donations, right? So growing this might entail cultivating relationships. Maybe you all have a strong individual giving program at your organization. You know, there's crowdfunding, online platforms. Today, we're doing this session on Giving Tuesday, so there's a lot of individual donations, happening right now. Corporate partnerships. I have seen, several organizations lean heavily into corporate partnerships with businesses that share the same values and goals as their organization. I think of an organization that has a strong focus on travel and they have partnered with major major trebel related brands to get donations, to get in kind, to get just straight up funding. And so thinking about corporate partnerships as an opportunity for growth as you're thinking about diversifying. Special events. Right? I personally, I feel like I don't know about all of you other finance people. I sort of have a love hate, relationship with special events only because they take so much time and, and money. Yeah. That's a great comment. A very well managed event definitely brings a good result. Agreed. And it could be a really great way to build community. And so I think, assessing the ROI of your events is also a great thing to do. And I didn't mention this before, but really assessing the ROI of any of your revenue streams in addition to assessing the ROI of your programs is really important to understand the resources that you're pouring in. Are you getting the result that you want? Government contracts. There are a lot of government agencies, that you know, that have grants and money available. It can be difficult to manage and it can also be game changing in a good way for a lot of organizations. So that could potentially be an opportunity as well. And then the last area that I just wanna talk about that I think is really interesting as we're thinking about diversifying revenue and building sustainable revenue streams is earned income. Okay? So, you know, when I think about, you know, when I think about sustainability, I think in general, a grants, you know, grants are fine, but they have an end date. Right? They are usually for a finite amount of money with a beginning and an end date and oftentimes come with a lot of restrictions. So if we want something that is more sustainable, that's going to help us scale, I'm seeing a lot of organizations really thinking about earned income. And so this is revenue that you are generating through, you know, selling some sort of goods or services. And I wanna share with you some examples that I'm seeing that are really interesting, still tied to the mission, and working really well. So fee based services. Does your organization have some sort of IP, intellectual property, where maybe you have a framework or a training program or a workshop that, that you do that you could then, you know, put on for other people for a fee or license out? I'm seeing, I'm seeing a lot more conversations around licensing IP as an earned income stream for nonprofits. Product sales. Right? Do you have any merchandise or books or digital products or any educational materials that your organization could, potentially sell. This could be again a maybe it's a smaller revenue stream but it's sustainable, reliable income coming in every single month. Rental income, do you have a facility? Is there space in your facility that you could potentially rent out? Maybe you have some specialized equipment or technology that could be a source of income for you as well. Again, maybe these aren't going to be, you know, these massive revenue streams, but, they could be the key to building sustainability with consistent funding. Membership programs, Charity Water, for example, has several memberships that offer different benefits to members as well as serving the organization, so that's kind of interesting, giving your stakeholders, your audience a sort of insider, like insider view of the organization through a paid membership. Licensing, I did mention, a minute ago the IP, but Khan Academy, for example, provides free online educational resources and courses and then they've licensed all of that content to schools, organizations, other platforms, to reach a broader audience. So that is, that's a really interesting opportunity as well if you've got that IP that could potentially be, that could potentially be licensed. Social enterprise ventures, I've seen this in a lot of different ways, but this example that I found, Greyston Bakery, produces baked goods while providing employment and job training opportunities to individuals that are experiencing homelessness or that have criminal records. And so, that is part of their mission and then they also sell their baked goods. So lots of different lots of different options here to diversify your revenue, and my intention here was to kind of get you thinking create creatively. Right? I feel like sometimes in our sector, we are sort of, you know, stuck in like let's do things the way we've always done it, but I'm seeing a lot of organizations really get creative and experiment with new revenue streams, new activities that could again help lead to greater sustainability and help lead to growth. Okay. So how do we evaluate new funding opportunities? Here's what you don't wanna do. What you do not want to do is start trying 15 different new things all at the same time, spreading your resources, your team and your money super thin because that is not going to have the impact that you wanna have. Right? We don't wanna just, you know, go after every single grant that maybe perhaps could offer us money, because we really wanna focus on those that are most aligned with our mission and our ability to deliver it. Right? Like, we don't wanna get a grant and then realize, oh, jeez, we do not have the staff to be able to do this. And I'm seeing like, Tammy, yes, perfect question. New revenue streams and new things, be careful not to get into mission creep. Exactly. It's very easy to get tempted by the money. Right? When it feels like money is a scarce resource to just jump on any opportunity, but we really wanna make sure it's aligned with our mission. We also, when we're evaluating new funding opportunities for revenue diversification, we wanna think about the ROI. Right? I mentioned this when I talked about events, we wanna think about the investment required, both time and money, compared to the expected revenue. Right? Like I saw an organization who put countless hours into this event, you know, a sort of fundraising event, countless hours in addition to maybe like a $150,000 in, in cash to to put on the event. And at the end of the day, they netted like $30. Right? And so when you factor in not only the cash expenses of a 150 k, as well as all of the staff time and energy that went into it, was that 30 k that they netted worth it? I don't know. Maybe it was for them. Right? There could there could be a case argued that it was worth it, but there could also be a case argued that it was absolutely not worth it. Right? So we need to think about the, the potential ROI. What is the feasibility? Right? When we're thinking about new opportunities for revenue, what is the feasibility for this? Have we crossed all our t's and dotted all of our i's when it comes to legal considerations. Right? If you're thinking of a licensing deal, for example, that can be very expensive to get all of the legal ducks in a row when it comes to licensing your IP. So we wanna make sure that there's ROI on the other end of that. Right? And then long term sustainability. Is this scalable? Is this repeatable? And is this going to get us closer to our goals for growth, right? If the revenue that we are thinking about bringing in is going to be like a flash in the pan, you know, small amount of money for our organization. Does that make sense to put our resources, our time, and energy there? Right? So we really wanna think critically before we're jumping into one of these new areas. All of that to say, I love the idea of experimentation. I love the idea of dedicating a small amount of resources to trying new things. Right? We never know if we don't try, but also doing it with very open eyes as we're evaluating our options here. Okay. So a case study here, this is a real organization. They had a massive overreliance on 1 federal grant. And the federal agency was like, you are way too reliant upon us to fund like 70% of your organization. So next year you're not getting as much money, the year after that you're not getting as much money as that, and then the year after that we're done. And so the the government agency gave them a nice like 2 or 3 year phase out, but, they really were forced to either shut their doors or drastically downsize or diversify their revenue and they chose the latter. So they introduced a corporate sponsorship program and a recurring giving campaign. They were able to diversify their revenue by 40% and then grow their annual budget over the following 3 years because they not only replaced the government grant that was phasing out, but they were able to grow those other revenue streams. And it's not easy. Right? This is not like we're gonna decide to do it and the next day, like it's done. But they made the intentional effort and grew over a 3 year period. So I've just thrown a lot of different ideas at you, but we're gonna put another poll question up on the screen. And I want to know what new funding streams could your organization explore? And I just put 4 options up here, corporate partnerships, new grants opportunities, earned income initiatives, or maybe a recurring giving program for individuals. I would love for you to answer the poll and if there is something that is not up here, drop it into the chat. This is how we generate ideas and help each other out and who knows, maybe something that somebody drops into the chat will spark an idea for you that you can then bring to your team. Earned income, yes. Grant opportunities, good. Yeah and I'm seeing in the poll, okay we've got a lot of people, almost half of you are saying new grant opportunities. Y'all, there's a lot of money out there. There's a lot of money out there, and so investing into, investing into grants I think could have a huge ROI for you all. Awesome. New grant ops. Alright. Yeah, about 44% of you are thinking new grant opportunities, we've got about 20% earned income, we've got almost 20% corporate, yeah, there's a lot of money in corporate as well that they have available to give away. Awesome. Okay. We will keep going. Okay. So our key takeaway here as we're talking about scaling, growing our organization is we have to diversify our revenue. Right? Not only does it provide a stable foundation for us now, but that is the platform that we can use to jump off of as we are trying to grow. Right? Because when we have a diverse, you know, a diverse portfolio of revenue, it helps reduce our risk. Right? We're not reliant upon one source. It helps build resilience and we've got new opportunities to scale when we have a diversity of revenue. So this is a conversation that you can initiate again with your leadership, with your board, with, you know, whomever it might be in your organization, say, you know, listen, I've looked at our revenue diversity, we're pretty heavily reliant on this one area. Here's the numbers, right? Because you've got the numbers in front of you. And you know, maybe proactively initiate a conversation if this is not something that your organization has really looked at in the past. Alright. So we have talked about expenses. Right? Really assessing our ROI of our programs and making sure that our money is being spent most effectively. We've talked about revenue, diversifying revenue. And now we're going to talk about putting it all together so that we can really help build a plan for growth and scale. So we are talking about strategic planning for sustainable success. That is a tongue twister. Say that 3 times fast. Okay. So the importance of a strategic financial plan. Now I wanna say a couple things first. We have our strategic plan. Right? Your organization likely creates a strategic plan. Maybe, you know, you have a consultant come into a conference room and you you do a strategic plan for a few hours or a few days together, with a board maybe, it is usually like 3 to 5 years. And then we also have our financial plan. Right? That's a budget or a forecast. What I see often is that the strategic plan and the financial plan, the budget, they do not talk to each other. So we have all of these beautiful goals for scaling and growing in our strategic plan, but we do not have the resources built into our budget to actually do those things. And so what we're talking about here is pulling those 2 together. So the importance of a strategic financial plan is we've got a clear direction, for how we're spending our money, how we're bringing in our money, and it makes sure that our efforts, our our activities are aligned with our mission. Right? It keeps us focused on our long term goals, those goals that we've laid out in our strategic plan. It helps us optimize our resources, and we've got a strategy. So it can really build confidence with your donors, with your funders. I work with one organization that is just a really, really strong organization. They have not skipped a beat after throughout and then after the pandemic and just continue to grow. And I've asked them before like, how how do you do it? How do you keep getting these these grants and how do you keep, getting this securing all of this funding? And they're like, we have a growth strategy that we talk about all the time that we share. And so we can tell our donors like, listen, we're trying to solve a $50,000,000 problem. We've got 10,000,000 of that or you've got 20% of it, but we here's the strategy, here's the plan. We want you to be part of this bigger plan. I think that is huge and something a missed opportunity that I see in a lot of organizations. So when we're talking about building our roadmap, right, we've got our goals, We have the resources, and then we have the impact that we wanna have. Right? So we've got whatever our goals are, we have likely a a pot of resources that we can draw from and the impact that we wanna have, and we wanna make sure this road map, our strategic plan and our financial plan or our budget incorporates all of this. So when we're talking about the strategic growth roadmap, I realize that's a little bit of a mouthful. I'm really talking about like our financial plan. Right? Our budget. So we wanna make sure that we've got mission alignment. Right? We're not including things in here that are scope creep as someone mentioned before. We wanna make sure that we are thinking about our financial health. Right? That as we are building this plan, we've got cash flow in mind. Right? We have, you know, resource allocation in mind. We wanna think about scalability. Right? Again, as we are thinking about growth, can whatever initiative that we're doing, is it scalable? Are we able to, you know, are we able to really grow this significantly? Wanna make sure our goals are smart and like I said that we've matched our resources, human resources, financial resources, ops resources, with the big goals that we have. So how do we pull it all together? First, we wanna set clear clear goals. Right? I think that that should go without saying, but we wanna set clear goals and make sure everyone is on the same page with those goals. What does growth look like for our organization? Is it, for example, like going spreading far and wide. Right? Do we wanna expand into new cities or do we want to go deep in the city where we are? Right? Do we wanna go deep with our existing work or do we want to expand that work further? So that you know, making sure that we're all on the same page about our goals. We wanna identify key metrics. Right? How are we going to know what success looks like? And I think ROI, as we talked about at the beginning, would be one of those key metrics. How we are going to measure success, we wanna make sure we have a certain ROI around it. How to create this roadmap? We wanna look at the resources that we have now. Right? We wanna make sure that we understand the team, the finances, the systems that we have available to contribute to this plan. Okay. High impact we wanna prioritize our high impact initiatives first. Right? So we talked about calculating ROI earlier. So those programs or those activities that have a really high ROI, we may want to, prioritize going deeper, going harder on those ones, because we know that there's the impact there. And then finally, I keep going back to this, but we really wanna make sure as we're thinking about growth, as we're thinking about scale, that everything we're doing is tied back to the mission. Excuse me. Again, somebody mentioned scope creep and I keep bringing it up because often I see this happen. Right? We're on this path, but as we're thinking about growth and scale, we're adding all of these things that get us a just a little bit farther and a little bit farther farther from our initial purpose, our initial goal, and we really wanna make sure that we are that we're staying focused because that is how we're going to have the biggest impact is if we were, you know, laser focused on what we, what we set out to do. And you, as the finance person, you can bring us back to that. Right? We don't have to rely on, you know, program people or leadership or your CEO or executive director to to kind of bring us back to, to the mission. You're able to, you know, to be part of that conversation as well. Just like we talked about at the beginning, it's really important for the finance team to be central to these conversations. Okay. So what do we wanna do first? We first wanna analyze our current financial model. Right? So I wanna look at, from a quantitative perspective, I wanna look at our revenue. Right? We already talked about revenue diversity. I wanna look at our expenses. How are we spending our money right now? How are we allocating resources? Does it make sense based on our goals? And then I wanna look at things qualitatively too. So I know we're finance people, but it's really important to, to think qualitatively. Well, what's running like a well oiled machine in this organization? Versus what feels really challenging or what feels really heavy? So thinking about that, and your current model can help really build our plan. So the second piece of building the plan is making sure we're aligned and not just according to our mission, but also getting the right people involved at your organization. And so, really making sure that this is a cooperative conversation as you're building this growth plan. Right? That it's not just, you know, I've seen also, like I'm saying, finance really needs to be a central part of this, but I've also seen organizations where the CEO and the finance director or the CFO kind of plan things in a vacuum, and then hand out budget numbers to everybody and that's it. Right? We really need this to be a collaborative conversation. So getting the right people in the right seats at the organization to talk about this together. Figuring out, you know, what we really want to go all in on. So this is probably like a few different conversations, to first look at the data and figure out, okay, what is having the biggest impact? Where's our biggest ROI? Do we wanna double down there? And is there a small bit of resources maybe for experimentation and trying new things? But making sure that we're all in agreement on that. And then like I said before, really aligning your expense budget to make sure that you've got resources dedicated to these things that you wanna do. And then the last piece of building this growth plan is to actually put numbers to spreadsheets, our favorite thing. Right? So we wanna forecast and model different scenarios in, you know, some sort of template. Right? So I like breaking things down, revenue, every line item of revenue, all of your expense line items month by month, and then looking, you know, at the next 12 months and then maybe the next 24 months, you know, and then 3 to 5 years. I really like looking, at more granular detail for the short term and then But still continuing to forecast 5 years down the road. Because if we're talking about scale and growth and sustainability, we might not see the impact of that in the next 6 months. Right? It may we may have a longer runway to really see the impact of, of what that might look like. And so I like to model lots of different scenarios, and I have a spreadsheet that I like to use. It's pretty straightforward, but it's very customizable and it's pretty simple, I guess. And and that's the key. Like we don't need to do anything super fancy or anything, you know, anything too crazy to be able to really see, the impact of these different things that we wanna try. Right? So we wanna look at revenue, expenses, we also wanna look at cash flow because that's a consideration as well. Right? We wanna make sure that we have sufficient cash flow to be able to do these things that we wanna do. I know one organization that has a huge gala event, a live fundraising event every fall, but leading up to the event, during the timeframe when they have to pay for all of the expenses for the event, that is their lowest cash flow point of the entire year. Because basically, all of their donations and all of their fundraising comes after that event. And so it's just terrible timing that they've gotta, you know, outlay all of this money before all of the money comes in. So, really keeping in mind your cash flow as you're thinking about growth and scale is is super important. And then the last piece that I want you to to think about as you're building this plan to, you know, plan to grow and scale is to stay agile. Right? Just because we think that, okay, we are gonna go all in on our earned income. We've got some amazing IP. We're gonna license our content and and sell it. Well, maybe there are, you know, legal rules around you being able to do that. Maybe that's not an option. Right? So we need to stay agile, revisit and revise our goals regularly, you know, not every week, but looking at what our goals are on a quarterly or annual basis, is really important. And then being able to pivot and change directions as needed. Right? So really, just being flexible, I think. You know, just because we put something in writing or we added something to the forecast doesn't mean that it has to be so forever. And so, you know, balancing what we need in the short term with our long term goals, maybe there are, you know, maybe something happens to our building and so we need some cash to make some repairs and that means our long term objectives of scaling a particular program, like maybe that timeframe is gonna be now pushed out 6 months because of this urgent need. Right? And that's okay. That's why we have a forecast and a plan to be able to then see what this new reality looks like. So one quick case study here. There's a mid size nonprofit providing community based mental health services and they were super reliant upon grant funding which made up 80% of their revenue, very similar to the other organization I mentioned before. But they had a major grant that was not renewed, and so they had a massive deficit in their budget. And so they were faced with, you know, what are we going to do? Are we gonna need to shut down our programs? And so they did an ROI analysis of their programs to really think about, okay, where are we most efficient with our resources in terms of impact? They were able to diversify their funding by starting to bring in more corporate sponsorships. And then we had a cash flow model to help them build a reserve, help them see around the corner when it comes to their revenue and their cash. So they were able to shrink down the reliance on grants, they were able to ramp up their corporate revenue, and then they were able to scale their most impactful program without increasing too much overhead. And so doing this work, doing the ROI ROI analysis combined with thinking about diversifying your revenue, combined with putting it all together in a visual plan that you can actually see, and really help you see around the corner can be hugely impactful. Right? And we're not talking about like, you know, 10 x, 10 X ing your revenue tomorrow, right? It's these 3 pieces that combined together can really help you have a massive impact on your organization's not only financial health but also program impact. Okay. So we have one more poll question. I wanna know what is your biggest priority for your organization's growth roadmap? So building out this plan, what is your biggest priority? Is it making sure that your programs are aligned with your mission? Right? So so so sort of pulling back on any scope creep. Is it improving your financial health and sustainability, is it scaling your impact or diversifying your funding streams? Alright. So we've got, most of you are saying, or at least half of you are saying improving your financial health and stability. Yes, this can help that in so so many ways. Right? We're talking about being more efficient with our expenses. We're talking about diversifying our revenue and having a plan to bring it all together and visualize that. I love that. About half of you are there, another 20% of you are aligning your programs with your mission, but another 20 ish percent scaling your impact, and less than 10% diversifying your funding. And Bill says, hire and onboard key players for scaling strategy. Yes, we need to have the people resources in place for sure. And Patty says, ensuring that critical information is available to customers we support. Yep. Yeah, I love that. Awesome. All right, let's take another minute and bring it all together. We will bring it home before we wrap up. Okay. So I'm gonna ask you in a minute what action you are going to do after today. Right? We just spent an hour together, and I don't want this hour to be wasted. I want you to share with us what you're actually going to take away and do. Right? Because it is so important to take action on the things that we learn. So just sort of key takeaways from today, conduct an ROI analysis of your current programs. Right? What is most efficient when it comes to, you know, to, ensure your impact. Number 2, we have talked about identifying your high performing programs to scale and other performing ones to either improve, invest in, or potentially phase out and reallocate those resources. Number 3, evaluate the diversity of your funding sources. Right? We need to know. We can't make any decisions on what we wanna do, grow, scale, if we don't know where we are right now. Number 4, we want to identify any over reliance on specific funding types, right, and explore potential new revenue streams. Not 10 new revenue streams, maybe like 1 or 2 that feel really aligned with your organization. And lastly, I want you to think about doing a resource assessment to make sure that your team, your finances, your infrastructure, your ops can support growth initiatives. So what are you going to do after today? So I saw a lot of chat coming through here. Yes, Tracy says she's gonna read the white paper. I love it. Conducting ROI on your community programs. Awesome. Oh, people are putting the numbers in here. I'll I'll go back to the numbers just in case we, we missed it. Awesome. So we're conducting resource assessments. We're identifying our high performing programs. I see some ones conducting an ROI analysis. Yes. So good. Okay. A lot of you are gonna analyze your ROI. That's awesome. Okay. I will hold you to it. So I just wanna share with you a couple things. One thing here, I do actually I don't I'm gonna scroll past that real quick. Okay. Here's my email. If anybody wants to chat after this, I am happy to chat. I'm happy to hold you accountable to, I'm happy to hold you accountable to, to actually doing the things that you said you were going to do. And at this point, I think we only have 3 minutes left, Sarah. So I don't know if we have any questions or if we have time for any questions. We do. Yeah. We have a few, and some of them are kind of along the same lines. So Rachel and Megan asked similar ones, about earned income. So, like, product sales, rental income. Is it true that that could cross a threshold, Megan said, and be up to 66% of total revenue, where you wouldn't meet the public support test for your nonprofit form 990? Yeah. That's right. So we definitely wanna make sure that we are, we're talking to our auditor. We are talking to a CPA to make sure that number 1, the earned revenue is directly related to our mission and not, sort of, only tangential. Right? And so we wanna make sure that we are still meeting that public support test, that we are still sort of checking off all of our compliance boxes on the 990 accurately. And so one area to explore before we go into any of these new ventures is talking to your lawyer, talking to your auditor or your CPA to make sure, that you are you're still in compliance with whatever your organization needs to be compliant with. I know we've got a wide variety of organizations here. So, yeah, definitely talk to your CPA and you are a lawyer. Great question, though. Okay. So this one is from Amy, and this was earlier in the program or in the session when we were talking about evaluating the ROI of programs. And she said, surely, there are non financial measurements of whether a program is successful. So kind of what are you looking at, and then how do you negotiate or discuss that with program directors? Because obviously that could be a pretty fraught conversation, if that's someone's program. Yeah. Oh, that's a great question, Amy. Because you're right. This is it's not all numbers. Right? And like I mentioned in the beginning, we're not here just for the financial ROI, and sometimes our impact really cannot be accurately or fully described or calculated using numbers. But I think it's a balance. And I think there needs to be a conversation around the bigger financial picture of the organization. So for example, if you have a program that like by the numbers doesn't really look great or it's doesn't have the ROI that you might want to see, but you know that there is, that it's having a huge impact, maybe just on a small number of people. And it's important and it's close to the mission. If your organization can financially support it through other means, maybe you've got a lot of unrestricted funding and you're able to, you're able to divert some of the unrestricted funding to supporting this program that maybe doesn't have quite the, you know, the the calculated ROI, like that's still okay. Right? At the end of the day, we're here for our mission and also we need to be financially responsible. So I think it's a combination of both, but it's not, you know, it's not all just just just, just financial, but it's important to look at the organization's whole financial picture. Mhmm. Yeah. Alright. Well, we're at time, so I'm gonna let everybody go. But, thank you to everybody that joined and asked really great questions and commented in the chat. And, Stephanie, thank you as always for joining us and sharing your expertise. Your sessions are always wonderful. Thanks for having me. Thanks, everybody. Alright. Bye, everybody.