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Sustainability: It Requires More Than Money (Pt. 3)

August 02, 2011

(This is the last in a series of three posts by Kevin Monroe, founder and managing partner of X Factor Consulting LLC and the Foundation Center-Atlanta's Expert in Residence for July. Before you dive in, catch up on Part 1 and Part 2. Both are excellent.)

Kevin_Monroe_medium I hope it's evident to those who have read my two previous posts why sustainability takes more than money. We began this conversation by focusing on the results that stem from your programs as the foundation for sustainability planning and then proceeded to explore relationships as valuable assets for your organization. In my third and final post, we finally focus on resources. However, even in this post we're looking at more than money.

Think with me for a moment. For those willing to invest the time in an exercise, get a sheet of paper or open a fresh document, select one of the programs your organization provides, and list all the resources needed to deliver that program. (If you're starting up a new program or organization this is a great planning exercise; if you have an existing logic model for your program, this will be a great help, as well.) Now, as you look at the list, what types of resources made your list? You probably included items like:

  • staff (paid or volunteer) -- this includes program staff directly involved in service delivery as well as support staff (the folks who keep everything running), executive staff, and board members;
  • facilities (whether it's your building or a space that's donated or shared) and all the maintenance and upkeep, including utilities;
  • transportation (if you own the vehicles then you also have maintenance, upkeep, and insurance, etc.);
  • computer hardware and software (both for your staff and clients, if that's part of your programming -- and, of course, those also require maintenance, updates, and technical support);
  • office equipment (telephones, copiers, printers, fax machines, etc.);
  • program content or curriculum, and, of course;
  • funding.

The list is far from complete, but it's a start. If you already have many of these items, then (good news) you have assets and resources. If, on the other hand, you're in the early stages of starting up a program (or organization), then you probably have a wish list. Wherever you are in your journey, let's explore four possible strategies you might want to consider with respect to resources. These include: protect, conserve, leverage, and diversify (or develop). The first three strategies apply primarily to those with existing resources.

Protect

If you have resources -- especially funding (whether it comes from individuals or institutions) -- you want to do everything in your power to protect those resources. Here are a few approaches that sustainable organizations practice:

Produce excellent results for your investors. Remember people appreciate your work; they invest in your results. Make sure you know the deliverables associated with all grants and do your best to achieve them. If you know you're going to have trouble to meet agreed-upon targets, engage the funder in a discussion and see what options exist for restructuring the grant (e.g., no cost extension).

Provide timely, accurate, and comprehensive reports. Be a funder's best grantee or partner by providing them with the information they need, when they need it. Don't be afraid to go above and beyond the requirements and provide them with supplemental information (but be careful not to inundate them with e-mails).

Engage funders in media and PR (where appropriate). Learn what your funders' preferences are in terms of media exposure (and whether they want to be included in press release mailings and other media events).

Build public support for programs. This is especially important for those with government funding. Collect success stories and testimonials and engage your constituents and supporters as advocates for your organization. Make sure state and local legislators and (where appropriate) your representative know about the great results (there's that word again) your organization is producing.

In turbulent economic times like these, it's almost a given that you'll be unable to secure or hold on to certain resources, which is why it is imperative to conserve and leverage the resources you do control.

Conserve

Many organizations have become prudent to the point of being overly aggressive with their resource conservation measures. Before you start slashing away, consider these options:

Cross train staff and volunteers. Many organizations have found great opportunities to conserve resources and even save jobs by cross-training employees so that they are able to assume multiple job functions for the organization.

Audit the utilization of your facilities, programs, and staff. Make sure you are making wise use of your resources. Perhaps you can save money through creative scheduling of events or employees to reduce energy costs. One of our partners realized they could combine some programs during the summer months and not even run the air conditioning in one of their buildings on certain days.

Wisely reduce expenses wherever possible. Explore options for reducing expenses like service contracts or janitorial services. One of our clients enclosed a note with all their bill payments stating that revenues were down and asking whether vendors were willing to charge them a reduced rate. They were quite pleased by the results. (A note of caution: Think of marketing as an investment rather an expense and be careful about drastic cuts to marketing programs that may diminish the flow of funds to your organization.)

Maximize volunteer service. Explore all options for engaging volunteers in tasks that you might otherwise have to pay to have done. When unemployment is high, there are usually folks looking to fill some of their discretionary time and what may be gaps in their resumes.

Leverage

In addition to conserving resources, look for opportunities to leverage existing resources and assets that have the potential to produce revenue for your organization.

Share facilities and assets. If your organization has surplus office or meeting space explore options for renting it out or sub-leasing it to other nonprofits. Perhaps you have surplus vehicles and would consider selling them or subcontracting transportation services to other organizations. (If you do, please be sure to address all liability issues to prevent exposing your organization to risks.)

Participate in a buying coop. Combine your buying power with other local nonprofits to take advantage of cost savings. Your statewide nonprofit association (if there is one) is a great place to begin your search for coop partners.

Consolidate administrative functions with/for other organizations. Some organizations have been extremely resourceful in their approach to consolidating administrative functions through partnerships or managed service organizations (MSO). The latter build on the premise that not every nonprofit must have its own HR, finance, or facilities management department but rather can share these functions to create cost savings (and better service delivery). The Foundation Center site has a great case study documenting the creative approach two museums in Chattanooga, Tennessee, undertook and how it was a win for both. Read it here.

Explore the possibility of strategic restructuring. Joining forces with another organization may become a necessity for your organization. David LaPiana is a leading expert in this area and is featured in a podcast on the center's site that is an excellent resource for organizations interested in exploring the restructuring option.

Diversify/Develop

Finally, there are always opportunities to diversify existing assets or develop new resources for your organization or program. From my perspective, I see three (and only three) primary sources (or buckets) of funding for nonprofit organizations. Money comes from individuals, institutions, or innovative entrepreneurial efforts. Now, within these three buckets there are literally thousands of possibilities, and it's up to your organization to find the intersection of potential and capacity for fundraising success. That will differ for every organization, because so much depends on and organization's relational assets and capital. If this is your first venture into fund development beyond your current funding strategy, start by identifying opportunities where you are likely to have short-term success (low-hanging fruit). Immediate successes (even if they are small) will build confidence, enthusiasm, and momentum for the longer haul.

Here are a few questions to help identify your low-hanging fruit:

  • Which individuals or institutions can you readily approach through your organization's existing relationship network?
  • What area of your program outcomes best intersects their needs, wants, and desires and would encourage them to invest?
  • How can you mobilize board members (or other key contacts) to dedicate time to identify high-potential opportunities?
  • Can you mobilize board members to host small gatherings (house parties, informal luncheons, etc.) of their friends and associates to introduce them to your organization?
  • Can you mobilize your board to create a matching gift fund? Could you use such a fund to encourage new investment from potential donors?

My recommendation is to identify the two or three areas your organization can address that will make the greatest impact on its sustainability. Develop a detailed action plan, and be intentional about its implementation. Document and share your successes and watch the excitement and enthusiasm grow.

On the topic of resources, the Foundation Center has a wealth of information (books, classes, databases, reports, podcasts, chats, etc.) that can assist you. Whether it's online communities, libraries, databases, reports, or staff, all are excellent sources of knowledge as you seek to diversify or develop resources.

We began this series by exploring results. We then turned our attention to relationships and identifying those individuals or institutions that value your results to the point of investing resources in your organization so it can continue to produce results. This, too, is a virtuous cycle. As you tend to all aspects of the cycle, you will grow your network of supporters and enhance the sustainability of your programs and organization.

This concludes my three-part series on program sustainability. I trust the posts have, in some way, stimulated your thinking in regards to program sustainability. Even more, I hope you will use the ideas and concepts in them, as well as some of the other excellent resources I've pointed you to, as jumping-off points for discussion with your staff, board, and funders. Until next time, keep your eyes on the prize.

-- Kevin Monroe

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