Financial endurance: Does your funding strategy have it?
One of the practices from Bridgespan surrounds the notion that “you must break the funding wall by committing to an evolving funding strategy over time. As you consider the next three to five years, how will your strategy need to evolve to ensure your long-term financial security to deliver sustained impact? Where do you take calculated risks?”
In Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, authors Jeanne Bell, Jan Masaoka and Steve Zimmerman underscore Bridgespan’s research, encouraging nonprofit leaders to ensure financial endurance and sustained impact through an evolving revenue strategy. In my interview with the authors, I asked them about their view of sustainability as an orientation, not a destination. Steve’s response is fitting for this discussion:
One of the common comments that I receive from boards when we’re doing strategic planning is that they want a ‘sustainable business model.’ It is often said in a way that implies that sustainability is a destination-–once you get to the nirvana of a sustainable business model you don’t have to worry anymore and money will continue to come rolling in for perpetuity. We know the reality is that nothing is forever. Funding sources come and go and constituents’ needs evolve. So, what is sustainable today may not be sustainable tomorrow. As a result, sustainability is constantly evolving and requires an orientation of monitoring and decision making to make sure that your organization is sustainable at any given point and time.
Smart nonprofits today realize the board can’t bring in a consultant and have a “one-off” strategic planning session. They must commit to an evolving plan that’s responsive to the ever-changing environment. How relevant is your current plan and does it build your financial endurance?