Posts Tagged ‘Forces for Good’

Living the brand means rethinking the business model

Co-creation of brands

A brand is much more than a logo, tagline or key message. It is an authentic expression of a nonprofit’s promise to the world. Branding experts agree our organizations alone don’t control our brands. Brands are co-created with our stakeholders–-our audiences, volunteers, board members, funders, partners and service recipients. One’s perception of The Red Cross, for example, is informed by what it communicates directly, but also what our friends, family and social network say, as well as our own experiences. Those impressions ultimately create a collective consciousness of the brand itself. Our impressions of a brand and the authentic manifestation of that brand promise in the world influence how we engage with that nonprofit as donors and ambassadors.

Brand + business model

How can we more effectively engage stakeholders in the mission of a nonprofit? While brand engagement is critical to consider, we must think beyond the marketing function alone. It is time to fully imbed our brand promise in the way we do business day in and day out, which necessitates new thinking about business model design. At the core, we are talking about operating in new and different ways.

Value creation in your business model

A well-designed business model creates and captures value. Value, like beauty, is in the eye of the beholder. Fueled by the interests of our stakeholders, we can leverage organization-driven and user-driven experiences to inform, engage and influence opinions and actions. Data-driven strategies and tools can improve marketing, fundraising and volunteer engagement. The trick is not solely beginning and ending there. It is time to intentionally design your nonprofit’s business model to add value to your key stakeholders on a regular basis, recognizing the unique and overlapping needs of each group. By keeping an eye on value creation–-from the point of view of your stakeholders–you will capture more value within your nonprofit in the form of financial support and active ambassadorship for your cause.

So, where to start?

1.       Begin with clarity of brand promise.

2.       Design your business model to activate the brand promise.

3.       Use data to refine and reevaluate along the way.

4.       Keep an eye on creating and capturing value via a scorecard that tracks key metrics.

Three-component business model

The case studies profiled in Rippling by Beverly Schwartz and Forces for Good by Leslie Crutchfield and Heather McLeod Grant evoke a three-component business model, one that is designed to maximize 1) programs and services, 2) financial resources and 3) community engagement. It’s no longer sufficient to merely consider what you offer and how you fund operations. As the growing recognition of the importance of nonprofit brand suggests, a well-designed business model creates and captures value through imbedded approaches aligned with brand.

See also:

Rippling

Forces for Good

Breakthrough Nonprofit Branding: Seven Principles to Power Extraordinary Results

 

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Forces for Good: A second look at how the high-impact nonprofits fared

The world has changed significantly since the first edition of Forces for Good: The Six Practices of High-Impact Nonprofits was published in late 2007. The U.S. and global economies have significantly slowed down, while government cutbacks, reduced public philanthropy and less corporate funding have all challenged nonprofits like never before.

This stark new context prompted us to revisit our initial research last year and see if our findings still held up in a dramatically different environment. In the original book, we studied 12 high-impact nonprofits, from Habitat for Humanity to Heritage Foundation to Feeding America, and distilled six practices these organizations use to change the world. This time, we wanted to know how the original high-impact nonprofits fared during the Great Recession and what else we might we learn from them about thriving in difficult times.

Additionally, we also wanted to know how local and smaller nonprofits, which represent the vast majority of our sector, apply the same six practices to deepen their local impact. So we also conducted entirely new research last year on 13 local and smaller nonprofits operating on budgets ranging from $600,000 to $5 million. Despite recent changes in the economic landscape, our updated research reaffirms the viability of the original six practices for scaling social impact for organizations both large and small.

Here are a few lessons we learned from the original 12 high-impact nonprofits about thriving in turbulent times.

Accelerate into a downturn

Counter-intuitively, instead of causing setbacks, the recession became a force that propelled high-performing groups forward. Rather than putting their foot on the fundraising brake, many accelerated their development efforts, often by focusing their strategy on their highest-impact activities. Along the way, the majority of the original 12 nonprofits significantly increased their revenue. Teach For America quintupled in size, growing from $41 million in 2005 to $277 million in 2010. Four of the 12 groups doubled their budgets, and almost all the others grew at healthy clips. Rather than shying from growth, they leaned into their strategies and came out stronger.

Stay close to your donors

The moment the recession hit, Ed Feulner, CEO of The Heritage Foundation, instructed his development team to call every single major benefactor and ask: “How are you doing? How will this downturn affect your giving?” Donors appreciated Heritage’s high-touch approach, cementing their long-term commitment to the conservative cause. Then Heritage intensified its direct marketing campaign. “Those who do well in recessions come out strong. We didn’t want to show weakness,” says Feulner. The result? From 2005 to 2010, the organization doubled in size to $81 million, and nearly tripled its dues-paying membership base from 250,000 to more than 700,000 members.

Find opportunity in crisis

Fred Krupp, chief executive of the Environmental Defense Fund made the point: “Don’t let a good crisis go to waste.” It’s advice many of the nonprofits we studied have taken to heart. For EDF it was leveraging the Gulf of Mexico oil spill in 2009 to help spearhead the “biggest ecosystem restoration effort ever in the history of the planet,” says Mr. Krupp. For other nonprofits, it was about pivoting quickly to respond to immediate needs. “Of course we all pray that there will be no disasters,” says Habitat for Humanity’s chief executive, Jonathan Reckford. “But when they do occur, you have to be willing to adjust your efforts… [Hurricanes] Katrina and Rita, and the Indian Ocean Tsunami, were rallying points to kill cultural sacred cows about how we scale. With both events, we went much deeper in a smaller place and time.” Habitat built 25,000 homes in response to the tsunami and 2,000 in the Gulf region post-Katrina.

In addition to employing these immediate strategies to survive and thrive during the recession, these high-impact nonprofits all continue to follow the six practices we first identified. If anything, they’ve even deepened their reliance on these practices to increase their impact. They know how to tap into business to create new ways to serve the public good and how to influence government policies to help the people they serve. And they are constantly building movements of volunteers and supporters while working collaboratively with their nonprofit peers. Lastly, they continue to share leadership and remain highly adaptive, able to not just survive, but thrive in challenging times. In our updated book, we show how these organizations have continued to leverage the six practices to be forces for good, even in difficult times.

As for local organizations, we also learned a number of lessons about how smaller nonprofits can apply the same six practices to have deeper impact in their communities. In a lengthy chapter, featuring all new research on 13 high-impact local nonprofits, we explore how they adapt and modify these practices to fit the local context. Many of them share leadership not just within their organizations, but with their volunteers, board and other close stakeholders, thus expanding their reach. They also engage local evangelists to help deliver services and promote their cause, and they build networks of local nonprofits, collaborating to share resources, align action and be more effective in their work. Lastly, while advocacy and making markets work are more challenging for smaller, local nonprofits, that didn’t stop the best of them from using these levers to change policy at the state and local level or to make local markets work more effectively by working with and through business.

About the authors

Leslie Crutchfield and Heather McLeod Grant  co-authored Forces for Good: The Six Practices of High-Impact Nonprofits; the new updated edition (Jossey-Bass/Wiley 2012), includes lessons on how 12 high-impact nonprofits fared during the global recession and additional research on how local and smaller nonprofits employ the six practices to deepen impact in their own communities.

See also:

Do More Than Give

The NON Nonprofit

Building Nonprofit Capacity

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Bridge the gap between your service and advocacy

This post is the third in a series on advocacy and offers relevant Page to Practice™ book summaries and articles at the end of the first article and second article.

In our monthly virtual book club last week, we had coauthor of Forces for Good: The Six Practices of High-Impact Nonprofits, Heather Grant, participate. One of our attendees said, “Nothing beats actually hearing the author explain his/her insights on a subject.” I agree.

Start at the beginning. One of the six best practices we spent some time discussing with Grant was first on the list of high-impact nonprofits: bridging the gap between service and advocacy. Several EDs in the group commiserated with one another about how this was a neglected area which needed improvement.

Systemic change requires more. In Forces for Good, Crutchfield and Grant explain that great nonprofits realize that, in order to achieve higher levels of impact, they need to bridge the gap between advocacy and service. They may start out providing great programs, but eventually realize that they cannot make systemic change without also engaging in advocacy. Others start out doing advocacy and then add programs to catalyze their strategy.

Bridge the divide. Providing services helps meet immediate needs, such as feeding the hungry or housing the poor; advocacy helps reform larger systems by changing public behavior or creating governmental solutions. High-impact nonprofits bridge the divide between advocacy and service. Although policy advocacy can be an incredibly powerful tool for creating large-scale social change, many nonprofits shy away from it.

Create a virtuous cycle. Some of the reasons for their hesitation include the fact that advocacy is difficult to manage and requires different organizational skills than those needed to provide direct services. In addition, it is challenging to measure results of advocacy efforts. However, the authors discovered that simultaneously doing both creates a virtuous cycle. Instead of causing the organization to lose focus or lessening its impact, engaging in both service and advocacy can create an impact that is greater than the sum of its parts. It is no surprise, then, that all the organizations in the book have engaged in both.

Here are three ways to bridge the divide:

1. Start with service, add advocacy. The majority of organizations in the book began with direct service, or programs, and adopted policy advocacy well after they were founded. The underlying reason why they decided to engage in advocacy was the same: They wanted to have more impact on the problems they were trying to solve.

2. Start with advocacy, add service or programs. Starting out with policy advocacy is especially effective when an organization is relatively small in relation to the level of impact it seeks to achieve.

3. Combine service and advocacy from the outset. The authors observed two main patterns among the organizations that combined both from the beginning: a) Leaders knew that replicating programs site by site, with private funding, would never take them to the level of change they were seeking; and b) Leaders also shared a common philosophical belief that government should be a part of the solution. Policy reform sends a signal to the rest of the nation that the changes these organizations propose are important enough for society as a whole to adopt.

Watch for part four of our advocacy series when we highlight how high impact nonprofits are successfully combining approaches of service and advocacy.

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