Archive for May, 2011

Learn how to revise your business model with Matrix Maps

Free Nonprofit Sustainability webinar

Based on the book Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, co-authors Jan Masaoka and Steve Zimmerman will present a webinar on the Matrix Map tool for understanding and revising your business model to address both financial and mission impact at the same time.

If you attend the webinar, you will also receive a coupon for a 25% discount on the book. Thursday, June 16, 11:00 am Pacific time. Click here to register for free. Limited to the first 500 registrants.

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Destination: Sustainability

For nonprofit leaders who are tired of their current decision making paradigm, the more nimble and actionable process of “matrix mapping” explained in the book, Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, offers a fresh and immediately gratifying alternative.

This book will help you examine your current business model, identify areas for adjustments, consider income streams and ultimately assist with ongoing decision making. Nonprofit Sustainability by Jeanne Bell, Jan Masaoka and Steve Zimmerman is an essential tool for CEOs, EDs and management teams.

There was a quote from this book that especially resonated with me because I’ve heard versions of this so frequently during my years in the nonprofit sector. It goes as follows: “A new executive director was told by the board and the staff, ‘There’s a $300,000 hole in the budget that you have to fill.’ Not only is this a dishearteningly phrased directive, it’s an unproductive way to characterize a financially difficult situation. Behind this statement is the unspoken assumption that programs and their funding occupy two separate spheres rather than fitting into an overall business model for the organization.” (p. 109)

This excerpt compelled me to ask the authors, “What is the most common reason why nonprofit leaders look at programmatic sustainability and financial sustainability in isolation of one another?”

Steve Zimmerman responded by saying “It is difficult for board members and senior managers to look at both mission impact and financial profitability primarily because our systems aren’t designed to do so. Program evaluations rarely provide information about the full cost of the program and financial statements don’t reveal the impact that our programs are having. Likewise, in our board meetings we tend to discuss items down an agenda: programs then finances then fundraising. But all of these are deeply interconnected. The Matrix Map is a visual tool that integrates mission and money and allows leaders to make decisions while holding both programmatic and financial sustainability together.”

I also asked Zimmerman, Bell and Masaoka to explain their claim that “sustainability is an orientation, not a destination.” Zimmerman said, “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.”

For more discussion about Nonprofit Sustainability, you can follow the authors: Jan Masaoka at Blue Avocado (, which is an online magazine for nonprofits where the discussion on this topic and many others is continuing. Both Jeanne Bell and Steve Zimmerman contribute there and can also be reached via their respective organizations: Compasspoint ( and Spectrum Nonprofit Services (

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Are you innovating or “unnovating?”

If you look into the future of our sector with a hopeful eye on what the digital age will help us accomplish, you’re not alone. I read a chapter on innovation from David Neff and Randall Moss’, The Future of Nonprofits: Innovate and Thrive in a Digital Age, and now I’ve got to get my hands on the rest. What a picture can do for a thousand words, this chapter does for the entire book.

Authors David Neff and Randal Moss say the social sector won’t be the same in five years, thanks to the digital age. Nonprofit leaders must think and act like a start-up in order to deliver relevant services and capture scarce funding. They claim that successful start-up behavior is characterized by a dedication to the innovative process and constantly incubating ideas and testing them with passion, enthusiasm, patience and persistence. Having worked in the nonprofit sector for years, it’s thrilling to hear Moss and Neff set the bar for nonprofit leaders at this level of innovation. But don’t be daunted by the idea of behaving like a start-up; the authors share many ways for getting started, including simple steps such as their Innovation Quiz located in the appendix of their book.

Neff and Moss draw you in by taking a fascinating look at innovation and how our definition has drifted by misuse and “unnovation,” or ideas that don’t actually advance a purpose or financial status. They explain that real innovation in their view aligns with Harvard Business Review blogger, Umair Haque: creativity can only be described as an innovation if the new process, product, service, or strategy results in (or is the result of) authentic, durable economic gains. Neff and Moss further elaborate that effective innovation is divided into two parts according to Joseph Schumpeter: 1) invention or an idea executed into being and 2) innovation or the ability to successfully apply the idea in practice.

So the real question becomes, “Do you focus your energy on creativity or on execution?” Neff and Moss agree with the research that supports the idea that while creativity is essential, the meaningful leverage is in the back end of ideas—the implementation.

For example, when the authors asked Wendy Harman of the Red Cross, “What were the obstacles and opportunities discovered in your [idea] development process?”

Her answer was, “This is tricky business! There are so many people who have to agree on common solutions for us to move forward. I’ve been humbled by how enthusiastic all the parties are in looking for the opportunities here but that doesn’t mean there aren’t challenges. It’s easy to talk about this issue but not so easy to take substantive steps forward.” Neff and Moss underscore this answer by claiming that every great idea is a lost opportunity if you don’t have a process in place to implement it.

With the authors’ definition of innovation and the understanding of its twofold process, do you feel your organization truly innovates? If not, what can you do to cultivate an environment where new ideas abound and have the chance to be tested? It’s time to find out and get yourself a copy of this book with me.

Watch the video, get more information or purchase the book: Follow the conversation: #thefutureofnpos

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“Letting Go” and “Do More Than Give” share views

An interesting article was brought to my attention this morning by a tweet from one of our CausePlanet contributors, Michaela Hayes. Published by the Stanford Social Innovation Review and written by Kristi Kimball and Malka Kopell, “Letting Go” highlights a handful of ways that foundations are getting in the way of their grantees’ work. Micromanaging is just one of the ways that foundations undermine the work of their recipients, say Kimball and Kopell, who work within the foundation world.

In fact, the first problem was described as “foundation-designed solutions.” Crutchfield, Kania and Kramer discuss this problem in Do More Than Give. The Do More authors describe number four of their six best practices as “empower the people,” which explains that when foundations or donors sit shoulder to shoulder with recipients and even the communities’ served at the same table, creating social change becomes more collaborative and results-oriented rather than the give, spend and report cycle, we typically see between grantor and grantee. Crutchfield, Kania and Kramer say that catalytic donors view individuals as “essential participants” in the process of solving problems for themselves. Listening to stakeholders is a powerful engine for change because of the ideas that emerge and the solutions that result from brainstorming.

Another problem Kimball and Kopell expose from their view inside the foundation world is that funders typically make grants with “tunnel vision.” They choose one organization to make the change they are looking for in the entire system. “Instead of letting 1,000 flowers bloom, they think they can afford just one variant. But focusing narrowly on one solution is a fragile strategy, particularly in complex, unpredictable environments,” say Kimball and Kopell. Do More authors would agree by sharing best practice number three, which is “forging nonprofit peer networks.” Instead of focusing on a few grantees, donors are in a unique position to look at an issue in its entirety and call for convenings among all nonprofits who focus on the same issue to benefit from information sharing and collective impact.

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