2. 20.05.04© Organization Futures LLC 20041 Strategic Thinking About Local Sources Ken Phillips, Organization Futures CFP Workshop in Kiev May 2004 Management Finance Trust FundraisingProgram Governance

3. 20.05.04© Organization Futures LLC 20042 Trends for Organizations 1.Geopolitical focus moves south and east. 2.Reductions in foreign and government funding 3.Increased role and importance of the civil society / organization sector 4.Increased competition for funds 5.Rising expectations about results 6.Donors and participants press closer to NGOs 7.Growing competence in strategic planning, capacity building, fundraising, public relations, branding, community involvement, and board development

4. 20.05.04© Organization Futures LLC 20043 Organization Development Stage 1 Good program following donor initiatives 1.The donor determines the mission, sets the budget, and issues an RFP 2.Your organization writes good proposals in response to the donor’s plan and RFPs 3.The donor does the strategic thinking and set the goals for you 4.You carry out the donor’s intentions if you get the grant or contract 5.Your board is a program oversight board with a financial assurance role 6.Your executive director is a program director for the donor 7.You respond to what the donor asks you to do 8.You are a contractor for that donor

5. 20.05.04© Organization Futures LLC 20044 Organization Development Stage 2 Taking control of your destiny by initiative 1.You determine your mission, plan the budget, and seek donations for the mission 2.Your organization finds and develops new markets of donors 3.You do the strategic thinking and set the goals for yourself 4.You carry out your organization’s mission 5.Your board is a strategic board with a fundraising role 6.Your executive director is the organization leader and fundraiser 7.You play a strong leadership role and get others to follow you 8.You are more independent with a diversified base of many different donors

6. 20.05.04© Organization Futures LLC 20045 Strategic Thinking Invents New Categories – Not Rearranges Old Ones Formal planning processes—preserve & depend upon ‘old’ established categories Extrapolating from the past or copying from others says ‘you are a good student’—not a good leader! Planning—involves a calculating style of management— not a committing style Real ‘strategists’—get their hands dirty digging for ideas Strategy making is a process that is interwoven with all that it takes to manage an organization.

7. 20.05.04© Organization Futures LLC 20046 Strategic Management Vision Mission DONORS Credibility Goals Objectives Activities Indicators RESULTS S W O T Positioning Strategies Culture Results for Society Participants Donors Strategic Thinking Strategic Planning Strategic Implementation Strategic Evaluation

8. 20.05.04© Organization Futures LLC 20047 Peter Drucker 1.What is your business? 2.Who is your customer? 3.What does your customer consider value? 4.Non-customers are as important as customers. 5.The customer never buys what the supplier sells. 6.Management that does not innovate will not last.

9. 20.05.04© Organization Futures LLC 20048 Nonprofits Add Value Competition produces better results Innovation, harder work, lower costs, better services Organizations add more revenues 50% government, 25% fees, 25% donations, 25% volunteers = 125% They have expertise Mission driven, highly motivated,, professional, specialised, independent boards for control They provide important extras Public education, citizen involvement, advocacy, volunteers

10. 20.05.04© Organization Futures LLC 20049 Michael Porter on Strategy Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. A focussed competitor targets the special needs of a subset of customers and designs its activities accordingly.

11. 20.05.04© Organization Futures LLC 200410 Build Strategic and Competitive Advantage Flows from identifying key resources & competences Identifies obstacles & options to overcome Identifies and exploits rivals’ weaknesses Leads to a unique ‘value added’ Develops key resources & competences Initiates changes in your sector to your advantage Captures scarce resources (ideas, people…) Anticipates and responds to changes Asks: Why is our performance going as it is? Where will it lead if it continues? How can we design a new strategy? London Business School

12. 20.05.04© Organization Futures LLC 200411 Competition Nonprofits like businesses are in competition for funds. The basic successful service strategies are to compete by providing better quality lower cost a unique and innovative approach. Donors – and clients - will need to see a ‘value added’ from the nonprofit’s use of their funds. Competition for dominating and ameliorating an issue

13. 20.05.04© Organization Futures LLC 200412 What are the obstacles? Identify four obstacles for BRCS Write each one on a card Collect ideas in groups

14. 20.05.04© Organization Futures LLC 200413 What’s going right? Identify four things going well Write each one on a card Collect ideas in groups

15. 20.05.04© Organization Futures LLC 200414 Why Are Organizations Not Raising More Money? 1.Unproven Results to Participants 2.Questions of Trust and Reliability 3.Weak Value to Donors 4.Lack of Total Organizational Fundraising

16. 20.05.04© Organization Futures LLC 200415 Lessons about Fundraising 1.Giving is based on trust, confidence and respect. 2.Fundraisers represent the totality of the nonprofit. 3.Giving occurs because of the value the donor receives and her total experience. 4.Donors want to know the difference that their individual gifts actually make. 5.Donors, as well as participants, want to be involved in planning and evaluation.

17. 20.05.04© Organization Futures LLC 200416 Lessons about Evaluation 1.Results that matter are Measured, long-term, sustained impacts. 2.Core management functions are Assess stakeholder needs in planning Design programs with progress indicators Monitor during implementation Assess your own organization Review ethics and standards Learn, document, share and use lessons

18. 20.05.04© Organization Futures LLC 200417 Essentials for Organizations 1.Mission Value How important is it society? 2.EffectivenessQuality How big a result is there? 3.EfficiencyPrice What is the cost for results? 4.TrustworthinessEthics How well does it behave? 5.Transparency Accountability How involved are constituents?

19. 20.05.04© Organization Futures LLC 200418 Extend Your Appeal To New Donors Know the donors Base appeal on Value Results Cost Involvement Trustworthiness Current Donors. New Donors D o n o rs

20. 20.05.04© Organization Futures LLC 200419 Know and Meet the Expectations of Donors Get to know donors better All staff fundraise and meet donors Top executives and board members fundraise Assure fundraising attractiveness of programs Use the donor’s language Excellent and timely reporting Responsive donor service by all

21. 20.05.04© Organization Futures LLC 200420 Donor’s Needs Objectives Strategies Expectations Emotions Biases

22. 20.05.04© Organization Futures LLC 200421 Know and Meet the Expectations of Donors Get to know donors better All staff fundraise and meet donors Top executives and board members fundraise Assure fundraising attractiveness of programs Use the donor’s language Excellent and timely reporting Responsive donor service by all

23. 20.05.04© Organization Futures LLC 200422 Give Value to Donors 1)Acknowledge their financial and emotional support 2)Ask them what they value in their relationship 3)Involve them (really, virtually, media, other ways) 4)Give them influence within the organization 5)Use individualized marketing to respond to them 6)Provide customized programs to meet their needs

24. 20.05.04© Organization Futures LLC 200423 Why Have Standards? Shared values and common direction Public responsibility Donor trust Prevention Improvement Defense Everything needs to be verified!

25. 20.05.04© Organization Futures LLC 200424 Crisis of Confidence for Nonprofits  ProgramImpact on Participants  FundraisingImpact on Donors  EthicsTrustworthiness  Commitment Fundraising Effort

26. 20.05.04© Organization Futures LLC 200425 Key Elements of Public Accountability 1.Transparency and accountability to donors and others 2.Truthful fundraising appeals 3.Use of funds according to donor expectations 4.Sound financial management and accurate reports 5.Measured program effectiveness 6.Informed & independent Board, no conflict of interest 7.Adherence to best practices in all aspects of work 8.Complete, accurate and timely reports

27. 20.05.04© Organization Futures LLC 200426 Iron Rules of Fundraising (1- 5) 1.Fundraising is not about money 2.There are only internal barriers to fundraising 3.Determine and promote your uniqueness 4.Compete through innovation, price and quality 5.Assure basic systems are in place

28. 20.05.04© Organization Futures LLC 200427 Iron Rules of Fundraising (5-10) 6. Donors give because of value they receive 7. Meet the needs and expectations of donors 8. Develop relationships with donors 9. Solve their problems, not yours 10. Learn to love the word “No”

29. 20.05.04© Organization Futures LLC 200428 Fundraising Rules at Latvian Children’s Fund Work hard for fundraising Maintain good contacts with donors Have concrete projects Produce good results Maintain low costs Account carefully for funds Send good reports to the donors

30. 20.05.04© Organization Futures LLC 200429 Total Organizational Fundraising© Six step approach to the core capabilities of an organization for effective fundraising 1.Fundamental Principles of Fundraising 2.Internal Culture of Fundraising 3.Strategic Planning, Positioning and Fundraising 4.Organizational Ethics and Standards 5.Strategic Evaluation for Learning 6.Involvement and Accountability for Donors

31. 20.05.04© Organization Futures LLC 200430 Capacity Building It encompasses organisational capabilities to:  Assure a well-run and respected institution  Plan and improve programs  Recruit, manage and reward people  Raise financial/volunteer/material resources  Understand, reach and motivate others

32. 20.05.04© Organization Futures LLC 200431 Be a well-run and respected institution Mission Strategic positioning Branding Values and culture Governance Management Planning

33. 20.05.04© Organization Futures LLC 200432 Plan, implement and improve programs Design Indicators Involve Implement Monitor Evaluate Learn Need Scope Long term impact Consequences Replicability Sustainability Science

34. 20.05.04© Organization Futures LLC 200433 Recruit, manage and reward people Leading Managing Culture Strengthening Changing Learning Board Management Staff Volunteers Participants Lessons

35. 20.05.04© Organization Futures LLC 200434 Raise financial, volunteer and material resources Culture Strategic Planning Training Implementation Managing Money Time Material Endorsement

36. 20.05.04© Organization Futures LLC 200435 Understand, reach and motivate the others Collect data constantly to give insight Get outside yourself to see your organisation Identify new partners and groups to involve Develop strategies for mutual involvement Change to know and meet their needs Consider non-donors as donors

37. 20.05.04© Organization Futures LLC 200436 How to Take Control of the Environment Get out of your self and your own limitations Put yourself in other people’s position Keep your eyes open to observe See the body language Listen to learn Hear what is not being said Develop your antenna Understand the intangibles

38. 20.05.04© Organization Futures LLC 200437 New NGO Structure Resource Participants / Stakeholders Funding, involvement, decision making, evaluating, control Board of Directors Fiduciary/legal, Policymaking, Select staff director Fundraising Chief Executive Officer Planning and Management – Participatory Manner Influence and Implement board decisions – Results Final decision maker – Hard Choices Staff Program, fundraising, finance, etc Influence and Implement executive director decisions Program Participants Program, involvement, decision making, evaluating, control

39. 20.05.04© Organization Futures LLC 200438 West Broadway Neighborhood Association Year19921993 Culturenegativepositive Planningad hoc3 year strategic plan Participationlimitedopen / extensive Activitiescomplainingmany / results focus Influencelittlesignificant Members25 200 Revenues$3,000$200,000

40. 20.05.04© Organization Futures LLC 200439 Life Cycle of an Organization

41. 20.05.04© Organization Futures LLC 200440 Why Is Evaluation a Problem? 1.Everyone is afraid of evaluation. 2.Evaluation costs money. 3.Evaluation is often very difficult. 4.There are new and confusing disciplines. 5.People confuse different approaches in evaluation. 6.The approach to evaluation is not well planned. 7.The results of evaluation are not well used. 8.Nonprofits lack a culture of learning. 9.You can lose your job from a bad evaluation.

42. 20.05.04© Organization Futures LLC 200441 Significance of Strategic Evaluation Significance of Evaluation for Capacity Building mission  programs  strategic evaluation  learning  capacity building  better achieved mission  better fundraising Significance of Evaluation for Grants grant  design  indicators  implementation  M & E  evaluation  donor satisfaction

43. 20.05.04© Organization Futures LLC 200442 Management Role in Strategic Evaluation 1.Create a culture of openness and learning 2.Open diverse feedback channels 3.Assure clarity of purpose of all evaluations 4.Require lessons learned summary in all reports 5.Review a consolidation of lessons learned 6.Incorporate lessons learned in all new planning 7.Create internal and external learning groups 8.Conduct program audits like financial audits 9.Promote contributors to and users of lessons

44. 20.05.04© Organization Futures LLC 200443 Board Role in Strategic Evaluation 1.Set evaluation and learning as a board priority 2.Clarify a policy for evaluation and learning 3.Require evaluation measurements in all plans 4.Provide adequate annual funding for evaluation 5.Include evaluation in the executive director’s review 6.Walk around on your own and talk to beneficiaries 7.Take time to reflect at a Lessons Applied Retreat

45. 20.05.04© Organization Futures LLC 200444 Fundraiser Role in Strategic Evaluation 1.Bring donors’ perspectives to all discussions 2.Press for accountability and transparency 3.Develop a code of ethics for your organization 4.Research what donors like and don’t like 5.Plan strategically with stakeholder analysis 6.Determine value added and strategic positioning 7.Help shape organizational purpose and program 8.Demand evaluations with lessons learned 9.Advocate organizational fundraising culture

46. 20.05.04© Organization Futures LLC 200445 Results Donors Organization Beneficiaries Money Value added Life Changes Activities Inputs Processes Outputs Outcomes Results indicators Source: USAID

47. 20.05.04© Organization Futures LLC 200446 The Actors Program Results Finance / Administration Fundraising StaffBoard CEO Managers $

48. 20.05.04© Organization Futures LLC 200447 Learning to Change Depends on Evaluation  Information  Understanding  Motivation  Plans  Commitments  Actions  Changes  Follow up

49. 20.05.04© Organization Futures LLC 200448 I Crises Pressing problems Deadline driven projects Meetings, preparations II Preparation Prevention Values clarification Planning Relationship building III Interruptions, some phone calls, mail, reports, meetings Many proximate pressing matters Many popular activities IV Trivia Busy work Phone calls Time wasters Escape activities Important and Not Urgent Urgent and Important Not Urgent Not important Not Important But Urgent

50. 20.05.04© Organization Futures LLC 200449 Five Steps to Getting Unstuck 1. Break out of inertia – do something today. 2. Bring in a third-party “enforcer” – a friend or executive coach – to keep you moving. 3. Don’t worry about rejection; just realize you’ll get plenty of it. 4. Seek criticism from people with no stake in your job. 5. Try “storylining” or similar exercise to uncover the activities and surroundings that motivate you. Adapted from Fortune, August 19 1998

51. 20.05.04© Organization Futures LLC 200450 Evaluate Your Week  Which goals did I achieve? What empowered me to accomplish these goals? What challenges did I encounter? How did I overcome them? Was achieving these goals the best use of my time? Did my focus on these goals blind me to others?  Which goals did I not achieve? What kept me from accomplishing these goals? What unmet goals should be carried forward? How much of my time was spent in Quadrants II & I? What can I learn from the week as a whole

52. 20.05.04© Organization Futures LLC 200451 Peter Senge: Learning is a journey. 1. Personal Mastery – Seeing reality as it really is 2. Shared Vision – Aiming high, compelling dream, energetic harmony, exhilarating motivation 3. Mental Models – Removing internal restrictions 4. Team Learning – Synergy from the group, dialogue not discussion, accessing each other, using a facilitator, innovative approaches 5. Systems Thinking – The whole picture The Fifth Discipline: The Art and Practice of The Learning Organization (1994)

53. 20.05.04© Organization Futures LLC 200452 Learning Systems Individual Learning Personal motivation and performance Personal assessment and change Knowledge Management New knowledge, tools, strategies and policies Mechanisms to capture, share and use knowledge Learning Organization Focus on Individual and team thinking processes Moving from data to knowledge to wisdom Transformation from new knowledge

54. 20.05.04© Organization Futures LLC 200453 Pick the BIG issues Work on them RIGHT Issue Small BIG Approach Wrong no gain disaster RIGHT little gain YES!

55. 20.05.04© Organization Futures LLC 200454 Interviews as Assessment Interviews with Staff involved Board members Interested outsiders Ask the same 10 basic questions (image, effectiveness, barriers, opportunities, etc.) Confidential basis Report as basis of plans and recommendations

56. 20.05.04© Organization Futures LLC 200455 Benchmarking Track how your top 3-5 competitors work Program activities and results Overhead costs Fundraising growth Fundraising methods Get data from their public reports Become a donor to see how they treat you Track them regularly Identify what they do well and how they do it Use the information to set your own improvements

57. 20.05.04© Organization Futures LLC 200456 Leadership Showing vision Getting commitment Delegating Communicating Fostering change Supporting others

58. 20.05.04© Organization Futures LLC 200457 Leadership Potential Key among leadership capacities are the ability to Develop self-awareness Increase self-confidence Take a broad, systemic view Think creatively Learn from experience Center for Creative Leadership

59. 20.05.04© Organization Futures LLC 200458 What Do Leaders Really Do? Leaders deal with change Prepare organizations for change Drive the change Help people in the organization cope, struggle through it, and prepare for the next phase…of change. The more the change, the more you need strong leadership Promote planned instability

60. 20.05.04© Organization Futures LLC 200459 Change Change is taking place whether we like it or not. The only choice we have is to actively shape it or to passively endure it. If we choose to be passive, the future will punish us. Alex Krauer, Chairman, Novartis

61. 20.05.04© Organization Futures LLC 200460 What Do Managers Really Do? Mangers deal with getting things done Cope with complexity Bring order and consistency to key functions Strategic planning for growth and quality Systems to support people & processes Program development and implementation Promote planned stability

62. 20.05.04© Organization Futures LLC 200461 The How Is Different Management Planning/budgeting Setting targets/goals Establishing detailed steps Allocating resources Creating structures Organizing/staffing Informing Delegating Monitoring Controlling Leadership Setting a direction Creating future vision Defining strategies to achieve vision Aligning people & vision Motivating/inspiring Keeping people moving in the right direction despite obstacles Appealing to human needs, values, emotions

63. 20.05.04© Organization Futures LLC 200462 In Pursuit of Excellence Bias toward action Close to the customer Entrepreneurship Tolerance of failure Quick feedback Tom Peters

64. 20.05.04© Organization Futures LLC 200463 Basics of Team Work Communicate Co-ordinate Share Be open and ready to adapt new skills Strengthen capacities and structures

65. 20.05.04© Organization Futures LLC 200464 Effective Communications Share important information rapidly Don’t be a bottleneck Be open and transparent and caring Give and take feedback constructively

66. 20.05.04© Organization Futures LLC 200465 The Importance of Boards Governance Accountability Representation Programme Effectiveness Financial Efficiency Adequate Resources

67. 20.05.04© Organization Futures LLC 200466 How to Manage Your Board 1. Educate Your Board about Its Responsibilities 2. Give Your Board Real Work 3. Set Policies and Practices for Board Work 4. Engage Board Members in Fundraising 5. Get the Right People on the Board 6. Change the Board to Achieve the Vision

68. 20.05.04© Organization Futures LLC 200467 Role of the Chair Assures the Board functions well Chairs Board meetings Represents the organisation Focuses the staff director on key priorities Leads the evaluation of staff director Strengthens the Board

69. 20.05.04© Organization Futures LLC 200468 Role of All Board Members Participate in Board decisions Provide expertise as needed Focus on governance, not management Support the organisation personally Participate in work of Board committees Help raise money or make contacts

70. 20.05.04© Organization Futures LLC 200469 Approaches to Board Development Make it part of the organisation capacity building Strengthen staff, Board, program, finance, etc. Code of conduct for Board, staff and volunteers Define skills and resources needed on the Board Self-assessment process and analysis Weekend retreat Create systems for strengthening the Board Nominations Committee of the Board Limited terms of office (3 year term, maximum 12 years)

71. 20.05.04© Organization Futures LLC 200470 Key Indicators Executives committed to fundraising Board committed to fundraising Organisational fundraising culture Good systems in place Programs have impact Fundraising is managed Networking is valued

72. 20.05.04© Organization Futures LLC 200471 Good Basic Systems in Place Management level Board level Financial level Reporting

73. 20.05.04© Organization Futures LLC 200472 Secretary General Committed to Fundraising Significant time allocated to fundraising (50%) Personal activities with top donors Fundraising high on agendas Assures fundraising is successful or else…

74. 20.05.04© Organization Futures LLC 200473 Board Committed to Fundraising Contacts and prestige Budget support Active fundraising committee Individual board member fundraising activity Fundraising high on agendas

75. 20.05.04© Organization Futures LLC 200474 An Organisational Fundraising Culture Fundraising as a priority Everyone fundraises Know and meet the needs of donors Fundraising in everyone’s job description … and evaluation

76. 20.05.04© Organization Futures LLC 200475 Governance Business, government, international members Responsibilities of board, officers, committees Management, programme, fundraising Ongoing strengthening Qualifications Management/finance experts Fundraising/marketing experts Programme experts Contacts Work

77. 20.05.04© Organization Futures LLC 200476 Management Involving people and sharing information Changing activities to achieve objectives Finding ways around barriers Getting the board to work Supporting staff Bias for action

78. 20.05.04© Organization Futures LLC 200477 Fundraising Understanding current and potential sources of funding Getting everyone else involved Finding new approaches Moving quickly

79. 20.05.04© Organization Futures LLC 200478 Essential Predictors of RD Success The Chair of the Board Competent Committed The Chief Executive Competent Committed The Fundraising Director Competent Enthusiastic

80. 20.05.04© Organization Futures LLC 200479 Organization Futures LLC Consultancy to help organizations assure their future Analytic Studies to determine needs and action Consulting in Strategic Planning Team, Management and Board Development Fundraising and Skills Training Workshops Ken Phillips, Fundraising and Capacity Building Rebecca Stiles Phillips, Management and Leadership Organization Futures LLC 32 Wykeham Road, Washington, CT 06793 USA Tel +1 860 868 9260 Fax +1 860 868 9261 Email NGOFUTURES@aol.comNGOFUTURES@aol.com www.OrganizationFutures.com