1. YWCA USA Financial Leadership & Management Program
Strengthening Your Business Model
for every woman
Join us on Twitter: @SpectrumSteve
February 3, 2016

2. Why are we doing this? Phase II – Purpose and Outcome
Engage Senior Leadership
Understanding your Association’s business model better
How your programs create exceptional impact in a financially viable manner.
Create a Matrix Map
A visual representation of your organization’s business model.
Make Strategic Decisions
Analyze and make recommendations to strengthen your business model
Outcome
An understanding of your business model and action plan to strengthen it

3. Impact Strategy
Financial Strategy

4. Impact Strategy
Financial Strategy

5. Impact Strategy Financial Strategy
Business Model
Your hypothesis about which impacts will engage human and financial participation
Impact Strategy
Financial Strategy

6. Business Model
Your hypothesis about which impacts will engage human and financial participation
From here, a chosen set of mission-specific and fund development activities that work together to achieve impact and mission.
Every organization’s set of activities is unique and represents management’s best thinking.

7. The Matrix Map

9. Matrix Map Process

10. Matrix Map Process

11. Matrix Map Process

12. Mission Impact Criteria
Contribution to intended impact
Relative to other programs, how well does this program contribute to what the overall organization aims to accomplish?
Excellence in execution
Is this program something that the organization delivers in an exceptional manner?
Scale
How many people are touched or influenced by this program?
Depth
How profound is the level of intervention with this program?
Significant Unmet Need
Is there significant competition or are there similar offerings of this program? Is there an adequate supply of services to meet the demand for them in our community?
Community Building
Does this program build community around the program or the organization as a whole?
Leverage
Does this program benefit from and nurture important relationships and partnerships inside and outside the organization?

14. Matrix Map Process

15. Determining Profitability
Revenue
Surplus or
Profitability
Expenses
Deficit
Taken together then, when we talk about profitability of programs, we are looking at the revenue each program brings in directly either through earned revenue or designated donations and foundation grants offset by the total true costs required to operate the program. This is what generates the surplus – if you have money left over – or the deficit – if expenses are greater than revenue.

16. True Program Costs
Specific Costs
Shared Costs
Admin Costs

17. Matrix Map Process

18. Matrix Map Overview What information do we see on a matrix map:
What we do (bubbles)
Mix of mission-specific (blue) and fund development programs (green) (color of bubbles)
Where we are investing our resources (size of bubbles)
The net financial results of each activity (horizontal axis)
Relative mission impact of each activity (vertical axis)

19. Review Your Matrix Map
What are your initial reactions to your matrix map?
Are there any surprises?
What initial questions might arise for you?

20. What’s the story within your matrix map?

21. the heart- money tree

22. the shining star or money tree

23. the break-even model

24. crisis

25. stagnation

26. How do your bubbles cluster?

27. “Diversification is subject to the laws of diminishing returns” – Clara Miller

28. Has your revenue changed?

29. How do we find the “right revenue” strategy?

30. Review Your Revenue Strategy
Does the current revenue mix reliably produce a modest surplus?

31. Review Your Revenue Strategy
Do we have a reliable source of unrestricted support?

32. Review Your Revenue Strategy
Are our largest sources of income paying for work that we deem essential to our intended impact?

33. Review Your Revenue Strategy
Are we relying on a funding stream that is changing substantially and is that change beyond our control?

34. Review Your Revenue Strategy
Are we relying on a funding stream that is misaligned with our organizational values?

35. Review Your Revenue Strategy
Does the current revenue mix reliably produce a modest surplus?
Do we have a reliable source of unrestricted support?
Are our largest sources of income paying for work that we deem essential to our intended impact?
Are we relying on a funding stream that is changing substantially and is that change beyond our control?
Are we relying on a funding stream that is misaligned with our organizational values?

36. Do you have the
“right revenue”?

37. Understanding Your Market
Other Existing Organizations
Your Organization
New Ideas
Funding Group
User Group
External Environment
These are factors influencing your market. There are four primary factors that directly influence your organization: and one factor that impacts all of them:
New ideas represents: leading edge thinking idea that didn’t generate with you.
Each of these can add pressure to your market.

38. Position in Field or Movement
Who are the 3-5 most similar organization to ours in the market?
Are their programs growing and/or changing in ways that move them closer to or further from our approach and constituency?
Have they developed programming that is superior in impact to ours?

39. Position in Field or Movement
Do we actively contribute to networks critical to our intended impact?
Do we have staff and board members viewed as thought leaders in our community and field?
Do we have strategic relationships in the government and business sectors?

40. Perception Among Donors & Funders
What is the motivation behind the key donors or funder segments?
What is the perceived commitment of our donors and funder segments?
What is our support and revenue strategies trending?
Should we complete a Donor and Funder Commitment Analysis?

41. Perception Among Clients & Participants
Are there any changes in how or which clients and participants are engaging with our organization?
Are clients and participants choosing one or more of the other organizations listed above over us?
Are clients satisfied with our overall level of performance?

42. What is your position
in the market?

43. What’s the story within your matrix map?
Key Messages
What’s the story within your matrix map?

44. Bubble Cluster Key Message
“We meet our budget each year on the back of one program, we need to be continuously innovating that program to nurture its relevance and appeal to constituents and donors” “While we have been financially prudent in not spending what we don’t have on an annual basis, we will never be able to innovate and bring on new programs if we don’t invest in our fundraising capacity and build a meaningful major donor program”

45. Revenue Key Message
“Renewable gifts from individuals are the best complement to our grants and contracts; we need to completely reimagine how we build a powerful culture of philanthropy at our organization to make them possible.” “Our special event revenue has declined consistently over the past three years. We need to determine if this is a dying or a salvageable revenue strategy for our organization. ”

46. Market Landscape Key Message
“Now that XYZ nonprofit has established such highly regarded programming for young women of color, we are likely seeing the last of that funding this year ourselves unless we collaborate or innovate quickly.” “We are making our case well to individual donors in our community, but institutional funders are looking for measurable results that we have not yet built the capacity to provide.”

47. What’s the story within your matrix map?
Key Messages
What’s the story within your matrix map?

48. The Business Model Statement
Intended Impact
Revenue Strategy
Definition
Leadership’s hypothesis about which impacts will engage human and financial participation.
Business Model Statement
What we do.
How we pay for it.

49. The Business Model Statement
We build the skills necessary for low income women to enter the workforce and live independently through adult literacy, GED classes and workforce placement supported by government contracts and advocate for more equitable policies through the generosity of individuals.

50. The Business Model Statement
Spectrum retails management consulting services directly to nonprofit organizations and partners with foundations, national networks and government agencies to offer intensive, cohort-based individual and organizational development programs.

51. Business Model Statement

52. Programmatic Inquiries

53. Programmatic Inquiry The Star Quadrant
Do we understand the needs and motivations of stakeholders who make the star possible?
Are there opportunities to expand the program’s impact and revenue?

54. Programmatic Inquiry The Heart Quadrant
Can we envision this program achieving the same impact with a different cost structure?
Is there a different revenue strategy to consider?

55. Programmatic Inquiry The Money Tree Quadrant
Can the net surplus be increased and if so, what investment will that growth require?
Are there means to reducing the program’s costs and improve the margin?
Are there ways to achieve greater impact by making the program stronger?

56. Programmatic Inquiry The Stop Sign Quadrant
Can we innovate this program to move out of this quadrant?
How long will we give ourselves to move the stop sign?
Is that the best use of resources?

57. Programmatic Level Inquiry

58. What are your programmatic imperatives?

61. What is the cost of delaying a decision?
Mission Cost
Financial Cost
Reputational Cost
Human Capital Cost

62. We’ve seen

63. What is your plan to strengthen your
business model?

64. Traditional strategic planning
Get Ready
Mission, Vision, Values
Assess the Situation (SWOT)
Agree on Priorities
Write the Plan
Implement the Plan
Monitor and Evaluate the Plan
Traditional strategic planning
- Strategic Planning for Nonprofit Organizations by Michael Allison and Jude Kaye

65. What is necessary today is a strategy that breaks free of static plans to be adaptive and directive, that emphasizes learning and control, and that reclaims the value of strategic thinking for the world that now surrounds us.
Dana O’Donovan
Noah Rimland Flower

66. Execution Creates Learning

68. Sustainability is an orientation

69. “It is not a one-time thing, not an episodic thing, not a senior management thing or a board of directors thing. It’s really a mindset and way of organizational being.”
- - The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions

70. Financial Viability
Mission Impact

71. Leadership
Mission Impact
Financial Viability

72. What is one thing you can do on Monday to strengthen your Association’s sustainability?

73. Steve Zimmerman Shelly Schnupp
Spectrum Nonprofit Services Spectrum Nonprofit Services