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Our Secrets for Growing  Nonprofits 25 Percent A Year

If you are trying to solve an important problem, don't nibble around the edges. Think like a startup – go big or go home.

By Donald Summers

Have you ever heard of a process that is proven to help nonprofits overcome chronic management, performance and financial barriers, one that allows them to capture their full potential and grow 25 percent annually? One that works consistently across organizational type, field, size and location?

It exists. It's described here. It took us a decade to figure it out, drawing on the entirety of the organizational literature, hard work with over 100 nonprofits – and a lot of wisdom gained through mistakes.

The process isn't easy. It requires focus, grit, optimism, courage, discipline, and urgency. But it works.

First, nonprofits that want to overcome longstanding barriers to growth and performance must get out of the nonprofit mindset and into the far more productive frame of a performance and growth oriented enterprise. As the saying goes, "don’t confuse your tax status with your business model.

When they make this transition, nonprofits evolve out of the traditional, constraining culture of poverty to a new realization: they want to make as much darn money as possible—with with absolute integrity, transparency and accountability—so they can deliver as much good as possible.

Here’s the process in a nutshell. Unburden yourself from the traditional, soft-focus conventions around “strategic planning” and “mission, vision, values.” Instead, embark on concrete, specific, sharp-focus business planning. Adopt a solutions orientation and show compelling proof of the social return-on-investment. Then, build relationships and solicit partnerships across all possible revenue domains. Finally, track organization wide performance with a dashboard.

Want to stay small and do things the slow, hard way? Set vague goals that are open to multiple interpretations. Produce a ton of narrative and data that overloads your audience. Throw fundraising events and put energy into mass mailings and single-day gift appeals. Produce long annual reports with lots of pictures. (These things sound familiar?)

Want to get big and have a real impact? Again, declare your full potential in a business plan; build relationships with investors and track the conversations with a pipeline; and craft a focused dashboard that measures your key performance indicators.

Here’s a bit more detail. It requires expert guidance, and again, it’s not easy. But it sure beats the alternatives. In our way of thinking, if you are trying to solve an important problem, don't nibble around the edges. Think like a startup. Go big or go home.

Write a business plan. Draft a short (under 10 page) document that answers basic questions: What problem are you solving? How can you prove you are the best at solving this problem? What exactly does success look like, in specific, measurable terms? What are your winning strategies? What is your detailed five-year financial projection, with revenue from all five funding domains (government, foundations, corporations, individuals, and earned income). Remember, you need to get all of this in your plan, with specific, quantitative performance measures. And you need to keep it short. (And once you get this done, boil it down even more into a short pitch deck.)

Find prospective investors. Share you draft plan with everyone who does or should care about you and has the liquidity to invest what you define as a major investment (at least $10K; typically more like $25K; $50K to 100K for larger organizations.) Use events to acquire names; wealth screening tools to identify the highest capacity prospects; referrals from your current supporters; and direct approaches to major funders in your space. If you have a great business plan, and you approach with both humility and urgency, you will get their attention.

Build investor relationships and buy in. Typically this takes 5 to 10 in-person, in-depth meetings. Ask for money, get advice. Ask for advice, get money—eventually. Build trust and relationships by getting advice on your plan and iterating it continuously. Keep it drafty. No slick brochures! Don’t be shy or hide the ball: tell people you are looking for major investments.

Make the proposal. After multiple meetings with prospective investors, you are ready. “Jill, we’ve had a number of robust, in-depth conversations about this organization and we are grateful for your guidance. Now that the plan looks good – with your feedback – we are ready to have you to join us as an investor in making this all happen. May we send you a draft proposal?”

Track your activity. Develop the discipline to measure and report on the number of meetings you have each week with all prospects, sorted by revenue type and the stage of the relationships. The process to do this is well known: it's called a pipeline. Only the biggest, most successful nonprofits run them, and that's why they are big and successful. Read The Four Disciplines of Execution for a primer on how to run focused pipeline meetings. There is a lot of detail required here on measurement, process and protocol, but if you don't know what a pipeline is, start getting curious!

Report on investment. This is where 95 percent of charities fail. You need to demonstrate the specific things that you did with your investors’ money. Saying thank you is woefully inadequate. Report, in person, to all major donors and make sure they come away with a strong sense of value.

Support it all with a great dashboard. Tableau Corporation offers free software and coaching for setting up a dashboard. You should be tracking 1) how much of the problem you are solving versus your long term goal; 2) what your quality indicators are; 3) your financial status, and 4) your revenue status. Like your business plan, your organizational dashboard is simultaneously your internal management document and your external marketing and engagement tool. Be transparent and be accountable.

The devil is in the details. And there's more beneath the short framework outlined here. There is a lot of expertise and elbow grease required to do all this right. But don’t let the difficulty stop you. There are hundreds of thousands of nonprofits out there that are only a fraction of the size they should be. Very few of them are using the performance and growth strategies that are proven to work. But there is a better way. We've seen dozens of great organizations break free from the past and start a new path to high performance, high growth, and maximized impact. If we can get more organizations to join them, we'll have the social revolution we need.

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Donald Summers founded Altruist Partners in 2006. He is a social entrepreneur, speaker, author and management consultant with a long track record of helping organizations achieve dramatic increases in organizational effectiveness and growth. Summers@altruistpartners.com

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