Monday, June 20, 2016

The Money & Mission Balance

How much of a reserve fund should you have?

We can debate exactly how much is too much some other day, but I bet you know your nonprofit should have a much bigger reserve than it has now.  Could your organization survive another Great Recession?

The challenge we all face is finding that balance between “Money” and “Mission.”  Nonprofits don’t exist to “make money.” But we need it to fuel our efforts – short run and long run.  This past Spring I co-taught a graduate fundraising course for our Center for Philanthropy & Nonprofit Leadership at University of Maryland.  Our mantra was “No Money, No Mission.

If your organization wants to exist to serve others in the long run – which most nonprofits do – then I suggest that you budget effectively for the long run by proactively setting up a Long Term Investment Fund.

Here is the budgeting process I recommend:

1.  Conservatively forecast revenue.  NOTE: Don’t start with expenses on what you WANT to spend.  Start with reasonable forecasts for revenue and then set expenses.  Otherwise, you will tend to overestimate revenue.*

2.  Liberally forecast expenses for programs/activities that you would like to undertake. 

3.  Add an additional expense line in the amount of 2% of revenue for “Long Term Investment Fund”

4.  Eliminate expenses until you have a projected surplus of 2% of revenue

If you follow this faithfully then you should produce a solid surplus every year that can go into your Long Term Investment Fund (reserves).

And yes, you will probably have to cut some funding from programs in the coming year in order to meet the surplus and reserve targets.  Maybe you don’t get all the way to the 2% targets in the first year you do this, but I encourage you to work toward them.  Otherwise, you will never have enough of a reserve.

This is really not about Money vs. Mission.  It is about Mission today or Mission today AND tomorrow.  It is hard to discipline one’s self for today because you are CEO now or Board Chair now, but you need to think of tomorrow and being prepared to withstand another Great Recession.  Those you serve will need you then even more than they do now – and you need to be there!

No Money No Mission!


*Forecasts are reasonably predictable – based on data.  Goals are what you WANT.  Forecasts are what you are sure of and they belong in budgets – not goals.


For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting

Monday, June 6, 2016

Your Summer Staff Retreat

Many organizations like to take a day during the summer to call a “time out” and gather the staff together for a retreat.  Depending on the size of the organization, this could involve everyone or, at larger organizations, departments may end up having their own retreats.

What makes for a successful retreat?  Here are some tips:

*It’s a Retreat.  Some organizations say they want a “Charge” or an “Advance” – not a “Retreat.” There is a time and place for all of these.  The type of “Retreat” I am referencing is when we have all been working really hard all year and we want to relax, celebrate, pause, and reflect.  You can Charge later.

*Get Away.  It does not have to be held at a fancy, expensive lodge in the woods.  It can be as simple as a local park or conference room at a hotel.  Just get out of the office.

*Unplug.  Turn in all smart phones at the beginning of the day and give them back when the day is done.  Have one phone number that everyone can give out for emergencies.

*Set Clear Expectations/Goals/Agenda.  A “Retreat” means something different to a lot of people.  Make clear what the expectations are for the day.

*Don’t Over-Program.  The idea is to relax, celebrate, pause, and reflect.  Give yourselves time to do that.

*Highlights for the Year.  Take some time to reflect upon the most important accomplishments for the year.  Celebrate!  You have been working hard.

*Lessons Learned.  This can start as an individual reflection and then move to the organizational level.  What have we learned about how to do our work most effectively?

*Small Groups.  Do a lot of activities in small groups with reports back to the larger group.  Mix the groups up so people get to know others even better.

*Reconnect to Mission/Vision.  Make sure to wrap up with some activities that remind everyone of the important work that you do, the impact you make, and your visions for the future.  Success stories are a nice way to do this.

*What else?  There are lots of other productive activities you can do to round out a solid staff retreat – ropes course, team-building exercises, personality assessments, etc.   

Take some chill time this summer to Retreat with your team – to relax, pause, reflect, and celebrate the Mission Impact you are making.  You all have been working hard!  You deserve it!!!


For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.

Wednesday, May 25, 2016

Your Strategy & Your Board

How involved should your Board be with your strategic planning process?

As usual, opinions vary all over the map on this question.

On one end of the spectrum, some people view strategy-making as the responsibility of the staff.  The Board should be generally informed – and certainly consulted if anything “wild” is being considered – but their main role is to ask good questions, and then approve “management’s” strategy.  And they should definitely stay out of reviewing annual operating plans.

On the other side, there are those who believe that the entire Board needs to be intimately involved with the entire strategy process – including a careful review of a detailed implementation plan.  Granted, some of these tend to be more of our smaller nonprofits – but this philosophy exists even in larger organizations.

Which is right and how do you decide what is best for your organization?

In my view, it is essential to involve every Board in three different aspects of the strategy process:

*Mission Affirmation:  What impact do we want to make and for whom/what?

*Mission Metrics:  What metrics will we use to track progress?

*Visioning:  What would the world look like if we were accomplishing our mission 100%?  What would our organization look like, ideally, so we have the opportunity to accomplish our mission as effectively as possible?

Beyond that, the next question I encourage clients to ask themselves is “How instrumental will the Board be in the successful implementation of this strategy?”  The more important they are to successful implementation – and that includes giving and raising money – the more involved they should be.  You can include the Board – or at least Board representatives – in the setting of Strategic Goals, SWOTs (Strengths, Weaknesses, Opportunities, Threats), and Strategy Themes.

As an example, a few years ago I was consulting with a group and a core of their Board was very involved with the strategy process.  They came up with an exciting vision and participated in creating some really big, bold goals.  At the end of the process, the Board members were fired up!  And this Board is experiencing a lot of success in accomplishing those goals – including raising a lot of money.  I seriously doubt that would have had the passion they now have, had they not been so involved.

Engage your Board properly with strategy and make even more of a Mission Impact!


For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.


Tuesday, May 10, 2016

Building Bridges

For the past many months, construction workers have been tearing down and then rebuilding both sides of a bridge I take to work every morning.  Traffic was redirected over one side while they worked on the other.  So, I have been able to observe their daily progress – and I have a new appreciation for everything it takes to build strong bridges.

I think that relates to organizations as well.

Many organizations – especially nonprofits – are engaged in collaborations, strategic alliances, partnerships, etc. these days.  But how well have you built the bridges to these partner organizations?  Here are some observations:

Pittsburgh is the City of Bridges and this is my favorite one there -
The Roberto Clemente Bridge, which stretches from downtown to
PNC Park, home of my beloved Pittsburgh Pirates
*Strong Bridges are Heavily Reinforced.  I am so happy to report that my new bridge has layers and layers of materials which will fortify the concrete when it is ready to be poured.  How strongly reinforced are your relationships with your partners?

*Strong Bridges Take Time!  Sure it is inconvenient to be rerouted for so many months.  But I am very confident about driving on this new bridge after watching the workers carefully take the time needed to do this right.  Are you trying to build partnerships too quickly?

*Bridges are Inspected Regularly.  I like knowing that my new bridge will be inspected regularly even though I am very confident in how well it is being built.  How often do you assess the quality of your partnerships?

Collaborations and partnerships are great ways to leverage Mission Impact, so long as we take the Time to build and Reinforce relationships – and occasionally Assess them.


For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.


Tuesday, April 26, 2016

Improving Your ROF: “Return on Failure”

The cover of the new May issue of Harvard Business Review is titled “How to Really Learn From Failure.”  In the article, the authors suggest three disciplines of making sure that you can “Increase Your Return on Failure.”*

Do you do an “After Action Review” at the conclusion of every project?  This is highly recommended.  When you do it, make sure to point out the positive aspects of the project and the things that could have been done better.  Don’t fall into the trap of just ignoring failures or being embarrassed about them.  Here are the three tips from the HBR authors:

1.  Learn from Every Failure.  While it can be painful to look back, we need to discipline ourselves to do this even if we are very disappointed.  Pixar’s President, Ed Catmull, is quoted in the article: “Mistakes aren’t a necessary evil.  They aren’t evil at all.  They are the inevitable consequence of doing something new . . . and should be seen as valuable.”

2.  Share the Lessons.  Get over the embarrassment factor.  Set aside a time at staff meetings to share what people have learned from failures or setbacks.  If you are a larger organization, perhaps consider a place to post these electronically or on an intranet.  The HBR authors suggest Triple F Reviews: do them Fast, Frequently, with a Forward-looking focus on learning.

3.  Review Your Pattern of Failure.  Every now and then sit back and review at your list of failures as a whole and look for patterns.  Are there flaws in your decision-making processes?  Consider whether your failure rate is too high or too low?  If it is too high then maybe you need to add some more conservative team members who will help critically review options.  Or maybe you need to add more risk-takers if your failure rate is too low.  Without some failure, there will be limited learning and innovation.

If you practice these disciplines of engaging failure from a positive perspective you will improve your “Return on Failure” and make even more of a Mission Impact.

*J. Birkinshaw & M. Hass, “Increase Your Return on Failure,” Harvard Business Review, May 2016, pp. 90-93.


For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.