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Growth Business Planning

A Conversation on Sustaining Rapid Growth In Nonprofits
Summary of meeting hosted by Richard Smith, Co-Chair of the Smith Family Foundation Board of Trustees, which gave representatives from six organizations receiving Smith Family Foundation Capacity Building Grants an opportunity to share with funders their experiences in navigating their organizations through periods of rapid growth. The report includes dialogue between funders and grantees on how they might best collaborate in growing worthy organizations to scale.

An Information OASIS: The Design and Implementation of Comprehensive and Customized Client Information and Tracking Systems
Despite increasing demands for outcome measurement, nonprofit organizations typically do not have the capacity to collect, analyze and use outcome information. This paper describes the process of planning and developing customized tracking systems for nonprofit organizations. The system is called OASIS (Ongoing Assessment of Social Impacts), and was supported by The Roberts Enterprise Development Fund and a collaboration of other funding partners. The goal is to help nonprofit managers assess whether their organization is having the desired impact.

Approaches to Scaling Social Impact
Organizations face options about what to scale and how to scale their impact. The spectrum of goals and strategies for creating and scaling social impact ranges from impact through direct service to impact through indirect influence. By selecting combinations of goals and strategies from this “tool box,” organizations can craft a strategy for scaling social impact.

Back to School: Lessons from Past Mistakes Have Helped Teach for America Set—and Meet—Ambitious Plans for Growth
Discusses the issues confronting Teach for America during its rapid expansion over the past nine years and what it is planning for its next stage of expansion which is being funded by a $60 million growth fund.

Building Capacity in Nonprofit Organizations
Demonstrates how nonprofit capacity is intertwined with community capacity and offers a perspective on how nonprofits and funders alike might consider efforts to build capacity in nonprofit organizations and the sector as a whole.

Building From Strength: Replication As a Strategy for Expanding Social Programs That Work
This study of replication was undertaken to investigate its potential as a strategy for extending the scale of effective services in a number of areas of domestic social policy. One goal of the work was to contribute, at a time of severe austerity and budget constraint, to the cost-effective use of scarce resources available for domestic investment. A second goal was to consider possible steps that might be taken by foundations and public agencies to help promising local programs expand their activities to new sites by building upon the body of knowledge described in this study.

Building Stronger Nonprofits Through Better Financial Management: Early Efforts in 26 Youth-Serving Organizations
The Strengthening Financial Management in Out-of-School Time initiative (SFM) grew out of The Wallace Foundation’s long-standing commitment to improving the quality of services for youth during non-school hours and the realization that even successful nonprofits face financial management challenges that have an impact on their ability to achieve their missions. The four-year initiative seeks to improve the financial management systems of 26 well-respected OST-providing nonprofit organizations in Chicago. The report describes the financial management challenges of participating organizations at the start of SFM, as well as their progress to date.

Business Planning for Nonprofit What it is and Why it Matters
Business planning encourages strategic thinking and is a time to connect the dots between mission and programs, to specify the resources that will be required to deliver those programs, and to establish performance measures that allow everyone to understand if the desired results are being achieved.

But Does It Work? How Best to Assess Program Performance
There have been significant advances in the development of effective reporting systems that can track the effectiveness of programs; however, many fall short of what is considered scientifically valid evidence of effectiveness. This article reports on the work done by the Edna McConnell Clark Foundation which measures programs at three levels of effectiveness: “apparent,” “demonstrated,” and “proven.” By employing these performance assessments, donors can better fund programs that truly work.

Capital Structure Counts: The Business Roots of Capacity and Mission at Nonprofits
Capital structure is central to the success or failure of a nonprofit enterprise. Understanding the impact of capital structure on program and organizational capacity can help nonprofit managers and their funders better plan for growth and change. This monograph is a work-in-progress illustrating how organizations, regardless of their mission, often have similar underlying businesses. It explores a few examples of typical capital structures driving these businesses.

Case Study: Managing Growth - How a Boston Educational-Services Nonprofit is Realizing Its Own Potential for Growth So That Its Scholars Can Realize Theirs
A case study of educational services organization, the Steppingstone Academy in Boston offers a framework for making growth decisions in social purpose organizations.

Catalyzing Networks for Social Change: A Funder's Guide
This publication explores what it takes to cultivate a network mindset, and offers recommendations for how funders can effectively build the capacity of networks and share what they're learning with the broader field. This guide is for grantmakers who are just beginning to explore networks and for those further along who want to reflect on their practice.

ChildFinance: Changing an Ecosystem to Achieve Social Impact
This case study on Aflatoun, one of the world's leading social enterprises, examines how to create a "Path to Ecosystem Change" in order to achieve greater social impact.

Collaborating to Innovate: Achievements and Challenges in the New York City Sectors Planning Phase
In 2004, the New York City Department of Small Business Services and representatives from the New York City Workforce Development Funders Group joined together to form the Workforce Innovation Fund (WIF) with the goal of sharing expertise and learning and providing an avenue to merge resources to support common goals. WIF's first project was the New York City Sectors Initiative (NYCSI), a project aimed at creating a new model for workforce development in New York City one that would be responsive both to employers and job seekers.

Costs are Cool: The Strategic Value of Economic Clarity
Nonprofit leaders need to carefully strategize on tradeoffs and choices about the most effective way to allocate available resources among competing priorities that impact daily activities of the programs it supports, and the initiatives it pursues.

Creating a Capital Curve for Social Enterprises
A key question many impact investors have is how best to arrange the financing mix of the social businesses they support in order to achieve greatest possible impact. Acumen Fund has worked with thousands of social enterprises to help them scale their businesses. This paper shares Acumen’s insight into how best to help social enterprises navigate the path towards scale and sustainability.

Cultivate Your Ecosystem
Social entrepreneurs not only must understand the broad environment in which they work, but also must shape those environments to support their goals, when feasible. Borrowing insights from the field of ecology, the authors offer an ecosystems framework to help social entrepreneurs create long-lasting and significant social change.

Don't Compromise "Good Overhead" (Even in Tough Times)
Funders are likely to scrutinize organizational overhead more than ever when the economy is struggling. But in conducting due diligence on a nonprofit, a would-be donor should never assume that low overhead is a sign of efficiency. Often it means the organization is stretched too thin to be healthy, which ultimately can hurt the nonprofit, donors and beneficiaries alike. Both funders and nonprofits have a stake in guarding "good overhead," the infrastructure investments that are the backbone to creating and growing a nonprofit's impact.

Driving Strategy for Social Impact
For several decades, the private sector has grappled with the role strategy plays in corporate growth and success. Yet the social sector — encompassing nonprofits, foundations, and corporate citizenship programs — continues to struggle to come to terms with strategy, both conceptually and in practice. For nonprofits and funders, the bottom line is not characterized by metrics such as market share or profit margin, as it is in the private sector. Rather, success is defined by social impact — the improvement that we can expect to see as a result of an investment in an organization, initiative, or program. Thus, strategy is the pathway to impact — to the change we seek to effect in society. More precisely, TCC Group defines strategy as “an iterative framework that articulates success in terms of desired outcomes, sets priorities, and guides decision making in order to maximize effectiveness.”

Effective Capacity Building in Nonprofit Organizations
This report brings some common language to the discussion of capacity building and offers insights and examples of how nonprofits have pursued building up their organizational muscle. The report contributes to the growing national conversation about how to help nonprofits become stronger, more sustainable, and better able to serve their communities. McKinsey & Company prepared the study at the request of VPP. McKinsey also developed a practical assessment tool for this report that nonprofits can use to measure their own organizational capacity.

Fire, Aim, Ready: Why Most Foundation-Funded Capacity Building Efforts Miss the Mark
Makes the case that today, foundation-funded capacity building has not been successful. The author provides some guidelines to help refocus this effort. Many of the ideas center around leadership development, which the author differentiates from management training.

Funder Networks in Action: Understanding Their Potential for Philanthropy
This map shows funder networks concerned with improving member satisfaction, based on GEO's research on funder networks.

Good Growth, Bad Growth, And How to Tell the Difference
When nonprofit executives talk about growth, it’s usually in positive terms. However, when growth isn’t carefully planned and managed, bigger is not better and may turn out to be worse. This article, published by The Conservation Company, discusses how the nonprofit world is very different from what it was a decade ago. Funding sources have tightened, while the demand for services has expanded and intensified. In this new environment, growth has become a more compelling issue-and a far more complex one.

Good to Great: Lessons for the Social Sector
Jim Collins, author of Good to Great: Why Some Companies Make the Leap... and Other's Don't, discusses the challenges the social sector faces and his monograph, Good to Great and the Social Sector: Why Business Thinking Is Not the Answer.

Guide to Effective Social Investing
This guide is intended to provide a means for bringing greater rationality to the ways in which nonprofits are selected to receive funds, and for clarifying how to think about the measurable social value that they - and those who invest in them - can and should be held accountable for creating.

Hidden in Plain Site - Understanding Nonprofit Capital Structure
Highlights capital structure as a critical driver of mission and programs, as well as organizational capacity illustrating how funders often inadvertently contribute to the undercapitalization of nonprofits and suggests ways of reversing poor funding practices.

How Do Networks Support Scale?
In the midst of a mounting imperative to achieve better and more results, grantmakers of all kinds are shifting the way they think about scale, emphasizing not size or reach but impact.

How Does Financial Sustainability Relate to Growth – and What Can Grantmakers Do to Support It?
In the midst of a prolonged economic downturn and a mounting imperative to achieve better and more results, grantmakers of all kinds are seeking to better understand what works, why and how — and are shifting the way they think about scale, emphasizing not size or reach but impact.

How Nonprofits Get Really Big
Nonprofits that have reached $50 million in annual revenue raised the bulk of their money from a single type of funder such as corporations or government – and not, as conventional wisdom would recommend, by going after diverse sources of funding and just as importantly created professional organizations tailored to the needs of their primary funding sources.

Impact Investing: Harnessing Capital Markets to Drive Development at Scale
Impact investing is emerging at a time when financial markets worldwide are in turmoil. While industry participants can do little in the short term to address the wealth destruction that is reducing available capital, they can work strategically to position the industry to absorb a greater share of investment capital when markets inevitably thaw.

Linking Mission and Money: An Introduction to Nonprofit Capitalization
For every nonprofit organization, there is a tension between the pursuit of mission and the maintenance of financial viability. Any plan to change or expand activities needs a parallel capitalization strategy - a plan for how the organization's capital structure should be shaped to support the plan. This monograph describes a "holistic" approach to growth.

Making Change: How Social Movements Work and How to Support Them
In recent years, there has been a renewed philanthropic interest and openness to investing in social movements and policy change. This document, which is published by University of Southern California with funding by The California Endowment, seeks to provide a guidepost to this interest by detailing what makes for a successful social movement, what capacities need to be developed, and what funding opportunities might exist.

Making Growth Work: Planning and Management Guidelines for Nonprofit Organizations
This briefing paper published by The Conservation Company draws on its experience examining the benefits, dimensions, and challenges of organizational growth, and discusses techniques for managing growth in a way that maximizes a nonprofit’s impact.

Managing Multi-site Nonprofits
Explores ways to accommodate the unique dynamics of the multisite nonprofit organization to inform and inspire management decision and action by focusing on Outward Bound USA, Planned Parenthood, Habitat for Humanity, SOS Kinderorf, and The Nature Conservancy.

Nonprofit Geographic Expansion: Branches, Affiliates, or Both?
Entrepreneurship Working Paper, Fuqua School of Business, Duke University A survey of U.S. nonprofit leaders experience with or considering expanding their organizations via branches, affiliates, or both, providing greater insight into the process of geographic expansion and exploring some of the key similarities and differences across these three organizational structures., motivations, challenges, and benefits of nonprofit expansion via a range of organizational structures.

Nonprofit Growth Capital: Defining, Measuring and Managing Growth Capital in Nonprofit Enterprises: Part One: Building is not Buying
Building an enterprise is fundamentally different than buying services from that enterprise. And yet, standard nonprofit accounting sheds no light on the building vs. buying distinction. George Overholser believes that this missing distinction is a major reason why a market for nonprofit growth capital has failed to materialize. The good news is that the system can be fixed more easily than one might expect. Read this report to find out more on this subject.

Nonprofit Organizations and Their Local Affiliates: A Study in Organizational Forms
Compares two structures semi-autonomous franchise model and a wholly-owned branch office model against the distinctive management concerns of nonprofits and argues the advantages of the franchise structure and discussing mechanisms for enhancing intra-organizational coordination in that model.

On the Money, The Key Financial Challenges Facing Nonprofits Today - and How Grantmakers Can Help
This publication highlights the financial challenges nonprofits face and the ways in which grantmakers are both improving the situation as well as perpetuating the problem.

Organizational Lessons for Nonprofits [requires purchase]
Nonprofit leaders zealously build programs and raise money, but often neglect the organizational structures and management processes that help institutions endure as demonstrated in the near-demise and dramatic turnaround of Teach For America.

Reflections on Capacity Building
Ignoring basic organizational needs and more generic management assistance of grantees and failing to provide adequate resources to address them can significantly compromise the larger goals of grantmaking programs.

Social Impact Markets
In this article, Andrew Wolk of Root Cause argues that the time has come for a social impact market -- one that fosters innovation and collaboration across the governmental, business, and nonprofit sectors to maximize scarce resources and spread solutions. In the private sector, financial markets provide the infrastructure, information, and incentives to help move capital based on performance. Similarly, social impact markets are emerging as essential mechanisms to enable individuals or institutions to provide financial, volunteer, or in-kind resources with the expectation of those resources resulting in social impact.

Social Movements and Philanthropy: How Foundations Can Support Movement Building
This report published by The Foundation Review identifies five core elements to movement building: organizing an authentic base; leadership; vision and ideas; alliances; and advocacy infrastructure. Because a funder's role should focus on supporting movement building, it should, likewise, focus on outcomes and benchmarks related to progress associated with developing the five core components of movement building.

Social Return on Investment (Overview, Guide & Methodology)
Understanding how to capture and quantify the value created by the nonprofit sector’s going beyond “good cause” criteria to measuring the resulting benefit to individuals and society is becoming increasingly important in the accessing limited charitable dollars.

Social Venture Partners Capacity Building Model, 2003
SVP works within a capacity building model to provide cash grants, skilled volunteers, professional consultants, leadership development and management training opportunities to its investees.

Stories from the Field: Fiscal Fitness for Nonprofits
This project put 25 of Chicago's leading after-school program through a "financial workout". This report describes the financial exercises and results of activities. It stresses the importance of fiscal health in nonprofit organizations.

Technology-Related Grantmaking: Amplifying Social Impact in a Connected Age
This research project was motivated by ZeroDivide’s longstanding commitment to strengthening the quality and quantity of philanthropic investment in nonprofits’ use of technology for social impact — with an emphasis on nonprofits representing historically underserved communities. This report outlines funders’ interests in technology-related grantmaking for social benefit, identifies the key barriers to increased philanthropic investment, and explores suggestions that could help the sector in surmounting these barriers.

Ten Nonprofit Funding Models
Unlike the profit sector, the nonprofit sector has not been strong in defining their funding strategies. This article outlines 10 funding models of some of the largest nonprofits in the U.S. These models can serve as guides to help nonprofits leaders more clearly define their own funding models to better support the growth of their organizations.

The Balanced Scorecard - Measures that Drive Performance
Developed in the early 1990’s the 'balanced scorecard' provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective.

The Growth of the Social Enterprise, Q&A with Jan Wei-Skillern
To branch or affiliate? Different organizational structures have different strategic implications for nonprofit expansion, say HBS’s Jane Wei-Skillern and Duke-based colleague Beth Battle Anderson.

The Rise of Social Capital Market Intermediaries
This article from the Stanford Social Innovation Review explores the advances that information and funding intermediaries have brought to the social sector, and the challenges—in concept and implementation—that remain for achieving true efficiency in the work of social change. Information intermediaries—which include philanthropic prizes, social networks, and new measurement and evaluation entities—have significantly enhanced efficiency in the social capital market. There has also been progress in creating strong funding intermediaries, though significantly less than the progress achieved by information intermediaries. Donors and grantmakers are allocating money more efficiently, thanks to the emergence of information and funding intermediaries.

The Value of Measuring Social Return on Investment
If you care about social return on investment (SROI) as a measure and as a management tool, then the report “Measuring and/or Estimating Social Value Creation” published by the Bill & Melinda Gates Foundation is a must-read. It provides a thoughtful synthesis of various approaches, each of which can help decision makers understand the relative benefits vs. cost of different programs and organizations. However, as Bridgespan Group Partner Dickie Steele notes in this commentary, it’s also important to keep in mind three overarching factors that further affect their use and applicability.

Truth or Consequences: The Implication of Financial Decisions
NFF analyzed over 1,000 nonprofits with findings that proved that many of the conventional ideas about nonprofits’ financial decisions can lead to strategic errors that can undermine organizational effectiveness. The three areas of focus were: 1) the need for a diverse revenue base, 2) the pros and cons of government funding, and 3) the value of facility ownership.

Virtuous Capital: What Foundations Can Learn from Venture Capitalists [requires purchase]
This article published by Harvard Business Review address new ways U.S. foundations and nonprofits, that work diligently on behalf of society's most needy, can learn to be more effective with their limited resources. Venture capital firms offer a helpful benchmark for foundations and nonprofits on how to invest not only in program innovation but also in organizational needs. Foundations and nonprofits are encouraged to develop hands-on partnering skills to more effectively achieve their respective missions.

Way to Grow: Charities Use Business Practices to Rapidly Expand Their Programs
This article from The Chronicle of Philanthropy discusses the trend of young charities seeking to go to scale, including a look at what various organizations have struggled with, and their corresponding growth strategies.