1. the 80th Annual Conference for Community Arts Education
Money & Mission
presented at
the 80th Annual Conference for Community Arts Education
Wednesday, November 15, 2017
Oakland, CA

2. Presenters
Jan Masaoka
Paula Smith Arrigoni

4. Our goals for the day: Understanding key aspects of nonprofit sustainability. Discussing practical strategies to incorporate planning for nonprofit sustainability into regular operations, in alignment with mission.

5. Agenda Part I What is a business model? Strategy?
Impact & finances; mission & money
Charting and analyzing your current business model
Strategic imperatives
A sustainable portfolio/strategy
Part II
Applying the nonprofit sustainability principles to practice in the creative youth development field: Youth Speaks as a case study.
Exercise

6. Lower cost goods, mid to upper middle consumers
Lots of free parking
Newsprint inserts in newspapers

7. High priced, higher income customers
Downtown and high income mall locations
Full color catalogs mailed to high income zip codes

8. All too frequently heard . . . .
Social media
Product sales
Look what THEY’RE doing! We should do that!
Benefit Concert
Online auction
Yeah!
Walk-a-thon
Fees-for-service

9. Different strategies, both successful:

10. Revenue types & sources
Total Revenue
Contributed revenue
Earned revenue

11. Revenue types & sources
Total Revenue
Contributed revenue
Institutions
Individuals: vehicles for asking
Churches
Mail: hot and cold lists
Foundations
Corporations
Phone-a-thon
Service clubs (Rotary, Kiwanis)
Annual gifts
Major gifts solicitations
Planned gifts
Pledges

12. Revenue types & sources
Total Revenue
Earned revenue
Related income
Un-related income
Government contracts
Fees charged to consumers (clients, patrons)
Fees charged to third-party payers

13. Different business models, same mission:

14. The Nonprofit Business Model
Every organization has one whether you know it or not
Explains how a nonprofit generates and allocates revenue to accomplish its mission and remain financially viable
Nearly all nonprofits today are hybrids combining earned income with donations
Business models change over time
Businesses with the same services can have different business models

15. Dual-Bottom Line Strategy
Each activity has two kinds of impact:
Mission impact (external) and
Financial impact (internal)
So a strategy for sustainability must be a strategy that combines both kinds of impact.

16. Nonprofit Business Models
Instead of strategic plans that are different from a fundraising plan or business plan:
Must consider financial viability and mission impact together
Instead of considering activities individually:
Are about how activities fit together and leverage each other

17. Matrix Map
IMPACT
PROFITABILITY

18. Matrix Map IMPACT PROFITABILITY HIGH IMPACT HIGH PROFITABILITY
LOW IMPACT LOW PROFITABILITY
PROFITABILITY

19. Matrix Map
HIGH IMPACT HIGH PROFITABILITY
IMPACT
PROFITABILITY

20. Stars Examples: Important, foundation-funded program
HIGH IMPACT HIGH PROFITABILITY
Examples:
Important, foundation-funded program
Fee-for-service program that makes money
Annual mail donations campaign ?
IMPACT
PROFITABILITY

21. Stop Signs Examples: Little-used Resource Library
LOW IMPACT LOW PROFITABILITY
Examples:
Little-used Resource Library
Program that used to have funding
Stale fundraising event ?
IMPACT
PROFITABILITY

22. Money Trees Examples: Martini parties Luncheon Raffle tickets ? IMPACT
LOW IMPACT (other than money raised HIGH PROFITABILITY
Examples:
Martini parties
Luncheon
Raffle tickets ?
IMPACT
PROFITABILITY

23. Hearts Examples: Advocacy at state level
HIGH IMPACT LOW PROFITABILITY
Examples:
Advocacy at state level
Taking children to see parents in prison
Show of experimental art ?
IMPACT
PROFITABILITY

24. The Matrix Map

25. A single compelling image
Equip rentals
Aha!

26. Variables for Excel sheet
Business line
Profitability
Impact rating
Expenses
Early childhood
$5,000
3.1
$180,000
Facility rental
($12,000)
4.0
$25,000
Citizenship
$18,000
2.8
$90,000
Foundations
$80,000
1.5
$20,000
Note: assign restricted revenues to the business lines to which they are restricted. Assign Unrestricted revenue to the vehicle which brought them in (in the above case, foundations)

27. Relative Impact Examples of criteria Alignment with core mission
Excellence in execution
Scale or volume
Depth
Filling an important gap
Community building
Leverage

28. Example

29. Determining Profitability
Revenue
Expenses
Assign restricted and generated revenues to each business line
Include full costs:
Program Costs
Shared Costs
Admin Costs

30. Community Theater

32. Career Closet Nonprofit
Service clubs
Annual gala

33. Rural AIDS Nonprofit
AIDS program (government funded)
Individual donations

34. The
Strategic
Imperatives

35. Strategic imperatives for Stars
HIGH IMPACT HIGH PROFITABILITY
Instead of
Taking it for granted . . .
Not involving board . . .
Turning your attention to problem areas . . .
IMPACT
PROFITABILITY

36. Strategic imperatives for Stars
HIGH IMPACT HIGH PROFITABILITY
Pay attention.
Keep it a star.
Make sure the board is involved.
Invest time and money.
Grow it.
IMPACT
PROFITABILITY

37. Strategic imperatives for Stop Signs
LOW IMPACT LOW PROFITABILITY
Instead of
Trying once again to improve it . . .
Not thinking about it . . .
IMPACT
Spin it off to another organization
Close it
PROFITABILITY

38. Strategic imperatives for Hearts
HIGH IMPACT LOW PROFITABILITY
Instead of
Closing it because it’s not breaking even . . .
Making it a Sacred Cow that can’t be criticized . . .
IMPACT
PROFITABILITY
Keep it. Celebrate it.
Contain the costs.

39. . . . for Money Trees Instead of Giving it second class status
LOW IMPACT HIGH PROFITABILITY
Instead of
Giving it second class status
Keeping it separate from programs . . .
IMPACT
PROFITABILITY
Water the tree.
Increase impact.

40. Strategic Imperatives

41. Portfolio: BEFORE Local legis Restoration State legis News events
Newsletter
Dinner
Major donors
News events
Policy alerts
Restoration
Scorecard
Schools

42. decisions Local legis Restoration State legis News events Schools
Grow slightly.
Star. Grow given limitations.
Drop except for rare huge issues with high possible impact.
Star. Grow. Increase impact by deepening quality.
HIGH IMPACT HIGH PROFITABILITY
LOW IMPACT LOW PROFITABILITY
HIGH IMPACT LOW PROFITABILITY
LOW IMPACT HIGH PROFITABILITY
Local legis
State legis
Newsletter
Dinner
Major donors
News events
Policy alerts
Restoration
Drop. Lower impact all the time (newspapers). Task force to see if something new could achieve goals better at lower cost.
Schools
Scorecard
Breakeven, some impact. Give away.
Increase impact. Growth not likely. Increase profitability.
Change to e-newsletter to increase impact, reduce costs
Drop. Being done by others.
Increase impact. Grow if possible.

43. Portfolio: AFTER Local legis Restoration Schools State legis
Dinner
PROFITABILITY
Schools
Restoration
State legis
Newsletter
Major donors
Local legis
IMPACT

44. The Business Model Statement
Mission Statement:
Elm Prairie Preservationists works for the restoration and preservation of our prairies so future generations may benefit from their unvarnished beauty and bountiful natural resources.
Business Model Statement:
We educate children to be of stewards of our prairies, supported by government contracts and fees-for-service, and restore prairies with the support of corporations and foundations. When the generosity of individuals makes it possible, we advocate for policies that will protect and preserve our lands.

45. Looking at special events
Impact $
Effort
Senior lunch
high
low
medium
Crab feed
medium but growing
New Year’s mochi making
Sake festival
Golf Tourn.

46. Looking at special events
Impact $
Effort
Type
Action
Senior lunch
high
low
medium
Keep. Contain costs.
Crab feed
medium but growing
Grow. Increase impact.
New Year’s mochi making
Give to church that also has one.
Sake festival
Grow. Increase impact
Golf Tourn.
Increase impact. Age changes?

47. Fast summary 1 2
Make an impact strategy that’s financially viable, and right for YOU.
Identify activities, and analyze them. 3 4
Challenge yourself with the Strategic Imperatives. If we’re not following them, why not?
Use the Matrix Map as an ongoing decision-making tool.

48. Each successful strategy is unique.
For many organizations,
the most precious and
scarcest resource is the
time and attention of its
senior leaders:
Be ruthless about investing
this valuable resource
in the right efforts.

49. Nonprofit Sustainability
josseybass.com
amazon.com