SUSTAINABLE BUSINESS MODEL

How does an organization raise and spend money to fulfill its mission and strategic goals? Effective nonprofits build their business model on a well-developed understanding of the market, work to ensure all programs are financially viable and cultivate a strong culture of philanthropy.

HOW YOU DEVELOP RESOURCES TO
POSITION YOUR ORGANIZATION FOR SUCCESS

FINANCIAL VIABILITY

Our programs are financially viable and incorporate earned revenue opportunities where possible.

Every nonprofit program should have a clear revenue strategy. This may include an earned income model, such as a fee-for-service, or a fundraising mix incorporating philanthropic contributions from individuals, charitable foundation grants and government contracts. Programming should contribute financially to an organization’s bottom line, with relatively few programs requiring a subsidy from unrestricted funds.

VALUE PROPOSITION

We have a well-developed positioning of our organization within our competitive and cooperative landscape.

A value proposition is an important base for a business model, and requires regular reflection and tweaking as the community need and the target audience and market evolve. Determining what sets you apart from others vying for foundation dollars or donations and why a potential client would choose you over another nonprofit or for-profit competitor are some of the critical questions to consider.

BUDGETING

Our budget process and reporting are fiscally sound, transparent and based on realistic assumptions.

A nonprofit’s annual budget is a critical tool which reflects the strategic priorities of the organization. It should be based on realistic assumptions with every line item assessed individually, taking into account future projected changes in funding. Organizations should also establish and use financial policies and procedures that keep both board and staff accountable.

CULTURE OF PHILANTHROPY

Our board and staff operate as ambassadors, regularly and visibly interacting with donors.

In order to support successful and sustainable fundraising efforts, an organization should focus on cultivating a “culture of philanthropy.” Fundraising must be viewed as a mission-aligned program, with both the board and the Executive Director being committed and personally involved in fundraising initiatives. In addition, all staff and board should serve as advocates and champions for the organization and participate in fundraising efforts.

DEVELOPMENT PLAN

We have an actionable fund development plan that guides our strategy, staffing and activities.

A comprehensive development plan outlines how board and staff will work together to raise philanthropic dollars to support the organization’s mission. The plan should be owned by the organization as a whole, not simply development staff. It details several key components, including strategic and financial goals, identification of target markets, cultivation and solicitation strategies, metrics and timetables, and key roles and responsibilities.

STABLE FUNDING

Our funding portfolio is stable and predictable.

While funding diversification can be critical to insulating an organization from risk, perhaps even more important is the stability and predictability of funding sources. For example, an organization that is heavily reliant on grants may find that this funding source is not predictable enough year to year and may explore other avenues for building out diverse revenue streams.

The Nonprofit Effectiveness Framework: Six Critical Elements to Nonprofit Work

Mission Capital has identified six elements that are critical to all organizations, regardless of size, mission or scope. This guide provides definitions, guidance, tools and resources to help you understand the elements of the Nonprofit Effectiveness Framework, including:

  • Clarity of Purpose
  • Sustainable Business Model
  • The Right Leadership
  • Smart Operations
  • Implementation and Improvement
  • Strategic Collaboration

Mission Capital Services and Resources

Our team of consultants can help you evaluate your nonprofit’s revenue strategies and determine the skills, tools and financial plans needed to fuel your work.

This checklist can help nonprofit board and staff evaluate the strength of an organization’s finances.

Attend expert-led courses with topics ranging from strategic business planning to outcomes management.

For nonprofits with an earned revenue model, we’ve seen an emergence of creative investment options such as social impact loans and program related investments (PRIs).

Get insights from Austin-area EDs and development directors about the state of fundraising, and recommendations for more effective fundraising practices.

The Business Model Canvas can help nonprofits create a framework and structured approach to tactical planning as well as building a case for funding.

A set of questions and considerations to use when analyzing financial reports.

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Other Resources

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How To Craft a Unique Value Proposition for Your Organization

Developing a strong, convincing unique value proposition is a critical first step in developing a successful development plan.

Creating a Fund Development Plan That Produces Ownership and Results

This resource provides tips and tools to use when creating a fund development plan.

The Sustainability Mindset

Jeanne Bell and Steve Zimmerman present a field guide to the matrix map—a powerful tool for nonprofit strategic decision-making.

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