nonprofit turn-arounds: the road to recovery when your organization is in the red

Nonprofit  Turn-­‐Arounds:  The  Road  to  Recovery  

When  Your  Organization  Is  in  the  Red  

5/26/16  1pm  Eastern  

The  presentation  will  begin  shortly.

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Our  guest  presenter  »Rebecca  Davis,  PhD,  CFRE  @rebeccadavisphd  

President  and  Co-­‐Founder  of  Davis  Nonprofit  Consulting,  LLC.  

Master  Trainer,  graduate  of  the  AFP  Faculty  Training  Academy  

CFRE  since  2007

Nonprofit Turn-Arounds: The Road to Recovery When Your Organization is in the RedRebecca H. Davis, PhD, CFRE

•70% of all turn-around initiatives fail

•Typical corporate turn-around 2 – 3 years

•Each turn-around is unique

What is a “turn-around situation”?

Non-Profit Life Cycle

Recognizing the Problem

• Confront the Brutal Truths (Jim Collins)

• Assessment Tool: http://www.jimcollins.com/tools/diagnostic-tool.pdf (page 9)

• Gather evidence

• Bring facts to light

• Discuss information without finger-pointing or blaming

• Take things off auto-pilot

• Interrupt old plans, events, & strategies

All Turn AroundsFor-Profit and Nonprofit

• Control Costs

• Reduce Spending

• Closely manage cash flow

• Increase revenue

NON-PROFIT Turn Arounds

• What works for corporate turn arounds (like bankruptcy) might not be appropriate for non-profit organizations

Dual Bottom Line: Mission & Money

Nonprofit Sustainability

Image Source: Blackbaud

See free resources and templates at

http://www.nonprofitsustainability.org/templates-by-chapter

Overview of Nonprofit Sustainability and using the Matrix

Map at

https://nonprofitquarterly.org/2014/04/01/the-matrix-map-a-

Nonprofit Sustainability: Strategic Imperatives

Image Source: Nonprofit Quarterly:https://nonprofitquarterly.org/2014/04/01/the-matrix-map-a-powerful-tool-for-mission-focused-nonprofits/

Stars:

Nurture & Grow

Involve Board

Hearts:

Keep & Contain Costs

Stop Signs:

Give Program Away

Money Tree:

Increase Impact

Benchmarking

• Know what’s possible (or likely)

• Identify best-practices

• Determine where you have “runway”

NON-PROFIT Turn Arounds

Dual Markets: “Customers” = Clients + Donors

Donor Stewardship

• Appreciation

• Recognition

• Care of donations, funds, and assets

• Reporting

Create a Plan

“Money doesn’t just walk in and surrender itself.”

Face-to-Face Fundraising

Professional Fundraising Staff

Issue Focus of Organization

Membership Organization?

Annual Survey

One Factor that Matters:

Whether or Not an Organization

Creates a Development Plan

Each goal and strategy needs to be specific and measurable

◦ Grow email list 10%

◦ Make 5 phone calls each month to prospective planned giving donors

◦ Recruit 10 new team captains before April 1st.

Means to an End

Not an End in and of Itself

Not a fundraising technique or strategy – helps, but won’t raise funds without some other

strategy.

Restoration of Confidence

• Internal (Staff and Board Members) and External

Replace With

Secrecy & DenialDialogue

Avoidance & Turf

Protection Collaboration

Passivity &

HelplessnessInitiative

Source: Rosabeth Moss Kanter. 2003. “Leadership and

the Psychology of Turnarounds,” Harvard Business

Review.

Community Members

• Band Wagon Effect

• Invest in Winners

• Need to Know Donation Has Impact

• Want to Invest in Well-Managed Organizations

A Turn Around Case Study

Restoring External Confidence

Re-introduction (to Community):

• Briefing Breakfasts

• Update Website & Other Communication Channels

• Re-Brand

• Face to Face Meetings

Results of Turn Around

• Turned multi-year operational deficit into operational surplus in first year.

• In first two years, increased fundraising support through special events by 126% and contributions by 52%

• Went from brink of insolvency to having 3.5 months of operational reserves during a recession

• Recruited more than 200 new volunteers and managed more than 5,000 volunteer hours.

Build Your Revenue Strategies by Creating a Culture of Philanthropy

• Make fundraising everyone’s job

• Provide training for all staff (and board)

• Provide tools like talking points

• Talk about the mission alignment of fundraising

Exit Strategies

•Mergers

•Collaborations

•Cohabitation

•Giving Away the Mission

Nonprofit Turn-Around Process

• Face the brutal truths

• Disrupt

• Fiscal management (cost cutting, etc.)

• Evaluate business lines with attention to the “dual bottom line” (Mission & Money) of Nonprofits

• Benchmark Against Similar Nonprofits

• Take Care of “Dual Customers” – Client & Donor

• Donor Stewardship

• Create a Development Plan

• Restore Confidence

• Develop a Culture of Philanthropy

Success

Has written many Development

plans in her nearly 20 years of

fundraising experience.

Master Trainer for the Association of

Fundraising Professionals

Has been a Certified Fundraising

Executive since 2007

Has served on the marketing

faculties of both the Georgia Center

for Nonprofits and Anderson

University’s School of Business (SC)

as well as the Political Science

faculty at Virginia Tech

Rebecca works as the Chief

Development Officer for the Girl

Scouts of Historic Georgia –

rdavis@gshg.org

Questions?

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