The Journey Is On
It is that time of year again when we find ourselves reflecting upon the past and setting goals for the future. For nonprofit leaders, each new year also brings with it the opportunity to asses where their organizations are today and what needs to be done to achieve long-term sustainability. This can often mean reinventing their organization and taking advantage of opportunities that will propel them in to the future.
We recognize the significant effort it took for leadership to guide their organizations throughout 2021, a year full of challenges and difficult decisions. We also recognize that challenges such as the workforce crisis and fluctuations in revenues, will follow us in to 2022.
While you cannot control many of the factors that will challenge your organization in the year ahead, what you can do is to adapt and evolve by reinventing the way you deliver service, add value, and build sustainability.
With 2022 just around the corner, we suggest focusing on the following 3 things when rethinking and reinventing your nonprofit’s business model: Service & Value Delivery, Capabilities & Capacity, and Revenue & Cost Structure.
Service & Value Delivery: How does your nonprofit deliver its value and services and how must that evolve for the future?
The primary reason an organization remains in existence, is its ability to deliver value to a target audience that is willing to pay for the services being offered.
What value does the service you are delivering provide? Can that value be delivered differently or more effectively? Does the target audience require an expanded value proposition to meet where they are at in 2022?
Recent advancements in technology are reshaping the way and manner in which organizations can deliver value. While In some cases it has expanded upon service delivery, in others it has changed it entirely. Devoting the time to reflect upon and fully understand the core of your organization’s value is necessary in order to ensure it aligns with the needs and capabilities of the future.
Capabilities & Capacity: What are the capabilities needed for the future and how should that inform your nonprofit HR strategy?
The way in which service and value delivery evolves during the years ahead will most likely lead to the need for new or expanded types of capabilities.
Is your organization experiencing an increased need for technology supports, data analytics, program design, operational management, or higher levels of strategic perspective to scale?
Some leaders are considering nonprofit partnerships, mergers, and affiliations (M&A) as a way to fulfill gaps in capabilities or expand their resources to procure new levels of talent. This strategy allows organizations to scale and take advantage of several strategic opportunities such as: access to new services, an expanded geographic reach, acquiring new talent, improving technological capabilities, and cost savings or the ability to allocate resources towards new areas of investment.
Do M&A opportunities align to your growth ambitions? Does your sustainability require strategic partnerships? What value do you provide and what value do you need? The answer to these questions can often lead to a clearer understanding of the options available to address the workforce, technology, and fiscal issues that lay ahead.
Revenue & Cost Structure: Is your nonprofit revenue model sustainable and diversified, and does it take advantage of new opportunities for the future?
Service delivery and expanded capabilities and capacity must be financially viable in order to sustain an organization. This means that revenue sources, whether it be an individual consumer, corporate, or government, must be willing to procure your new or expanded methods of service delivery.
Beyond your current clientele, who may have interest in procuring your services? Can you manage costs differently with expanded technological capabilities or a shift in talent strategy? Are there revenue streams that can be added or grown? Which revenue streams are in decline? How can costs and efficiencies be managed more effectively? Does a merger or affiliation improve your financial sustainability? A sustainable and diversified revenue model will enable organizations to continue to deliver value or grow while protecting itself from having too few revenue streams which can increase risk exposure and dependence.
No matter what type of disruption or change may manifest in 2022, it is important to act intentionally when shaping your nonprofit strategy when finding new or expanded ways of delivering value and following that with the talent and financial model that will ensure success and sustainability.