Strategic Thinking About Local
Sources



Ken Phillips, Organization Futures
CFP Workshop in Kiev
May 2004
Trust
Governance
Finance
20.05.04
Management
Fundraising
Program
© Organization Futures LLC 2004
1
Trends for Organizations
1. Geopolitical focus moves south and east.
2. Reductions in foreign and government funding
3. Increased role and importance of the civil society /
organization sector
4. Increased competition for funds
5. Rising expectations about results
6. Donors and participants press closer to NGOs
7. Growing competence in strategic planning, capacity
building, fundraising, public relations, branding,
community involvement, and board development
20.05.04
© Organization Futures LLC 2004
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Organization Development Stage 1
Good program following donor initiatives
1. The donor determines the mission, sets the budget, and issues an
RFP
2. Your organization writes good proposals in response to the
donor’s plan and RFPs
3. The donor does the strategic thinking and set the goals for you
4. You carry out the donor’s intentions if you get the grant or contract
5. Your board is a program oversight board with a financial
assurance role
6. Your executive director is a program director for the donor
7. You respond to what the donor asks you to do
8. You are a contractor for that donor
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© Organization Futures LLC 2004
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Organization Development
Stage 2
Taking control of your destiny by initiative
1. You determine your mission, plan the budget, and seek donations
for the mission
2. Your organization finds and develops new markets of donors
3. You do the strategic thinking and set the goals for yourself
4. You carry out your organization’s mission
5. Your board is a strategic board with a fundraising role
6. Your executive director is the organization leader and fundraiser
7. You play a strong leadership role and get others to follow you
8. You are more independent with a diversified base of many
different donors
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© Organization Futures LLC 2004
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Strategic Thinking Invents
New Categories –
Not Rearranges Old Ones
Formal planning processes—preserve & depend upon
‘old’ established categories
Extrapolating from the past or copying from others says
‘you are a good student’—not a good leader!
Planning—involves a calculating style of management—
not a committing style
Real ‘strategists’—get their hands dirty digging for ideas
Strategy making is a process that is interwoven with all
that it takes to manage an organization.
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© Organization Futures LLC 2004
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Strategic Management
Strategic
Thinking
Vision
Strategic
Planning
Strategic
Implementation
Strategic
Evaluation
SWOT
Strategies
DONORS Credibility Goals Objectives Activities Indicators RESULTS
Culture
Positioning
Mission
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Results for
Society
Participants
Donors
© Organization Futures LLC 2004
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Peter Drucker
1. What is your business?
2. Who is your customer?
3. What does your customer consider value?
4. Non-customers are as important as customers.
5. The customer never buys what the supplier sells.
6. Management that does not innovate will not last.
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© Organization Futures LLC 2004
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Nonprofits Add Value
Competition produces better results
 Innovation, harder work, lower costs, better services
Organizations add more revenues
 50% government, 25% fees, 25% donations, 25%
volunteers = 125%
They have expertise
 Mission driven, highly motivated, , professional,
specialised, independent boards for control
They provide important extras
 Public education, citizen involvement, advocacy,
volunteers
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© Organization Futures LLC 2004
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Michael Porter on Strategy
Competitive strategy is about being different.
It means deliberately choosing a different set
of activities to deliver a unique mix of value.
A focussed competitor targets the special
needs of a subset of customers and designs
its activities accordingly.
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© Organization Futures LLC 2004
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Build Strategic and
Competitive Advantage
Flows from identifying key resources & competences
Identifies obstacles & options to overcome
Identifies and exploits rivals’ weaknesses
Leads to a unique ‘value added’
Develops key resources & competences
Initiates changes in your sector to your advantage
Captures scarce resources (ideas, people…)
Anticipates and responds to changes

Asks: Why is our performance going as it is? Where will it lead if it
continues? How can we design a new strategy?

20.05.04
London Business School
© Organization Futures LLC 2004
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Competition

Nonprofits like businesses are in competition for funds.
The basic successful service strategies are to compete
by providing
 better quality
 lower cost
 a unique and innovative approach.
Donors – and clients - will need to see a ‘value added’
from the nonprofit’s use of their funds.
Competition for dominating and ameliorating an issue
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© Organization Futures LLC 2004
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What are the obstacles?
Identify four obstacles for BRCS
Write each one on a card
Collect ideas in groups
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© Organization Futures LLC 2004
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What’s going right?
Identify four things going well
Write each one on a card
Collect ideas in groups
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© Organization Futures LLC 2004
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Why Are Organizations Not
Raising More Money?
1.
2.
3.
4.
Unproven Results to Participants
Questions of Trust and Reliability
Weak Value to Donors
Lack of Total Organizational Fundraising
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© Organization Futures LLC 2004
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Lessons about
Fundraising
1. Giving is based on trust, confidence and respect.
2. Fundraisers represent the totality of the nonprofit.
3. Giving occurs because of the value the donor receives
and her total experience.
4. Donors want to know the difference that their individual
gifts actually make.
5. Donors, as well as participants, want to be involved in
planning and evaluation.
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© Organization Futures LLC 2004
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Lessons about Evaluation
1. Results that matter are
 Measured, long-term, sustained impacts.
2. Core management functions are
 Assess stakeholder needs in planning
 Design programs with progress indicators
 Monitor during implementation
 Assess your own organization
 Review ethics and standards
 Learn, document, share and use lessons
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© Organization Futures LLC 2004
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Essentials for Organizations
1. Mission
Value
• How important is it society?
2. Effectiveness
Quality
• How big a result is there?
3. Efficiency
Price
• What is the cost for results?
4. Trustworthiness
Ethics
• How well does it behave?
5. Transparency
Accountability
• How involved are constituents?
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© Organization Futures LLC 2004
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Extend Your Appeal To New
Donors
Know the donors
Base appeal on
 Value
 Results
 Cost
 Involvement
 Trustworthiness
20.05.04
New Donors
D
o
n
o
rs
Current
Donors.
D
o
n
o
rs
New Donors
© Organization Futures LLC 2004
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Know and Meet the
Expectations of Donors
Get to know donors better
All staff fundraise and meet donors
Top executives and board members fundraise
Assure fundraising attractiveness of programs
Use the donor’s language
Excellent and timely reporting
Responsive donor service by all
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© Organization Futures LLC 2004
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Donor’s Needs
Objectives
Strategies
Expectations
Emotions
Biases
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© Organization Futures LLC 2004
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Know and Meet the
Expectations of Donors
Get to know donors better
All staff fundraise and meet donors
Top executives and board members fundraise
Assure fundraising attractiveness of programs
Use the donor’s language
Excellent and timely reporting
Responsive donor service by all
20.05.04
© Organization Futures LLC 2004
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Give Value to Donors
1)
2)
3)
4)
5)
6)
Acknowledge their financial and emotional support
Ask them what they value in their relationship
Involve them (really, virtually, media, other ways)
Give them influence within the organization
Use individualized marketing to respond to them
Provide customized programs to meet their needs
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© Organization Futures LLC 2004
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Why Have Standards?
Shared values and common direction
Public responsibility
Donor trust
Prevention
Improvement
Defense
Everything needs to be verified!
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© Organization Futures LLC 2004
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Crisis of Confidence for
Nonprofits
Program
Fundraising
Ethics
Commitment
20.05.04
Impact on Participants
Impact on Donors
Trustworthiness
Fundraising Effort
© Organization Futures LLC 2004
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Key Elements of Public
Accountability
1.
2.
3.
4.
5.
6.
7.
8.
Transparency and accountability to donors and others
Truthful fundraising appeals
Use of funds according to donor expectations
Sound financial management and accurate reports
Measured program effectiveness
Informed & independent Board, no conflict of interest
Adherence to best practices in all aspects of work
Complete, accurate and timely reports
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© Organization Futures LLC 2004
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Iron Rules of Fundraising (15)
1.
2.
3.
4.
5.
Fundraising is not about money
There are only internal barriers to fundraising
Determine and promote your uniqueness
Compete through innovation, price and quality
Assure basic systems are in place
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© Organization Futures LLC 2004
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Iron Rules of Fundraising
(5-10)
6.
7.
8.
9.
10.
Donors give because of value they receive
Meet the needs and expectations of donors
Develop relationships with donors
Solve their problems, not yours
Learn to love the word “No”
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© Organization Futures LLC 2004
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Fundraising Rules at
Latvian Children’s Fund
Work hard for fundraising
Maintain good contacts with donors
Have concrete projects
Produce good results
Maintain low costs
Account carefully for funds
Send good reports to the donors
20.05.04
© Organization Futures LLC 2004
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Total Organizational
Fundraising©
Six step approach to the core capabilities of an
organization for effective fundraising
1.Fundamental Principles of Fundraising
2.Internal Culture of Fundraising
3.Strategic Planning, Positioning and Fundraising
4.Organizational Ethics and Standards
5.Strategic Evaluation for Learning
6.Involvement and Accountability for Donors
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© Organization Futures LLC 2004
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Capacity Building
It encompasses organisational capabilities to:
1. Assure a well-run and respected institution
2. Plan and improve programs
3. Recruit, manage and reward people
4. Raise financial/volunteer/material resources
5. Understand, reach and motivate others
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© Organization Futures LLC 2004
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Be a well-run and
respected institution
Mission
Strategic positioning
Branding
Values and culture
Governance
Management
Planning
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© Organization Futures LLC 2004
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Plan, implement and
improve programs
Design
Indicators
Involve
Implement
Monitor
Evaluate
Learn
20.05.04
Need
Scope
Long term impact
Consequences
Replicability
Sustainability
Science
© Organization Futures LLC 2004
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Recruit, manage and
reward people
Leading
Managing
Culture
Strengthening
Changing
Learning
20.05.04
Board
Management
Staff
Volunteers
Participants
Lessons
© Organization Futures LLC 2004
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Raise financial, volunteer
and material resources
Culture
Strategic Planning
Training
Implementation
Managing
20.05.04
© Organization Futures LLC 2004
Money
Time
Material
Endorsement
34
Understand, reach and
motivate the others
Collect data constantly to give insight
Get outside yourself to see your organisation
Identify new partners and groups to involve
Develop strategies for mutual involvement
Change to know and meet their needs
Consider non-donors as donors
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© Organization Futures LLC 2004
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How to Take Control of
the Environment
Get out of your self and your own limitations
 Put yourself in other people’s position
Keep your eyes open to observe
 See the body language
Listen to learn
 Hear what is not being said
Develop your antenna
 Understand the intangibles
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© Organization Futures LLC 2004
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New NGO Structure
Resource Participants / Stakeholders
Funding, involvement, decision making, evaluating, control
Board of Directors
Fiduciary/legal, Policymaking, Select staff director
Fundraising
Chief Executive Officer
Planning and Management – Participatory Manner
Influence and Implement board decisions – Results
Final decision maker – Hard Choices
Staff
Program, fundraising, finance, etc
Influence and Implement executive director decisions
Program Participants
Program, involvement, decision making, evaluating, control
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© Organization Futures LLC 2004
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West Broadway
Neighborhood Association
Year
Culture
Planning
Participation
Activities
Influence
Members
Revenues
20.05.04
1992
negative
ad hoc
limited
complaining
little
25
$3,000
1993
positive
3 year strategic plan
open / extensive
many / results focus
significant
200
$200,000
© Organization Futures LLC 2004
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Life Cycle of an Organization
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© Organization Futures LLC 2004
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Why Is Evaluation a
Problem?
1.
2.
3.
4.
5.
6.
7.
8.
9.
Everyone is afraid of evaluation.
Evaluation costs money.
Evaluation is often very difficult.
There are new and confusing disciplines.
People confuse different approaches in evaluation.
The approach to evaluation is not well planned.
The results of evaluation are not well used.
Nonprofits lack a culture of learning.
You can lose your job from a bad evaluation.
20.05.04
© Organization Futures LLC 2004
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Significance of
Strategic Evaluation
Significance of Evaluation for Capacity Building
mission  programs  strategic evaluation 
learning  capacity building 
better achieved mission  better fundraising
Significance of Evaluation for Grants
grant  design  indicators  implementation 
M & E  evaluation  donor satisfaction
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© Organization Futures LLC 2004
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Management Role in Strategic
Evaluation
1.
2.
3.
4.
5.
6.
7.
8.
9.
Create a culture of openness and learning
Open diverse feedback channels
Assure clarity of purpose of all evaluations
Require lessons learned summary in all reports
Review a consolidation of lessons learned
Incorporate lessons learned in all new planning
Create internal and external learning groups
Conduct program audits like financial audits
Promote contributors to and users of lessons
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© Organization Futures LLC 2004
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Board Role in
Strategic Evaluation
1.
2.
3.
4.
5.
6.
7.
Set evaluation and learning as a board priority
Clarify a policy for evaluation and learning
Require evaluation measurements in all plans
Provide adequate annual funding for evaluation
Include evaluation in the executive director’s review
Walk around on your own and talk to beneficiaries
Take time to reflect at a Lessons Applied Retreat
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© Organization Futures LLC 2004
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Fundraiser Role in
Strategic Evaluation
1.
2.
3.
4.
5.
6.
7.
8.
9.
Bring donors’ perspectives to all discussions
Press for accountability and transparency
Develop a code of ethics for your organization
Research what donors like and don’t like
Plan strategically with stakeholder analysis
Determine value added and strategic positioning
Help shape organizational purpose and program
Demand evaluations with lessons learned
Advocate organizational fundraising culture
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© Organization Futures LLC 2004
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Results
Donors
Money
Organization
Beneficiaries
Value added
Life Changes
Activities
Inputs
Processes
Outputs
Outcomes
Results
indicators
Source: USAID
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© Organization Futures LLC 2004
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The Actors
Staff
Board
Fundraising
Managers
Finance / Administration
$
Program Results
20.05.04
CEO
© Organization Futures LLC 2004
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Learning to Change
Depends on Evaluation
 Information
Understanding
 Motivation
 Plans
 Commitments
 Actions
 Changes
 Follow up

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© Organization Futures LLC 2004
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Important
and Not Urgent
Urgent
and Important
Crises
Pressing problems
Deadline driven projects
Meetings, preparations
II
Preparation
Prevention
Values clarification
Planning
Relationship building
III
IV
Interruptions, some phone
calls, mail, reports, meetings
Many proximate pressing
matters
Many popular activities
Trivia
Busy work
Phone calls
Time wasters
Escape activities
I
Not Urgent
Not important
20.05.04
Not Important
But Urgent
© Organization Futures LLC 2004
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Five Steps to Getting
Unstuck
1.
2.
3.
4.
5.
Break out of inertia – do something today.
Bring in a third-party “enforcer” – a friend or
executive coach – to keep you moving.
Don’t worry about rejection; just realize you’ll get
plenty of it.
Seek criticism from people with no stake in your
job.
Try “storylining” or similar exercise to uncover the
activities and surroundings that motivate you.
Adapted from Fortune, August 19 1998
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© Organization Futures LLC 2004
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Evaluate Your Week
Which goals did I achieve?
What empowered me to accomplish these goals?
What challenges did I encounter?
How did I overcome them?
Was achieving these goals the best use of my time?
Did my focus on these goals blind me to others?
 Which goals did I not achieve?
What kept me from accomplishing these goals?
What unmet goals should be carried forward?
How much of my time was spent in Quadrants II & I?
What can I learn from the week as a whole
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© Organization Futures LLC 2004
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Peter Senge: Learning is a
journey.
1.
2.
3.
4.
5.
Personal Mastery – Seeing reality as it really is
Shared Vision – Aiming high, compelling dream,
energetic harmony, exhilarating motivation
Mental Models – Removing internal restrictions
Team Learning – Synergy from the group, dialogue not
discussion, accessing each other, using a facilitator,
innovative approaches
Systems Thinking – The whole picture
The Fifth Discipline: The Art and Practice of The Learning Organization (1994)
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Learning Systems
Individual Learning
 Personal motivation and performance
 Personal assessment and change
Knowledge Management
 New knowledge, tools, strategies and policies
 Mechanisms to capture, share and use knowledge
Learning Organization
 Focus on Individual and team thinking processes
 Moving from data to knowledge to wisdom
 Transformation from new knowledge
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© Organization Futures LLC 2004
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Pick the BIG issues
Work on them RIGHT
Issue
Approach
Small
BIG
Wrong
no gain
disaster
RIGHT
little gain
YES!
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© Organization Futures LLC 2004
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Interviews as Assessment
Interviews with
 Staff involved
 Board members
 Interested outsiders
Ask the same 10 basic questions (image,
effectiveness, barriers, opportunities, etc.)
Confidential basis
Report as basis of plans and recommendations
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© Organization Futures LLC 2004
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Benchmarking
Track how your top 3-5 competitors work
 Program activities and results
 Overhead costs
 Fundraising growth
 Fundraising methods
Get data from their public reports
Become a donor to see how they treat you
Track them regularly
Identify what they do well and how they do it
Use the information to set your own improvements
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© Organization Futures LLC 2004
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Leadership
Showing vision
Getting commitment
Delegating
Communicating
Fostering change
Supporting others
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© Organization Futures LLC 2004
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Leadership Potential
Key among leadership capacities are the
ability to
 Develop self-awareness
 Increase self-confidence
 Take a broad, systemic view
 Think creatively
 Learn from experience

20.05.04
Center for Creative Leadership
© Organization Futures LLC 2004
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What Do Leaders
Really Do?
Leaders deal with change
 Prepare organizations for change
 Drive the change
 Help people in the organization cope, struggle
through it, and prepare for the next phase…of
change.
 The more the change, the more you need strong
leadership
Promote planned instability
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© Organization Futures LLC 2004
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Change
Change is taking place whether we like it or
not. The only choice we have is to actively
shape it or to passively endure it.
If we choose to be passive, the future will
punish us.

20.05.04
Alex Krauer, Chairman, Novartis
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What Do Managers Really
Do?
Mangers deal with getting things done
 Cope with complexity
 Bring order and consistency to key functions
 Strategic planning for growth and quality
 Systems to support people & processes
 Program development and implementation
Promote planned stability
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The How Is Different
Leadership
Setting a direction
Creating future vision
Defining strategies to
achieve vision
Aligning people & vision
Motivating/inspiring
Keeping people moving in
the right direction despite
obstacles
Appealing to human
needs, values, emotions
20.05.04
Management
Planning/budgeting
Setting targets/goals
Establishing detailed
steps
Allocating resources
Creating structures
Organizing/staffing
Informing
Delegating
Monitoring
Controlling
© Organization Futures LLC 2004
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In Pursuit of Excellence
Bias toward action
Close to the customer
Entrepreneurship
Tolerance of failure
Quick feedback

20.05.04
Tom Peters
© Organization Futures LLC 2004
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Basics of Team Work
Communicate
Co-ordinate
Share
Be open and ready to adapt new skills
Strengthen capacities and structures
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© Organization Futures LLC 2004
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Effective Communications
Share important information rapidly
Don’t be a bottleneck
Be open and transparent and caring
Give and take feedback constructively
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© Organization Futures LLC 2004
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The Importance of Boards
Governance
Accountability
Representation
Programme Effectiveness
Financial Efficiency
Adequate Resources
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How to Manage Your
Board
1.
2.
3.
4.
5.
6.
Educate Your Board about Its Responsibilities
Give Your Board Real Work
Set Policies and Practices for Board Work
Engage Board Members in Fundraising
Get the Right People on the Board
Change the Board to Achieve the Vision
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Role of the Chair
Assures the Board functions well
Chairs Board meetings
Represents the organisation
Focuses the staff director on key priorities
Leads the evaluation of staff director
Strengthens the Board
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Role of All Board Members
Participate in Board decisions
Provide expertise as needed
Focus on governance, not management
Support the organisation personally
Participate in work of Board committees
Help raise money or make contacts
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Approaches to Board
Development
Make it part of the organisation capacity building
 Strengthen staff, Board, program, finance, etc.
 Code of conduct for Board, staff and volunteers
Define skills and resources needed on the Board
 Self-assessment process and analysis
 Weekend retreat
Create systems for strengthening the Board
 Nominations Committee of the Board
 Limited terms of office (3 year term, maximum 12
years)
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Key Indicators
Executives committed to fundraising
Board committed to fundraising
Organisational fundraising culture
Good systems in place
Programs have impact
Fundraising is managed
Networking is valued
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Good Basic Systems in
Place
Management level
Board level
Financial level
Reporting
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Secretary General
Committed to Fundraising
Significant time allocated
to fundraising (50%)
Personal activities
with top donors
Fundraising high on agendas
Assures fundraising
is successful or else…
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Board Committed to
Fundraising
Contacts and prestige
Budget support
Active fundraising committee
Individual board member
fundraising activity
Fundraising high on agendas
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An Organisational
Fundraising Culture
Fundraising as a priority
Everyone fundraises
Know and meet the
needs of donors
Fundraising in everyone’s
job description …
and evaluation
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Governance
Business, government, international members
Responsibilities of board, officers, committees
Management, programme, fundraising
Ongoing strengthening
Qualifications
 Management/finance experts
 Fundraising/marketing experts
 Programme experts
 Contacts
 Work
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Management
Involving people and sharing information
Changing activities to achieve objectives
Finding ways around barriers
Getting the board to work
Supporting staff
Bias for action
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Fundraising
Understanding current and potential sources
of funding
Getting everyone else involved
Finding new approaches
Moving quickly
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Essential Predictors of RD
Success
The Chair of the Board
 Competent
 Committed
The Chief Executive
 Competent
 Committed
The Fundraising Director
 Competent
 Enthusiastic
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Organization Futures
LLC
Consultancy to help organizations assure their future
 Analytic Studies to determine needs and action
 Consulting in Strategic Planning
 Team, Management and Board Development
 Fundraising and Skills Training Workshops







Ken Phillips, Fundraising and Capacity Building
Rebecca Stiles Phillips, Management and Leadership
Organization Futures LLC
32 Wykeham Road, Washington, CT 06793 USA
Tel +1 860 868 9260
Fax +1 860 868 9261
Email
[email protected]
www.OrganizationFutures.com
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