business planning for non profits

1. Do butterflies
need flying
lessons?
Rod Hyatt
By

2. 1
CONTENTS
Do butterflies need flying lessons? ...............................................................................................................2
Introduction...............................................................................................................................................2
Getting ready for take off..........................................................................................................................2
Flying ........................................................................................................................................................3
Growing ....................................................................................................................................................4
Being on Purpose ......................................................................................................................................4
Summary...................................................................................................................................................4
Bibliography .................................................................................................................................................5
Appendix 1 - Organising Board ................................................................................................................6
Appendix 2 - Swot Analysis Table ...........................................................................................................7
Questions to ask when doing a SWOT Analysis...................................................................................7
Appendix 3 - Dashboard ......................................................................................................................... 10

3. 2
DO BUTTERFLIES NEED FLYING LESSONS?
INTRODUCTION
Nonprofits face many if not more of the challenges that corporates face in carrying on
business every day. In addition, they face unique circumstances because of their reliance
on government, foundation and private donor funding and largely volunteer staffing. In
a startup situation a new nonprofit faces additional challenges in getting their structure
correct; getting their message in front of the correct publics; getting funding and
attracting volunteers and staff who will forward their vision and mission. They are as it
were newly emerged butterflies spreading their wings and getting ready to explore the
world. How do they start? How do they take off? How do they grow? How do they
fulfill their purpose?
GETTING READY FOR TAKE OFF
Before taking off in the wide world of nonprofits, it is wise to have a structure in place
that prospective staff, volunteers and supporters can look at and decide that this is an
organisation that is going somewhere and would be worthwhile being a part of. The first
step would be to answer Drucker’s Questions (Drucker 1990, cited in Anheier 2005,
p.253) Drucker suggests five questions for engagement with key stakeholders:
– What is out mission?
– Who are our customers / clients / members / users?
– What do our customers value?
– What are our results?
– What is our plan?
Having answered these questions we would need to answer a further question: What
management model would be most appropriate to embrace for our nonprofit? Anheier
argues that “the notion of non-profit organisations as multiple organisations and as
complex, internal federations or coalitions requires a multi-faceted, flexible approach,
and not the use of ready-made management models carried over from the business world
or public management. (Anheier, 2000). Gomez and Zimmermann present the
development of management models that are more in tune with the realities of non-profit
organisations. In their discussion organisations are seen as economic and political
systems that have normative, strategic as well as operative dimensions. (Gomez and
Zimmermann 1993, pp. 20-27 cited in Anheier 2000, p.8) From organisational theory we
learn of the close relationship that exists between key characteristics of task

4. 3
environments and organisational structure. For some tasks, a centralised, hierarchical
approach works best for both efficiency and effectiveness, while for other task
environments, an organisational structure made up of decentralised and flexible units
seems best suited (Perrow, 1986).
Having read the above literature that is particular to nonprofit management, I would
argue that Anheier is overly dismissive of “the use of ready-made management models
carried over from the business world or public management.” (Anheier op. cit.) I believe
that there are corporate tools that can be adapted to satisfy Anheier, Gomez and
Zimmermann and Perrow.
I propose to use corporate tools that have proven successful in planting and growing
corporations and community organisations to get board buy-in. Tool 1 is The Organising
Board. This is a resource allocation tool that was first used by Admiral Nimitz to
organise and man up the U.S. Navy during World War II. (Morton, 1989). L. Ron
Hubbard who had served in the navy under Nimitz adapted it to build the Church of
Scientology and from there it migrated into the business world. It has been adapted and
adopted by the corporate world in organisations such as Sony, Chick Corea/Mad Hatter
Studios, Stirling Software, Fitness Choice, Neaumann Engineering, et al.
FLYING
Once the Organising Board is introduced, the nascent nonprofit members are made
aware of how the board functions and shown that until each position under them is filled
they are responsible for them. In other words they are wearing all the hats until they can
find someone to hat in a position.
To properly man up an organising board I propose
that the organisation needs to use Tool 2: a SWOT
Analysis. SWOT is an acronym for Strengths,
Weaknesses, Opportunities and Threats. The goal
is to examine internal (Strengths & Weaknesses)
and external (Opportunities and Threats) elements
of an entity. If there are different divisions or parts
of the non-profit providing services, the SWOT
Analysis can be defined more or less narrowly, as
necessary.

5. 4
GROWING
As the organisation slowly takes off and grows, it needs to stop regularly and take stock
of its situation to see if it is heading in the right direction, is it flying on course?; is it
landing long enough to make a difference? Once again a SWOT Analysis is useful.
BEING ON PURPOSE
A critical skill in developing and delivering on good strategy is setting measurable
targets to gauge successful execution. This is where a third tool comes into play; the
Dashboard. Each division of the organisation has various Valuable Final Products that it
can count to know whether it is on target or needs flight correction or even retraining.
These figures are entered daily or weekly into a statistical measuring database that plots
the trends of production so the division managers can apply the correct condition
according to whether the statistics are trending up or down or level. Statistics on their
own are not the be all and end all. They need to be coupled with Key Performance
Indicators. This way people can be held accountable for mutually agreed targets. The
adage “what gets measured gets done” has considerable truth to it. Heyman holds out
that Organisational Dashboards are an incredibly effective tool for monitoring progress
against established metrics. They are an holistic, though not comprehensive, visual
representation of a nonprofit’s key success indicators in a variety of important
management departments, i.e., program, finance, development and fundraising, human
resources, and governance. Three to five indicators are chosen in each department along
with what results constitute - Green (Celebrate), Yellow (Monitor), and Red (Act Now)
flags. (Heyman, 2011)
SUMMARY
Our butterflies need to learn to fly. I propose in the next installment to explore further
the ramifications of using these tools to solve the dilemma I am currently facing with my
own nonprofit organisation, where we have started off; recruited board members and
have proposed projects that need money, manpower and materials; but feel like we are
“flapping our wings” on the tarmac.

6. 5
BIBLIOGRAPHY
Anheier, H. K., 2000. Managing non-profit organisations Towards a new approach. London: Centre for
Civil Society.
Anheier, H. K., 2005. Nonprofit Organizations: Theory, Management, Policy. s.l.:Routledge.
Berman, R., 2011. Questions to ask during a non-profit swot. [Online]
Available at: http://www.rob-berman.com/questions-to-ask-during-a-non-profit-swot/
[Accessed 20 March 2014].
Gomez, P. and Zimmermann T., 1993. Unternehmensorganisation: Profile, Dynamik, Methodik.
s.l.:Campus Verlag.
Heyman, D. R., 2011. Nonprofit Management 101. San Francisco: Jossey-Bass.
Morton, L., 1989. United States Army in World War II - The War in the Pacific, Vol.2. - Strategy and
Command: The First Two Years. 5 ed. Fort Lesley J. McNair, DC 20319: US Army Center of Military
History.
Perrow, C., 1986. Complex Organizations: A Critical Essay. New York: Random House.

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APPENDIX 1 - ORGANISING BOARD

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APPENDIX 2 - SWOT ANALYSIS TABLE
QUESTIONS TO ASK WHEN DOING A SWOT ANALYSIS
STRENGTHS:
1) Do we have a deep, experienced, engaged Board of Directors?
2) What are our assets?
3) Which asset is strongest?
4) What differentiates us from others that provide similar services?
5) Do we have immensely talented people on our staff?
6) Are we debt free or have a debt structure that is manageable from cash flow?
7) What unique resources do we have?
8) Do we have specific expertise that others do not have?
9) What unique funding sources do we have?
10) Is our senior management team backed by a strong board?

9. 8
WEAKNESSES:
1) What areas do we need to improve on?
2) What necessary expertise/manpower do we currently lack?
3) In what areas do other non-profits have an edge?
4) Are we relying on one funding source too much?
5) Do we have adequate cash flow to sustain ourselves?
6) Are we balancing our budget and putting away for a rainy day?
7) Do we have a well of new ideas?
8) Are we over leveraged (too much debt)?
9) Is our mission overly broad?
10) Are our financials audited and monitored beyond the COO and CFO?
OPPORTUNITIES:
1) What external changes present interesting opportunities?
2) What trends might impact our services?
3) Is another non-profit providing services in an adjacent space that we can team up with
to increase our size and stability?
5) Is there an unmet need/want that we can fulfill?
6) Are there trends emerging that we can profitably service?
7) Can we convert from single year to multi-year funding?
8) Can we take advantage of any new government initiatives?
9) Can we geographically expand our footprint?
10) Can we identify new funding sources?

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THREATS:
1) What if our top funders don’t continue funding in the future?
2) Is there an entity that may move into our space and offer the same or similar services?
3) Are our key staff satisfied in their work? Could they be poached by another non-profit
or for profit organisation?
4) What if we are sued?
5) Do we have to rely on third parties for critical steps in our process that could possibly
derail our delivery schedule?
6) What if our website is hacked?
7) What if there is a natural disaster?
8) What if the government regulations applying to us change?
9) What if we have a client turn rogue on us?
10) What if the media turn sour on us?

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APPENDIX 3 - DASHBOARD