by Tom Pate, Marty Martin, and Tony Boor

1. Lead with Strategy; Budget for Goals TONY BOOR MARTY MARTIN TOM PATE

2. If a tree fell in the forest…did it have a strategy? What drives your organization?
2 #bbcon
Something to think about….

3. Context…little group voting!
•Does your budget = your strategy?
•How many of you have a strategic plan…of some kind?
•If you don’t have one, why?
•Didn’t have time…busy getting the mission done!
•or
•Got it drafted…couldn’t get it approved!
•If you have a strategic plan…
1.Does it cross the entire organization?
2.Does it have a strategic intent AND a financial intent?

4. Topics
•Budget vs Strategy
•The Strategy Driven Budget
•The Role of the Board
•Off the Rails…What Happens in the real world
•A Nonprofit Case Study
4 #bbcon

5. Strategy…
•3-5 year view of the organization
•Asks “what/why” or “if” questions
•Where are we?
•Where do we need to go?
•What will it take to get there?
•What stands in the way?
•What resources do we need?
•If we needed to place a bet, where would we place it?
•Board & Staff - Collaborative
•Considers the financial view, but is flexible
Budget…
•Defines the 4-6 quarter view
•Driven from the strategy
•Staff Driven, Board Approved
•Asks “how much”…a LOT
Strategy vs. Budget

6. The CFO View: Strategy vs. Budget
•Budgets are the last phase of a longer strategic journey
•Budgets provide the annual framework to measure financial success and directional movement
•Best Practices –
Build “Top Down” and “Bottoms Up”
Use as an opportunity drive return on investment – don’t spread like peanut butter!
Utilize Strategic Plan, Annual Operating Plan as well as key metrics, benchmarks, ratios and drivers to help develop expectations
Strive for continued efficiency, quality and productivity gains – expect 5+% improvement each year
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7. 7 #bbcon
Fitting Strategy & Budget Together
Mission/Objectives
Environment
Strategy Formulation
Implementation Plan
Evaluation
Annual Operating Plan
Operating Plan By Group
•Quarterly
•Fundraising, Mission, Operations

8. Why this works…
•Creates broad alignment
•Establishes priorities and key objectives
•Clearly focuses the individual departments of an organization
•Ensures that new ideas or initiatives are aligned to the overall strategy
•Establishes a near-term and long-term roadmap to measure success; Routinely assess progress and adjust direction

9. The Role of the Active Board
•Culture
•Compliance
•Control

10. Quick Case Study
Fiscal Year
Revenue
Wishes
FY10
$11.2M
802
FY11
$10.8M
863
FY12
$11.3M
865
Half Full….
•Largest Chapter
•Financially Solid
•Engaged Board, Strong Staff
Half Empty….
•Large Geographic Area
•Fragmented Staff
•Granting <50% of Eligible Wishes
•High Financial Treadmill
Ohio/Kentucky/Indiana

11. Annual Budget Staff Driven
3 Yr Strategy Board Driven
L-YR + 10%
Spread Equally
List of Action Areas
Detailed Annual Budget
3 Yr Strategy
3-5 Strategic “Planks” Individual Giving Hospital Relationships 3 Yr Financial Plan Required Investments Board & Sr Staff Driven
Annual Plan
Annual Goals, Budget YrX Investments Staff Driven, Board Confirmed
Detailed Dept. Budgets Staff Driven
Ex:
Dept Budget
The Strategic Planning Shift

12. Results
•Shared Board & Staff Buy-in – Its “our” plan
•Long Term Mindset
•Clear Goals, Milestones
•Shift in where we invested
•First Investment: Hospital Relationship FTEs
•Second Investment: 2 New Individual Giving Directors
•Third Investment: Central “Donor Mining” Support Team
•Cut lower performing (but long valued) activities/roles to fund new investments

13. Perils and Pitfalls…Your Turn! What works well for you? What would you avoid?

14. When Off the Rails Might Be RIGHT?
Know
Competent & Comfortable
Must learn
Translate to new context
Opportunity?
Don’t Know
Know
Don’t Know
Copyright. All Rights Reserved. Marty Martin. 2014

15. What do you need to know.. Ask our Panel…and your Peers!
Opportunity to Win for sharing your story!

16. “However beautiful the strategy, you should occasionally look at the results.” (Winston Churchill)
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17. Monitoring Results
“School Solutions”:
•Annual Summary
•Quarterly Report Card
•High/Medium/Low Progress
What have you seen work?
Opportunity to Win for sharing your story!

18. Questions

19. Take Action Now
•Rally your team! Strategic planning and budgeting should be an organization wide exercise
•Detail your revenue/contributions and expenses: understand the drivers and trends
•Develop KPIs: Cut through the noise, find a handful of key indicators for the operational and financial health
•A simple strategy is better than no strategy – and tie to your KPIs!

20. 20 #bbcon
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Did this session give you the jolt you needed?