Creating Sustainability The Science and Myths of Building High Performance Non-Profits by E. Ted Fujimoto, President Landmark Consulting Group, Inc.

1. LET YOUR NON-PROFIT GROW Creating Sustainability The Science and Myths of Building High Performance Non-Profits E. Ted Fujimoto, President Landmark Consulting Group, Inc.

2. LET YOUR NON-PROFIT GROW

5. “ Sustainability” LET YOUR NON-PROFIT GROW Earned Revenues Philanthropic Funding Your Mission Your Core Operations

6. “ Sustainability” LET YOUR NON-PROFIT GROW Core Operations Your Mission Opportunities Scaling Risks Philanthropic Funding Earned Revenue

9. “ Five Sustainability Killers” LET YOUR NON-PROFIT GROW

11. LET YOUR NON-PROFIT GROW MYTH – To be a great Association, we must solve as many member needs as possible. To be a great Non-Profit, we must solve as many constituents needs as possible. To be a great CMO, we must solve as many of our school site needs as possible.

12. “ Hedgehog Concept” LET YOUR NON-PROFIT GROW

13. Association LET YOUR NON-PROFIT GROW Advocacy Events Services Products

14. Radical Idea Case Study LET YOUR NON-PROFIT GROW

15. How to LET YOUR NON-PROFIT GROW Core Operations: Membership Products & Services Events Marketing & Sales Finance HR Board State B-Member Council State A-Member Council State B Advocacy State A Advocacy State B – Unique Services/Support State A – Unique Services/Support CEO State B ED State A ED VP/COO State A Association State B Association

16. CMO LET YOUR NON-PROFIT GROW

17. LET YOUR NON-PROFIT GROW MYTH – The association will be a near-automatic first choice by members for solutions . MYTH – The non-profit/CMO will be a near-automatic first choice to receive help for customers/schools.

18. “ Survey Myth” LET YOUR NON-PROFIT GROW

19. “ The Perfect Fit” LET YOUR NON-PROFIT GROW Marketability Significant Value Profitability Do charters perceive a huge need and want to buy a solution? Does the business model support creating short-term and long-term profit? Does the solution save charters significant costs and/or create huge additional value? What we can be deeply passionate about? What we can be the best in the world at? Passion Expertise

22. Product Mix LET YOUR NON-PROFIT GROW Entry Entry Mid-Level/Partial Solutions Mid-Level/Partial Solutions Big Complete Solutions Entry Entry Mid-Level/Partial Solutions Big Complete Solutions Customer Perceived Needs

23. “ Myth of Earned Revenue” LET YOUR NON-PROFIT GROW $1M additional expense to generate $1.4M in earned revenue (71% profit margin) Core Operating Base Line

24. “ Myth of Earned Revenue-CMO” LET YOUR NON-PROFIT GROW Need as much contributions as they did at the beginning or more Number of Schools

25. “ Myth of Earned Revenue” LET YOUR NON-PROFIT GROW MYTH – More earned revenue = less philanthropic funding needed

27. Cash Flow – Generating more cash inflow than outflow LET YOUR NON-PROFIT GROW Biggest enemy of cash flow is TIMING! Q1 $100K Expense Q2 $100K Expense Q1 $0K Revenue Q2 $0K Revenue $ (100K) $ 0 $ 100K $ 200K $ (200K) $ (200K) $ (100K) $ 100K Q3 $100K Expense Q4 $100K Expense Q1 $200K Expense Q2 $300K Expense Q3 $400K Expense Q3 $100K Revenue Q4 $200K Revenue Q1 $400K Revenue Q2 $600K Revenue Q3 $800K Revenue $ (100K) Period $ (100K) Cumulative $ 300K $ 400K $ 400K $ 800K Year 1 Year 2 Planned Launch Profitable Cash Positive

28. Cash Flow – Generating more cash inflow than outflow LET YOUR NON-PROFIT GROW Biggest enemy of cash flow is TIMING! Q1 $100K Expense Q2 $100K Expense Q3 $100K Expense Q4 $100K Expense Q1 $0K Revenue Q2 $0K Revenue $ (100K) $ 0 $ 100K $ 200K $ (200K) $ (200K) $ (300K) $ (100K) Year 1 Year 2 Planned Launch $ 100K $ (100K) $100K Expense $200K Expense $300K Expense $100K Revenue $200K Revenue $400K Revenue $600K Revenue $800K Revenue $ (100K) Period $ (100K) Cumulative $ 300K $ 400K $ 400K $ 800K Profitable Cash Positive

29. Cash Flow – Generating more cash inflow than outflow LET YOUR NON-PROFIT GROW Biggest enemy of cash flow is TIMING! Q1 $100K Expense Q2 $100K Expense Q1 $0K Revenue Q2 $0K Revenue $ (100K) $ (100K) $ 0 $ 50K $ (200K) $ (400K) $ (300K) $ (400K) Year 1 Year 2 Planned Launch $ (350K) $ (100K) $400K Expense Q3 $100K Expense Q4 $100K Expense $100K Expense $200K Expense $300K Expense $100K Revenue $200K Revenue $400K Revenue $600K Revenue $800K Revenue $ (100K) Period $ (100K) Cumulative $ 200K $ 400K $ (150K) $ 800K Profitable

32. LET YOUR NON-PROFIT GROW MYTH – Having smart/experienced people is enough to launch/operate multiple businesses.

33. “ In Action” LET YOUR NON-PROFIT GROW Organization Focus Business Team Business Team Team Business

34. “ Using Small Teams” LET YOUR NON-PROFIT GROW Each Business Team Team Leader (Owner – Accountable – Authority) Team Members – Resource Pool

35. “ No Silos” LET YOUR NON-PROFIT GROW Dependable Specific Deliverables Timelines Quality Levels Business/Team Business/Team Deliberate and Structured Relationships, Cooperation, Collaboration

36. Governance LET YOUR NON-PROFIT GROW Business Business Business Board of Directors Board of Directors Advisory Board Association Association Contracts Internal Staff A B C

37. LET YOUR NON-PROFIT GROW MYTH – Build it and they will come!

38. “ Know your customer” LET YOUR NON-PROFIT GROW

40. LET YOUR NON-PROFIT GROW

41. “ Generate Results” LET YOUR NON-PROFIT GROW 50% qualified lead rate 25-50% close rate

42. “ Five Sustainability Strategies” LET YOUR NON-PROFIT GROW

43. More than Sustainability Increased Capacity, Scale, Growth! LET YOUR NON-PROFIT GROW

44. LET YOUR NON-PROFIT GROW Discussion/Q&A E. Ted Fujimoto, President Landmark Consulting Group, Inc. [email_address] 415-963-4406 www.ConsultLandmark.org

47. LET YOUR NON-PROFIT GROW Thank you!!! E. Ted Fujimoto, President Landmark Consulting Group, Inc. [email_address] 415-963-4406 www.ConsultLandmark.org