Strategies for Sustainability June 4-5, 2008 Presenter: Mike Smith Social Entrepreneurs Inc. .

Strategies for Strategies for SustainabilitySustainability

June 4-5, 2008June 4-5, 2008

Presenter: Mike SmithPresenter: Mike SmithSocial Entrepreneurs Inc.Social Entrepreneurs Inc.

www.socialent.comwww.socialent.com

AgendaAgenda

1.1. The Context for Sustainability Planning in The Context for Sustainability Planning in Stanislaus CountyStanislaus County

2.2. Key Elements of SustainabilityKey Elements of Sustainability

3.3. Resource Management: Optimizing Resource Management: Optimizing Resources for SustainabilityResources for Sustainability

4.4. Revenue Enhancement: Diversifying and Revenue Enhancement: Diversifying and Strengthening Long-Term Funding StreamsStrengthening Long-Term Funding Streams

5.5. Non-Financial Elements of SustainabilityNon-Financial Elements of Sustainability

6.6. Sustaining CollaborationsSustaining Collaborations

7.7. Planning for SustainabilityPlanning for Sustainability

How “Sustainability” Is UsedHow “Sustainability” Is Used

Service providers:Service providers: ““Keep my funding at 100%+ of current Keep my funding at 100%+ of current

levels.”levels.” ““Keep my staff in place, avoid layoffs.”Keep my staff in place, avoid layoffs.” ““Keep my current programs going.”Keep my current programs going.”

Funders:Funders: ““Keep the program alive after we cut or Keep the program alive after we cut or

eliminate your funding.”eliminate your funding.” ““Take over roles we are currently serving.” Take over roles we are currently serving.”

(e.g. promoting collaboration, technical (e.g. promoting collaboration, technical assistance, evaluation)assistance, evaluation)

A Preferred DefinitionA Preferred Definition

SUSTAINABILITYSUSTAINABILITY:: The continuation of community The continuation of community

health or quality of life health or quality of life benefits over time.benefits over time.

Center for Civic Partnerships, “Sustainability Toolkit: Center for Civic Partnerships, “Sustainability Toolkit: 10 Steps to Maintaining Your Community 10 Steps to Maintaining Your Community

Improvements”, page 8Improvements”, page 8

Implications of the Implications of the DefinitionDefinition

The focus should be on sustaining The focus should be on sustaining positive change for children and positive change for children and families, not perpetuating specific families, not perpetuating specific programs or rigid service modelsprograms or rigid service models

Sustainability is about much more Sustainability is about much more than money – vision, leadership, than money – vision, leadership, relationships, community relationships, community engagement, public policy and other engagement, public policy and other factors are just as importantfactors are just as important

Key QuestionsKey Questions

Sustainability of what?Sustainability of what?

To achieve what end To achieve what end results? results?

At what level of activity?At what level of activity?

For how long?For how long?

Essential Elements Essential Elements for Sustainabilityfor Sustainability

1. Vision

2. Results Orientation

3. Strategic Financing Orientation

4. Broad-Based Community Support

5. Key Champions

6. Adaptability to Changing Conditions

7. Strong Internal Systems

8. Sustainability Plan

The Finance Project, “Sustaining Community Initiatives: Key Elements for Success”, April 2002

Impact of Organization Type: Impact of Organization Type: Private NonprofitsPrivate Nonprofits

Usually have great flexibility with Usually have great flexibility with respect to organization structure, respect to organization structure, fiscal strategies, staffing, fiscal strategies, staffing, partnerships, etc.partnerships, etc.

Must invest in governance and all Must invest in governance and all types of internal infrastructure; types of internal infrastructure; leads to big variation in quality of leads to big variation in quality of internal infra-structure compared to internal infra-structure compared to public agenciespublic agencies

Sometimes in survival mode; can be Sometimes in survival mode; can be hard to engage in long-term hard to engage in long-term thinkingthinking

Impact of Organization Type: Impact of Organization Type: Public AgenciesPublic Agencies

Subject to policies and funding changes Subject to policies and funding changes at multiple levels of governmentat multiple levels of government

Different funding mechanisms are Different funding mechanisms are availableavailable

Usually able to leverage infrastructure Usually able to leverage infrastructure found within the governmental systemfound within the governmental system

Political will to protect programs and Political will to protect programs and initiatives is criticalinitiatives is critical

Can have less flexibility due to legislated Can have less flexibility due to legislated service “silos” and decision making service “silos” and decision making processesprocesses

Impact of Program/Project Impact of Program/Project Type: Type:

Single AgencySingle Agency Have direct control over decisions and Have direct control over decisions and

actions – often easier to chart a course actions – often easier to chart a course and proceedand proceed

Management and leadership are vital; Management and leadership are vital; must be self-motivated to be proactive must be self-motivated to be proactive about the elements of sustainabilityabout the elements of sustainability

Can tend to think in terms of competition, Can tend to think in terms of competition, not collaborationnot collaboration

May be limited by resources, expertise May be limited by resources, expertise and internal infrastructureand internal infrastructure

Impact of Program/Project Impact of Program/Project Type: Type:

Multi-Agency CoalitionMulti-Agency Coalition Critical success factors are different – Critical success factors are different –

much more emphasis on relationships, much more emphasis on relationships, protocols, trust and other elements than protocols, trust and other elements than for a single agencyfor a single agency

Complexity of everything goes up – Complexity of everything goes up – planning, decision making, planning, decision making, communications, coordinated action, etc.communications, coordinated action, etc.

More options are usually available for More options are usually available for both revenue generation and cost both revenue generation and cost managementmanagement

Often has greater access to resources, Often has greater access to resources, expertise, key champions, general expertise, key champions, general community supportcommunity support

Impact of Economic Cycles:Impact of Economic Cycles:The ObviousThe Obvious

During economic downturns:During economic downturns: Funding is squeezed from all sides: Funding is squeezed from all sides:

government cutbacks occur, private government cutbacks occur, private donations often drop, foundation donations often drop, foundation assets (and grant making) shrinkassets (and grant making) shrink

Demand for services often increasesDemand for services often increases Volunteerism may dropVolunteerism may drop Stress abounds on all frontsStress abounds on all fronts

Impact of Economic Cycles:Impact of Economic Cycles:The Not-So-ObviousThe Not-So-Obvious

Staff turnover often increases – but Staff turnover often increases – but can also be an opportunity to add can also be an opportunity to add new skills and expertisenew skills and expertise

Scarcity mentality can tear at Scarcity mentality can tear at coalitions – but can also be an coalitions – but can also be an opportunity to build or strengthen opportunity to build or strengthen coalitions (“circle the wagons”)coalitions (“circle the wagons”)

Public scrutiny of services can Public scrutiny of services can intensify – can either damage or intensify – can either damage or enhance the reputations of services enhance the reputations of services and agenciesand agencies

Impact of Economic Cycles:Impact of Economic Cycles:The Net EffectThe Net Effect

The eight core elements of The eight core elements of sustainability are the same for all sustainability are the same for all economic cycles, but strategies may economic cycles, but strategies may vary depending on cyclevary depending on cycle

Readiness is key – need to anticipate Readiness is key – need to anticipate both risks and opportunities with both risks and opportunities with economic upswings and downturns, economic upswings and downturns, and be ready to move quicklyand be ready to move quickly

Long-range planning can help smooth Long-range planning can help smooth out the cyclesout the cycles

Inverted Approach to Inverted Approach to FinancingFinancing

Define Resource Requirements

Optimize Cost Structures

Develop and Diversify Revenue Sources

Defining Resource Defining Resource RequirementsRequirements

What resources are truly necessary What resources are truly necessary to produce and sustain results?to produce and sustain results?

In what quantities?In what quantities? Can we clearly justify the resource Can we clearly justify the resource

needs to funders and other needs to funders and other stakeholders?stakeholders?

What resources do we already have What resources do we already have available? What do we need to available? What do we need to obtain or enhance?obtain or enhance?

Cost Management Strategies: Cost Management Strategies: Nine Ways to Optimize CostsNine Ways to Optimize Costs

1. Convert fixed costs to variable costs

2.2. Change policies for expense line itemsChange policies for expense line items

3.3. Change suppliers or ordering patternsChange suppliers or ordering patterns

4.4. Streamline operationsStreamline operations

5.5. Obtain in-kind supportObtain in-kind support

6.6. Collaborate for cost sharingCollaborate for cost sharing

7.7. Outsource (or in-source) Outsource (or in-source) functions/activitiesfunctions/activities

8.8. Re-design the organization or componentsRe-design the organization or components

9.9. Defer or eliminate discretionary costsDefer or eliminate discretionary costs

Convert Fixed Costs to Convert Fixed Costs to Variable CostsVariable Costs

Variable cost = a cost that varies based on Variable cost = a cost that varies based on volume or level of usagevolume or level of usage

ExamplesExamples Staffing: Use contractors on a per-hour basis, Staffing: Use contractors on a per-hour basis,

use temporary staff for fluctuating use temporary staff for fluctuating administrative dutiesadministrative duties

Rent: Downsize/sub-lease space and rent Rent: Downsize/sub-lease space and rent special use space by dayspecial use space by day

Strategy is most appropriate ifStrategy is most appropriate if Amount of resource needed is subject to Amount of resource needed is subject to

moderate fluctuations or usage/need is decliningmoderate fluctuations or usage/need is declining Unused capacity existsUnused capacity exists

Change Policies for ExpenseChange Policies for ExpenseLine ItemsLine Items

Can change policies for individual types of Can change policies for individual types of costcost Employee benefits: Shift to defined Employee benefits: Shift to defined

contribution health plans, change employer contribution health plans, change employer contribution together with adoption of a contribution together with adoption of a cafeteria plancafeteria plan

Phone: Alter phone use or reimbursement Phone: Alter phone use or reimbursement policypolicy

Travel: Change approval or reimbursement Travel: Change approval or reimbursement policypolicy

Can change policies for how expenses are Can change policies for how expenses are incurred, such as purchasing policies for incurred, such as purchasing policies for approval/ordering of itemsapproval/ordering of items

Change Suppliers or Change Suppliers or Ordering PatternsOrdering Patterns

Negotiate price breaks for bulk orders of Negotiate price breaks for bulk orders of high-usage itemshigh-usage items

FrequentlyFrequently seek better bids from other seek better bids from other vendorsvendors

Used effectively for many expenses, Used effectively for many expenses, including:including: SuppliesSupplies

Publications/materialsPublications/materials

Telephone serviceTelephone service

Professional servicesProfessional services

InsuranceInsurance

Streamline OperationsStreamline Operations

Look hard at where staff time is Look hard at where staff time is spent, to:spent, to: Optimize workflowsOptimize workflows Eliminate activities that add little or no Eliminate activities that add little or no

valuevalue Minimize errors and re-workMinimize errors and re-work

Consider subsidized staffingConsider subsidized staffing ““Factor substitution” – is there a Factor substitution” – is there a

lower cost option to accomplish the lower cost option to accomplish the same purpose?same purpose?

Obtain In-Kind SupportObtain In-Kind Support

Look for non-cash contributions that Look for non-cash contributions that reduce costs: supplies, equipment, reduce costs: supplies, equipment, people/time (both volunteers and in-people/time (both volunteers and in-kind services), use of spacekind services), use of space

May be able to use excess business May be able to use excess business inventories in several waysinventories in several ways UseUse Barter (trade)Barter (trade) SellSell

Collaborate for Cost SharingCollaborate for Cost Sharing

Arrange bulk purchases at discounted Arrange bulk purchases at discounted rates on behalf of multiple agenciesrates on behalf of multiple agencies

Jointly contract for services – can work Jointly contract for services – can work for a broad range of services (e.g. fiscal, for a broad range of services (e.g. fiscal, IT, transportation, others)IT, transportation, others)

Share space, equipment or staffShare space, equipment or staff Do Do notnot need to be limited to need to be limited to

collaborating with similar kinds of collaborating with similar kinds of agencies – you can collaborate with agencies – you can collaborate with anyone!anyone!

Outsource (or In-source) Outsource (or In-source) Functions/ActivitiesFunctions/Activities

Contract out low volume or highly Contract out low volume or highly specialized activities; common examples specialized activities; common examples are:are: Specialized child/family assessmentsSpecialized child/family assessments Program evaluationProgram evaluation Information technology (IT) supportInformation technology (IT) support Human resource administration, including Human resource administration, including

employee benefits administrationemployee benefits administration Conversely, if the volume/workload is rising Conversely, if the volume/workload is rising

for activities that are currently contracted for activities that are currently contracted out, assess whether it is now more cost-out, assess whether it is now more cost-effective to bring these activities in-houseeffective to bring these activities in-house

Re-Design the Organization Re-Design the Organization or Componentsor Components

Fundamentally re-think and re-structure Fundamentally re-think and re-structure staff rolesstaff roles

Re-design programs and services, e.g.Re-design programs and services, e.g. Change intensity of servicesChange intensity of services Consolidate programs/servicesConsolidate programs/services When necessary, eliminate programs/ When necessary, eliminate programs/

services that are not sustainableservices that are not sustainable This is the hardest strategy to use but This is the hardest strategy to use but

often has the greatest long-term impactoften has the greatest long-term impact

Defer or EliminateDefer or EliminateDiscretionary CostsDiscretionary Costs

This is the typical “do without” approachThis is the typical “do without” approach

First need to separate discretionary First need to separate discretionary costs, i.e. those expenditures that are not costs, i.e. those expenditures that are not absolutely required, from mandatory absolutely required, from mandatory costscosts

It is often used as the first strategy … It is often used as the first strategy … and in fact should usually be the and in fact should usually be the lastlast option after other strategies have been option after other strategies have been consideredconsidered

Prerequisites forPrerequisites forCost ManagementCost Management

Accurate and timely information about Accurate and timely information about current costs, including cost trendscurrent costs, including cost trends

Ability to link costs to activity and resultsAbility to link costs to activity and results

Understanding and commitment by staffUnderstanding and commitment by staff

Willingness to change past practicesWillingness to change past practices

Ability to re-negotiate line item budgets Ability to re-negotiate line item budgets with funderswith funders

Cost Management Case Cost Management Case StudiesStudies

Sierra Valley Library & Children’s Sierra Valley Library & Children’s Center, Loyolton CA (Sierra County)Center, Loyolton CA (Sierra County) Shared building costsShared building costs Shared maintenance costsShared maintenance costs Co-location of services, offering the Co-location of services, offering the

potential for other cost sharingpotential for other cost sharing Inyo County, CAInyo County, CA

Private preschool operating on a Private preschool operating on a school campus in Lone Pineschool campus in Lone Pine

Cost Management Case Cost Management Case StudiesStudies

Heads Up, Washington D.C.Heads Up, Washington D.C. Access underused school/classroom Access underused school/classroom

spacespace Wage subsidies for various staff Wage subsidies for various staff

positionspositions

Kaleidoscope after-school program Kaleidoscope after-school program in Monongalia County, West Virginiain Monongalia County, West Virginia Public/private partnership where the Public/private partnership where the

school district provides transportation school district provides transportation and administrative support, and and administrative support, and nonprofits provide services for childrennonprofits provide services for children

The First Rule of The First Rule of Revenue EnhancementRevenue Enhancement

There usually aren’t any “silver bullets”!

Dimensions of Revenue Dimensions of Revenue EnhancementEnhancement

1.1. AlignmentAlignment: Fit between agency’s mission : Fit between agency’s mission and revenue strategiesand revenue strategies

2.2. DiversityDiversity: Variety of revenue sources, : Variety of revenue sources, non-dependence on any source or non-dependence on any source or concentrationconcentration

3.3. StabilityStability: Potential to continue and grow : Potential to continue and grow revenues over multiple yearsrevenues over multiple years

4.4. MagnitudeMagnitude: Total dollar potential : Total dollar potential afterafter deducting all costs required to generate the deducting all costs required to generate the incomeincome

5.5. ControlControl: Degree of decision-making and : Degree of decision-making and management influence; flexible use of management influence; flexible use of fundsfunds

TraditionalTraditionalFund Development OptionsFund Development Options

Grants

PublicGiving

GovernmentFunding

ServiceFees

Events

Sources of GrantsSources of Grants

Private foundationsPrivate foundations Local or regionalLocal or regional NationalNational

United WayUnited Way Corporate grantsCorporate grants Government discretionary Government discretionary

grantsgrants FederalFederal StateState

Special Grant OpportunitiesSpecial Grant Opportunities

Rural Community Facilities Grants/LoansRural Community Facilities Grants/Loans Limited to areas under 20,000 populationLimited to areas under 20,000 population Broad use – child care, health care Broad use – child care, health care

facilities, family resource centers, many facilities, family resource centers, many other possibilitiesother possibilities

Rural Health Outreach GrantsRural Health Outreach Grants Grants and loans from financial Grants and loans from financial

institutions under the Community institutions under the Community Reinvestment ActReinvestment Act

Public GivingPublic Giving

Giving by individuals and familiesGiving by individuals and families One-time contributionsOne-time contributions Annual campaignsAnnual campaigns Planned givingPlanned giving MembershipsMemberships

Civic groupsCivic groups Community foundationsCommunity foundations

Donor advised fundsDonor advised funds BusinessesBusinesses

EventsEvents

Special events can raise money Special events can raise money throughthrough Ticket sales, registration feesTicket sales, registration fees

SponsorshipsSponsorships

Event activities, e.g. auctionsEvent activities, e.g. auctions

Sales of goods and services during eventSales of goods and services during event

Other donations from event participantsOther donations from event participants

Most successful when built up over a Most successful when built up over a period of yearsperiod of years

Service FeesService Fees

Fee for service charged to service Fee for service charged to service users, with or without a sliding fee users, with or without a sliding fee scale based on incomescale based on income

Fees based on level of serviceFees based on level of service Example: free home visits for first-born Example: free home visits for first-born

child, fee for additional childrenchild, fee for additional children Service contractsService contracts

BusinessesBusinesses GovernmentGovernment

Government FundingGovernment Funding

Entitlement programs: open-ended Entitlement programs: open-ended appropriations to pay for services to appropriations to pay for services to eligible peopleeligible people Example: MedicaidExample: Medicaid

Formula or block grants: Formula or block grants: appropriations based on formulas that appropriations based on formulas that provide a fixed amount of funds to provide a fixed amount of funds to states or countiesstates or counties Examples: Community Development Examples: Community Development

Block Grant, Child Care Development Block Grant, Child Care Development Block GrantBlock Grant

General revenuesGeneral revenues

Can come from city, county or stateCan come from city, county or state

Special fees/taxesSpecial fees/taxes

State earmarked taxes – e.g. Prop 10, State earmarked taxes – e.g. Prop 10, Prop 63Prop 63

State user fees and special programs – State user fees and special programs – e.g. Children’s Trust Fund, specialty e.g. Children’s Trust Fund, specialty licenseslicenses

Local earmarked taxes and user feesLocal earmarked taxes and user fees

Government Funding Government Funding (cont’d)(cont’d)

Specific Opportunities to Specific Opportunities to Leverage Federal FundsLeverage Federal Funds

Maximize use of existing programs:Maximize use of existing programs: Medi-Cal and Healthy Families Medi-Cal and Healthy Families

reimbursementsreimbursements Coverage for a broad range of medical, dental Coverage for a broad range of medical, dental

and mental health screening and treatment and mental health screening and treatment servicesservices

CHDP exams to draw on federal Early and CHDP exams to draw on federal Early and Periodic Screening, Diagnosis and Periodic Screening, Diagnosis and Treatment (EPSDT) program fundsTreatment (EPSDT) program funds

Women, Infants & Children (WIC)Women, Infants & Children (WIC)Coordination of services is the key – use Coordination of services is the key – use state/ federally funded services where state/ federally funded services where possible and use local dollars to supplementpossible and use local dollars to supplement

Specific Opportunities to Specific Opportunities to Leverage Federal FundsLeverage Federal Funds

Medi-Cal Administrative Activities (MAA)Medi-Cal Administrative Activities (MAA) Federal reimbursement (usually 50%) for Federal reimbursement (usually 50%) for

activities necessary for the Medi-Cal program activities necessary for the Medi-Cal program including outreach, enrollment, transportation, including outreach, enrollment, transportation, and program planning and policy developmentand program planning and policy development

Targeted Case Management (TCM)Targeted Case Management (TCM) Federal reimbursement (about 52%) to assist Federal reimbursement (about 52%) to assist

Medi-Cal recipients with access to necessary Medi-Cal recipients with access to necessary medical, social, educational or other servicesmedical, social, educational or other services

Services eligible for TCM reimbursement include Services eligible for TCM reimbursement include client assessment, service plan development, client assessment, service plan development, linkages and assistance with accessing services, linkages and assistance with accessing services, crisis assistance planning and periodic reviewcrisis assistance planning and periodic review

Specific Opportunities to Specific Opportunities to Leverage Federal FundsLeverage Federal Funds

Title IV-E Foster Care and Adoption Title IV-E Foster Care and Adoption AssistanceAssistance Federal reimbursement (50%) for Federal reimbursement (50%) for

administrative costs related to services to help administrative costs related to services to help prevent placement of young children in foster prevent placement of young children in foster carecare

Eligible activities include referral to services Eligible activities include referral to services (but not providing services), case plan (but not providing services), case plan development, case management, assisting development, case management, assisting with child placement, data collection and with child placement, data collection and reporting, and licensing of foster care homes reporting, and licensing of foster care homes and institutionsand institutions

Used successfully in Alameda and Santa Used successfully in Alameda and Santa Barbara Counties for early mental health and Barbara Counties for early mental health and special needs services; could be used for other special needs services; could be used for other types of servicestypes of services

Issues in Accessing Federal Issues in Accessing Federal Leveraging OpportunitiesLeveraging Opportunities

Must be administered by appropriate county Must be administered by appropriate county department; community-based department; community-based organizations cannot claim on their ownorganizations cannot claim on their own

Must carefully design services, e.g. staff Must carefully design services, e.g. staff reimbursed under MAA cannot also be reimbursed under MAA cannot also be reimbursed under TCMreimbursed under TCM

Extensive preparation, claims management, Extensive preparation, claims management, cost reporting and audit requirements existcost reporting and audit requirements exist

May have cash flow issues; payment could May have cash flow issues; payment could occur over a year after services are occur over a year after services are delivereddelivered

Opportunities to Create Local Opportunities to Create Local Public Revenue StreamsPublic Revenue Streams

Dedicated sales taxDedicated sales tax Aspen, CO (pop: 6,000) – 0.45% sales tax Aspen, CO (pop: 6,000) – 0.45% sales tax

dedicated to child care and affordable housingdedicated to child care and affordable housing Ames, IA (pop: 48,000) - $450,000 a year for Ames, IA (pop: 48,000) - $450,000 a year for

human services through 0.5% sales taxhuman services through 0.5% sales tax Developer feesDeveloper fees

Santa Cruz County + Cities of West Santa Cruz County + Cities of West Sacramento, Concord and San Francisco use to Sacramento, Concord and San Francisco use to fund child carefund child care

Local children’s fund – designated set-aside Local children’s fund – designated set-aside of local property tax dollars or other fundsof local property tax dollars or other funds Oakland, San Francisco, several Florida Oakland, San Francisco, several Florida

counties use this approach successfullycounties use this approach successfully

Other Underused Other Underused OpportunitiesOpportunities

Targeting and tailoring for diverse Targeting and tailoring for diverse groupsgroups

Win/win partnerships with businesses, Win/win partnerships with businesses, public agencies and community groupspublic agencies and community groups

Collaborative fundraisingCollaborative fundraising Engaging clients in fundraisingEngaging clients in fundraising Leveraging large donations, e.g. Leveraging large donations, e.g.

matching campaignsmatching campaigns Service-specific funding resourcesService-specific funding resources

Critical Success Factors Critical Success Factors for Traditional Methodsfor Traditional Methods

Compelling case for supportCompelling case for support Personal contacts and relationshipsPersonal contacts and relationships Outstanding communication skillsOutstanding communication skills Perseverance – building income Perseverance – building income

streams over timestreams over time Flexibility to adapt to new Flexibility to adapt to new

opportunities or changing funder opportunities or changing funder priorities – “re-package” yourself as priorities – “re-package” yourself as necessarynecessary

Case Studies for Traditional Case Studies for Traditional MethodsMethods

MAA and/or TCM claiming being used MAA and/or TCM claiming being used successfully in many counties in successfully in many counties in CaliforniaCalifornia

Truckee/Tahoe Community Foundation Truckee/Tahoe Community Foundation issued over $1.6 million in grants in 2007issued over $1.6 million in grants in 2007

HEART program, Tulare County CAHEART program, Tulare County CA Public/private partnership raised $400,000 in Public/private partnership raised $400,000 in

initial community donationsinitial community donations Then obtained $600,000 state grant with Then obtained $600,000 state grant with

continued local fundraising for 50% matchcontinued local fundraising for 50% match Sustained over 10 years so farSustained over 10 years so far

Case Studies for Traditional Case Studies for Traditional MethodsMethods

Kids After School, Reno County, KSKids After School, Reno County, KS 25% of funding from government 25% of funding from government

sources, evenly split between federal sources, evenly split between federal and local fundsand local funds

8% from income-based service fees8% from income-based service fees 14% from United Way and other grants14% from United Way and other grants 13% from events and local cash 13% from events and local cash

donationsdonations 39% from in-kind support, much from 39% from in-kind support, much from

public/private partnerships with schools public/private partnerships with schools and Parks & Recreation Departmentand Parks & Recreation Department

1% from vending machine profits1% from vending machine profits

EntrepreneurialEntrepreneurialFund Development OptionsFund Development Options

Social Social VenturesVentures

Direct service Direct service social social enterpriseenterprise

Affirmative Affirmative social social enterpriseenterprise

Unrelated Unrelated BusinessBusiness

Active for-profit Active for-profit ventureventure

Passive for-profit Passive for-profit ventureventure

……which can be pursued which can be pursued byby

Expanding an existing Expanding an existing ventureventure

Launching a new ventureLaunching a new venture Acquiring an existing Acquiring an existing

ventureventure Joint venturesJoint ventures

Critical Success Factors Critical Success Factors for Entrepreneurial Methodsfor Entrepreneurial Methods

Leadership and management skillsLeadership and management skills Choice of market opportunityChoice of market opportunity Ability to compete against other Ability to compete against other

companies according to what companies according to what customers value mostcustomers value most

Quality of the business planQuality of the business plan Ability to implement the business planAbility to implement the business plan Flexibility – ability to adapt quickly, Flexibility – ability to adapt quickly,

make prompt decisions, kill failures make prompt decisions, kill failures when neededwhen needed

Cautions and Risks aboutCautions and Risks aboutSocial EnterprisesSocial Enterprises

Ventures directly tied to the organization’s Ventures directly tied to the organization’s main mission are much more likely to main mission are much more likely to succeedsucceed

Innovation (doing something new) does Innovation (doing something new) does not equal entrepreneurship (doing not equal entrepreneurship (doing something that makes money)something that makes money)

Cash flow is critical; must plan for and Cash flow is critical; must plan for and arrange financingarrange financing

Can’t succeed by “tiptoeing” into a Can’t succeed by “tiptoeing” into a venture – be ready to fully compete or venture – be ready to fully compete or don’t play!don’t play!

Social Enterprises: The Bottom Social Enterprises: The Bottom LineLine

Yale study:Yale study: 42% of nonprofits were operating 42% of nonprofits were operating

an earned-income venture (thrift an earned-income venture (thrift stores being the most common) stores being the most common)

1/3 of those reported profits large 1/3 of those reported profits large enough to contribute substantively enough to contribute substantively to their nonprofit missionto their nonprofit mission

Over 1/4 were losing money on Over 1/4 were losing money on their venturetheir venture

Social Enterprise ExamplesSocial Enterprise Examples Redwood Community Action Agency in Redwood Community Action Agency in

Eureka CA: used expertise in home Eureka CA: used expertise in home weatherization to create profitable building weatherization to create profitable building remodel businessremodel business

Esperanza Unida in Milwaukee: fee-based Esperanza Unida in Milwaukee: fee-based training programs, including child care, linked training programs, including child care, linked to for-profit businessesto for-profit businesses

UDAC Mailing trains and employs persons UDAC Mailing trains and employs persons with disabilities to provide direct mailing and with disabilities to provide direct mailing and document shredding servicesdocument shredding services

Many examples of temporary staffing services Many examples of temporary staffing services run by nonprofits that train and employ run by nonprofits that train and employ peoplepeople

Evaluating and Selecting Evaluating and Selecting Revenue Diversification Revenue Diversification

StrategiesStrategies

1. Assess Current Revenue Sources

2. Assess Internal Capabilities - Knowledge, expertise, infrastructure

3. Identify Potential Revenue Opportunities - Research, brainstorm, look at other agencies

Evaluating and Selecting Evaluating and Selecting Revenue Diversification Revenue Diversification

StrategiesStrategies

4. Assess the Opportunities - Net benefit vs. mission fit, risk, expertise, etc.

5. Select Best Options and Plan - Feasibility/business plan, action plan, budget

6. Strengthen Capabilities - Focus on capabilities that lead to more options

Criteria for Evaluating Revenue Criteria for Evaluating Revenue Generating OpportunitiesGenerating Opportunities

1.1. Alignment Alignment with the agency’s missionwith the agency’s mission

2.2. DiversityDiversity of revenue sources of revenue sources

3.3. StabilityStability

4.4. Net revenueNet revenue after deducting costs after deducting costs required to generate the incomerequired to generate the income

5.5. ControlControl over revenues and use of over revenues and use of fundsfunds

Capacity, Politics and Partnerships are other important considerations

Sample Opportunities PlotSample Opportunities Plot

Low HighFIT WITH CURRENT CAPABILITIES

FIT

WIT

H

MIS

SIO

N

Lo

w

Hig

h

Non-Fiscal Dimensions of Non-Fiscal Dimensions of Sustainability: The California Sustainability: The California

Wellness FoundationWellness Foundation

Leadership and governanceLeadership and governance Human resourcesHuman resources Service design and evaluationService design and evaluation Knowledge managementKnowledge management

Niche

Values

Spirit

Capacity

MissionMission Commitment and passionCommitment and passion

Defined core valuesDefined core values Alignment of actions, systems, Alignment of actions, systems,

culture, etc. with the core valuesculture, etc. with the core values

Fit with environment and trendsFit with environment and trends Strategic partnershipsStrategic partnerships Community relations & Community relations &

engagementengagement

1. Vision

2. Results Orientation

3. Strategic Financing Orientation

4. Broad-Based Community Support

5. Key Champions

6. Adaptability to Changing Conditions

7. Strong Internal Systems

8. Sustainability Plan

Non-Fiscal Dimensions of Non-Fiscal Dimensions of Sustainability: The Finance ProjectSustainability: The Finance Project

VisionVision

Clarity is needed about fundamental Clarity is needed about fundamental issues:issues: What is being sustained?What is being sustained?

For how long?For how long?

At what level of activity?At what level of activity?

Vision should be unique or Vision should be unique or differentiated within the communitydifferentiated within the community

For collaborative efforts, all partners For collaborative efforts, all partners must embrace the vision must embrace the vision

Results OrientationResults Orientation

Back to the definition of sustainability: “Back to the definition of sustainability: “The The continuation of community health or quality continuation of community health or quality of life benefits over timeof life benefits over time” – the focus should ” – the focus should be on results for people/communities, not be on results for people/communities, not perpetuation of rigid programs or servicesperpetuation of rigid programs or services

Infrastructure for evaluating results achievedInfrastructure for evaluating results achieved Clear articulation of desired resultsClear articulation of desired results Measures/indicators of resultsMeasures/indicators of results Systems to collect and compile good dataSystems to collect and compile good data

All decision making – budgets, program All decision making – budgets, program design, etc. – is based on maximizing results design, etc. – is based on maximizing results achievedachieved

Key ChampionsKey Champions

Visible champions in the form of business, Visible champions in the form of business, political, media and/or other community political, media and/or other community leaders are valuable for sustainabilityleaders are valuable for sustainability

Proven strategies include:Proven strategies include: Use personal contacts & link to interests of peopleUse personal contacts & link to interests of people Provide multiple specific ways to be involvedProvide multiple specific ways to be involved Ask people to connect with their other contactsAsk people to connect with their other contacts Conduct a public campaign specifically to cultivate Conduct a public campaign specifically to cultivate

key championskey champions Once you get key champions, Once you get key champions, keepkeep them them

through regular communication, feedback & through regular communication, feedback & recognitionrecognition

Key Champions: Case StudyKey Champions: Case Study Sierra Valley Library & Children’s Center, Sierra Valley Library & Children’s Center,

Loyalton CA – lessons learned include:Loyalton CA – lessons learned include: Need a strong vision before anything else Need a strong vision before anything else

happenshappens Start with a few key allies and build from thereStart with a few key allies and build from there Publicize successes – getting a grant was key to Publicize successes – getting a grant was key to

adding a local newspaper editor as a supporteradding a local newspaper editor as a supporter Jump on incorrect information, make sure people Jump on incorrect information, make sure people

have the facts (and have the facts straight)have the facts (and have the facts straight) Constant visibility and promotion is neededConstant visibility and promotion is needed You don’t always know where your support is You don’t always know where your support is

coming from – be open to new supporterscoming from – be open to new supporters Stay committed, don’t get discouragedStay committed, don’t get discouraged

Key Champions: Case StudyKey Champions: Case Study Sierra Valley Library & Children’s Center – Sierra Valley Library & Children’s Center –

lessons specifically on building political lessons specifically on building political supportsupport Be prepared, have solid information and a Be prepared, have solid information and a

clear plan, don’t just rely on emotional clear plan, don’t just rely on emotional appealsappeals

Be honest, tell the same story to everyone, Be honest, tell the same story to everyone, put everything on the table (nothing hidden), put everything on the table (nothing hidden), earn trustearn trust

Don’t accept hearsay – go by what politicians Don’t accept hearsay – go by what politicians say in official public meetingssay in official public meetings

Keep educating people and reinforcing the Keep educating people and reinforcing the facts; people need to hear information many facts; people need to hear information many timestimes

Be open and positiveBe open and positive

Broad-Based Community Broad-Based Community SupportSupport

Sustainability is greatly Sustainability is greatly enhanced when a broad enhanced when a broad range of community members range of community members are are awareaware of the initiative and of the initiative and supportsupport it through: it through:

VolunteerismVolunteerism DonationsDonations AdvocacyAdvocacy Other forms of involvementOther forms of involvement

Creating a Communications Creating a Communications PlanPlan

1. Learn About Community Constituencies

2. Define Target Audiences and Goals

3. Develop Key Messages for Each Audience

4. Define Communication Strategies

5. Create the Strategic Communications Plan

Strategies for Building Broad-Strategies for Building Broad-Based Community SupportBased Community Support

Go to your target audiencesGo to your target audiences Engage the people that are servedEngage the people that are served Work through established groupsWork through established groups Sponsor visible public eventsSponsor visible public events Locate “opinion leaders” and enlist their helpLocate “opinion leaders” and enlist their help Use local media outlets systematicallyUse local media outlets systematically Develop community advocate groupsDevelop community advocate groups Use creative tie-ins with events of other Use creative tie-ins with events of other

groupsgroups Collaborate with others on any/all of the Collaborate with others on any/all of the

aboveabove

Key Champions and Public Key Champions and Public SupportSupport

Discussion questions:Discussion questions:

1.1. What strategies have you found to be What strategies have you found to be most successful in building awareness most successful in building awareness and support for your programs?and support for your programs?

2.2. What challenges have you What challenges have you experienced in building public support experienced in building public support or enlisting champions? How can or enlisting champions? How can these challenges be overcome?these challenges be overcome?

Adaptability to Changing Adaptability to Changing ConditionsConditions

Flexibility is maintained to change strategies, Flexibility is maintained to change strategies, services, systems etc. over time without losing services, systems etc. over time without losing sight of the end results soughtsight of the end results sought

Characteristics that enhance adaptability:Characteristics that enhance adaptability: Proactively monitor and analyze proposed federal, Proactively monitor and analyze proposed federal,

state and local policy changesstate and local policy changes Monitor and react to changes in local conditions Monitor and react to changes in local conditions

(demographics, economics, attitudes, providers, (demographics, economics, attitudes, providers, etc.)etc.)

Engage funding sources in understanding changing Engage funding sources in understanding changing conditions and assessing the effect of changesconditions and assessing the effect of changes

Be willing to make prompt decisions and take Be willing to make prompt decisions and take actionaction

Strong Internal SystemsStrong Internal Systems

Services

Governance

HumanResources

Finance

Management& Operations

PhysicalPlant

Many types of internal infrastructure are needed….

Continuum of Organizational Continuum of Organizational DevelopmentDevelopment

Existence Execution Effectiveness

Does theorganizationhave theattribute?

Does theorganizationdo it or use it?

Does it work?

Sustaining Staffing LevelsSustaining Staffing Levels

Fiscal strategies discussed earlier – on both Fiscal strategies discussed earlier – on both the cost and revenue side – can helpthe cost and revenue side – can help

But … staffing is often NOT a fiscal issue But … staffing is often NOT a fiscal issue

Keys to sustaining staffing levels include:Keys to sustaining staffing levels include: Minimize unwanted staff turnover through Minimize unwanted staff turnover through

good job design, feedback, support, work good job design, feedback, support, work environmentenvironment

Proactively plan for staff changes/successionProactively plan for staff changes/succession

Creative recruiting – cultivate many sources of Creative recruiting – cultivate many sources of candidatescandidates

MISSION, VISION

AND VALUES

Influences

Organization Objectives

Group and

Process Objectives

Capacity

Stakeholder Win/Win

Align- mentExternal

Environment• Trends• Best practices• Policies

Strategy

• Niche• Goals• Strategies

Strategic Framework

• Governance• Org design• Partnerships

Operations Framework

• Function design• Procedures• Facilities

Execution

• Board• Staff• Collaborators

Results

• External and internal• Quantitative• Qualitative

SEI O

rganiz

ati

onal

Model

Value of CollaborationValue of Collaboration

More expertiseMore expertise More opportunitiesMore opportunities

to share or coordinateto share or coordinateresourcesresources

Access to more waysAccess to more waysto generate incometo generate income

More relationships = opportunities for More relationships = opportunities for key champions and public supportkey champions and public support

Better services for the communityBetter services for the community

Levels of “Collaboration”Levels of “Collaboration”

Lower intensity

Higher intensity

Characteristics of Effective Characteristics of Effective Collaborations Collaborations

1.1. Mutual respect, understanding and Mutual respect, understanding and trusttrust

2.2. Open and frequent communicationsOpen and frequent communications

3.3. Representative nature of the groupRepresentative nature of the group

4.4. Clear decision making guidelines Clear decision making guidelines involving all levelsinvolving all levels

5.5. Specific, attainable goalsSpecific, attainable goals

Characteristics of Effective Characteristics of Effective Collaborations Collaborations

6.6. Established formal and informal Established formal and informal communication channelscommunication channels

7.7. Clear roles and policy guidelinesClear roles and policy guidelines

8.8. Members share a stake in both Members share a stake in both process and outcomeprocess and outcome

9.9. Members see collaboration as being Members see collaboration as being in their self-interestin their self-interest

Strategies to Sustain Strategies to Sustain CollaborationsCollaborations

Be inclusive of membership (with Be inclusive of membership (with groups willing to participate)groups willing to participate)

Create a charterCreate a charter

Develop Memorandums of Develop Memorandums of UnderstandingUnderstanding

Establish Establish internalinternal and and externalexternal communication protocolscommunication protocols

Strategies to Sustain Strategies to Sustain CollaborationsCollaborations

Share leadershipShare leadership

Address key elements of sustainability Address key elements of sustainability as a groupas a group

Evaluation plan (tied to Results Orientation)Evaluation plan (tied to Results Orientation)

Public communications plan (to garner key Public communications plan (to garner key champions and broad based community champions and broad based community support for the collaboration)support for the collaboration)

Strategic financing planStrategic financing plan

Why Collaborations FailWhy Collaborations Fail

Loss/lack of leadershipLoss/lack of leadership Unequal involvement or Unequal involvement or

recognition of membersrecognition of members Unrealistic goals or Unrealistic goals or

demandsdemands Turf battles and competitionTurf battles and competition Unwillingness to contribute Unwillingness to contribute

resources or fully participateresources or fully participate Poor or no planningPoor or no planning Bureaucratic structureBureaucratic structure

The Case for Sustainability The Case for Sustainability PlanningPlanning

Getting results for children and families Getting results for children and families while addressing the essential elements of while addressing the essential elements of sustainability is complex, and coordinating sustainability is complex, and coordinating something this complex requires a good something this complex requires a good planplan

Planning is capacity building – it strengthens Planning is capacity building – it strengthens understanding, relationships and focusunderstanding, relationships and focus

Better able to leverage efforts – can conduct Better able to leverage efforts – can conduct short-term actions in ways that promote short-term actions in ways that promote long-term sustainabilitylong-term sustainability

The alternative (not planning) doesn’t work; The alternative (not planning) doesn’t work; too many programs come and go depending too many programs come and go depending on short-term fundingon short-term funding

Who Would You Rather Be?Who Would You Rather Be?

Sustainability Planning Sustainability Planning ProcessProcess

1. Get Organized

2. Set Sustainability Vision and Results

3. Assess Current Situation and Assets

4. Plan for Community Support

5. Plan for Internal Systems and Relationships

6. Create a Strategic Financing Plan

7. Finish Plan + Implementation Plan

1. Get Organized1. Get Organized

Who should be involved? Who should be involved?

How much time can be devoted? How How much time can be devoted? How often and when should the group meet?often and when should the group meet?

Who will facilitate the process? Who will facilitate the process?

Who will document the results of each Who will document the results of each step?step?

Output: Timeline with roles and Output: Timeline with roles and responsibilitiesresponsibilities

2. Set Sustainability 2. Set Sustainability Vision and ResultsVision and Results

Define the vision for sustainability: Define the vision for sustainability: what to sustain, at what scale, for what to sustain, at what scale, for how longhow long

Define the specific results Define the specific results (outcomes) to be achieved and (outcomes) to be achieved and sustainedsustained

Determine service delivery Determine service delivery strategies to create and sustain strategies to create and sustain those resultsthose results

Output: Vision and Desired Results Output: Vision and Desired Results sections of the sustainability plan sections of the sustainability plan

3. Assess Current Situation 3. Assess Current Situation and Assetsand Assets

Complete a simple self-assessment to: Complete a simple self-assessment to:

Identify current strengths and gaps Identify current strengths and gaps in relation to the essential elements in relation to the essential elements for sustainabilityfor sustainability

Inventory assets to leverageInventory assets to leverage

Reflect and learn from past Reflect and learn from past experiencesexperiences

Output: Completed self-assessmentOutput: Completed self-assessment

4. Plan for Community 4. Plan for Community SupportSupport

If a public communications plan If a public communications plan exists, review/update it to address exists, review/update it to address both broad based community both broad based community support and cultivating key support and cultivating key championschampions

If a public communications plan If a public communications plan does not exist, create onedoes not exist, create one

Output: Public communications plan Output: Public communications plan that is fully consistent with the that is fully consistent with the sustainability plansustainability plan

5. Plan for Internal Systems5. Plan for Internal Systemsand Relationships and Relationships

Do an assessment of internal Do an assessment of internal systemssystems

Select capacity building priorities, Select capacity building priorities, define action steps to strengthen define action steps to strengthen those areasthose areas

Evaluate strategic relationships and Evaluate strategic relationships and define strategies to enhance define strategies to enhance relationships that can contribute to relationships that can contribute to sustainabilitysustainability

Output: Elements of the sustainability Output: Elements of the sustainability related to strategic relationships and related to strategic relationships and internal capacity buildinginternal capacity building

6. Create Strategic Financing 6. Create Strategic Financing PlanPlan

Define resource requirementsDefine resource requirements Develop cost management Develop cost management

strategiesstrategies Forecast revenues from current Forecast revenues from current

sources, identify gaps, set sources, identify gaps, set fundraising goalsfundraising goals

Evaluate and select revenue Evaluate and select revenue generation strategies to meet generation strategies to meet fundraising goalsfundraising goals

Prepare long range financial forecastPrepare long range financial forecast

Output: Strategic financing section of Output: Strategic financing section of plan, with long range financial plan, with long range financial forecastforecast

7. Finish the Sustainability Plan 7. Finish the Sustainability Plan & Create an Implementation & Create an Implementation

PlanPlan Review the completed sustainability Review the completed sustainability

plan (built through steps 1-6), reflect plan (built through steps 1-6), reflect on it, amend it as needed, and adopt on it, amend it as needed, and adopt itit

Create a one-year implementation Create a one-year implementation plan or action plan showing specific plan or action plan showing specific action steps, timeframes and action steps, timeframes and responsibilitiesresponsibilitiesOutput: Completed sustainability plan Output: Completed sustainability plan

and related one-year implementation and related one-year implementation planplan

Santa Barbara County: Santa Barbara County: Sustainability Planning LessonsSustainability Planning Lessons Get the right people committedGet the right people committed

For collaborative: must have all partners in the For collaborative: must have all partners in the collaboration on boardcollaboration on board

For single nonprofit agency: must have the Board, For single nonprofit agency: must have the Board, Executive Director and managers (at a minimum)Executive Director and managers (at a minimum)

For public agencies: must have applicable For public agencies: must have applicable department heads and other department heads and other managers/supervisorsmanagers/supervisors

Start at the beginning; don’t assume you can Start at the beginning; don’t assume you can skip early steps like visionskip early steps like vision

Take one step at a time – go fast but be Take one step at a time – go fast but be methodicalmethodical

Santa Barbara County: Santa Barbara County: Sustainability Planning LessonsSustainability Planning Lessons Link sustainability planning to existing Link sustainability planning to existing

work (meetings, projects) whenever work (meetings, projects) whenever possiblepossible

Build your plan as you go through the Build your plan as you go through the steps – put the plan in writing and get steps – put the plan in writing and get people to reactpeople to react

Leverage the power of non-traditional Leverage the power of non-traditional collaborations, e.g. across program/service collaborations, e.g. across program/service areas, where shared objectives or target areas, where shared objectives or target audiences existaudiences exist

ResourcesResources

General resourcesGeneral resources EACH OTHER!EACH OTHER! Nonprofit resource centersNonprofit resource centers InternetInternet AssociationsAssociations Books and publicationsBooks and publications Other resourcesOther resources

Topic-specific resourcesTopic-specific resources

ConclusionConclusion

It IS possible to It IS possible to strategically and strategically and systematically sustain systematically sustain positive results for children positive results for children and families. Doing so and families. Doing so takes diligence, effort, a takes diligence, effort, a willingness to tackle all of willingness to tackle all of the elements of the elements of sustainability (not just sustainability (not just financing), and a financing), and a commitment to learning commitment to learning and adapting. The good and adapting. The good news: there are many news: there are many models and tools to help!models and tools to help!