Menu
Home
Log in / Register
 
Home arrow Business & Finance arrow Financial Sustainability for Nonprofit Organizations

ACTION PLAN

An action plan is a document that outlines strategic initiatives and concrete actions that must be taken to materialize the initiatives. The strategic initiatives are usually formulated using the format of key themes or topics or initiatives linked to the achievement of strategic objectives. The actions are concrete tasks that must be performed within a specific timeline. The implementation of the actions gives concrete form to the key initiatives. For example, if a strategic initiative is to "strengthen the long-term fiscal position of an organization," some of the actions in relation to such an initiative might be to (a) review the fiscal policies of the organization and develop new directions, principles, priorities, and tools to address fiscal issues in an expedited manner; (b) develop more targeted and accurate fiscal projections that underlie the budget; (c) make long-term investments that are fully guaranteed; and (d) develop a financial-risk policy for asset and liabilities management. The action should be based on a thematic design, which includes activities and strategies related to organizational sustainability, strategic partnership, fund-raising, social enterprise, and investment portfolio (Figure 11.3).

Strategy and Action Plan: Organizational Sustainability

Organizational sustainability is as important as financial sustainability. In fact, an organization cannot be financial sustainable without being a sustainable entity in itself. Therefore,

Financial sustainability action plan design.

FIGURE 11.3 Financial sustainability action plan design.

the action plan should include strategic initiatives and actions related to organizational sustainability, such as:

- Refining vision and mission statements

- Refining strategic goals and objectives

- Strengthening governance and accountability systems

- Developing staff and talent

Documenting and disseminating outcomes and impacts of programs, services, and activities.

Strategy and Action Plan: Fund-raising Plan

As indicated in previous chapters, fund-raising is essential to the financial sustainability of a nonprofit organization. Based on the spirit of the law for charitable entities, fund-raising is the primary source of revenue for a nonprofit organization. As a result, a financial sustainability action plan must include strategic initiatives and actions related to fund-raising. Some examples of initiatives and activities might be:

1. Diversification of fund-raising sources of revenue through:

- Membership development

- Strategic donor fund-raising

- Bequests

- Charitable remainder trust

- Fund-raising events

2. Adoption of a donor management system to

- Create a base of loyal donors who upgrade their donations

- Reach out to new categories of donors through social media platforms

- Organize ongoing hangout events with donors

Strategy and Action Plan: Social Enterprise and Investment Portfolio

Social enterprises and investments represent various options used to raise funds for nonprofit organizations. They require different policies, procedures, and practices. They can also help generate flexible and sustainable income. Therefore, they deserve special considerations in an action for financial sustainability. Key strategies and actions might be:

- Development of fee-based services programs

- Development and implementation of business plans for social enterprises

- Development of marketing plans for activities to generate earned income

- Contracting with an investment manager to handle short-term and long-term investments

Strategy and Action Plan: Strategic Partnerships

The financial sustainability of a nonprofit organization depends partly on its internal strengths, capacity-building priorities, and adaptability to changing conditions. The other part is based on the ability of an organization to build community support and develop strategic partnerships. Consequently, a financial sustainability action plan must include strategic initiatives and actions for strategic partnerships through the development of strategic collaborations or alliances with public agencies, private corporations, other nonprofit organizations, community groups, financial entities, grant-maker agencies, and other similar entities.

Implementation Strategies

The development of a financial sustainability plan is a great statement that an organization is confident of its ability to continue to provide quality services to clients regardless of changes in funding sources or economic or financial crises. However, the implementation of the plan is as critical as the plan itself. The implementation of a financial sustainability plan requires an organization to make more concrete decisions, such as:

- Development of a detailed budget for each activity in the financial sustainability plan Development and funding of a main budget that incorporates all the project-specific budgets

Development and implementation of a comprehensive financial sustainability management system

- Develop and implementation of a monitoring and evaluation system

The implementation plan must include a timeline that connects strategic goals, objectives, initiatives, actions, benchmarks and outcomes, responsibilities (person responsible), and period (dates). The implementation plan should answer the classic questions: "Who does what?" "When?" "How?" and "Why?"

BENCHMARKING AND OUTCOMES

The financial sustainability plan must describe specific benchmarks and outcomes that will be used to monitor progress. Benchmarking is the process of measuring various dimensions of quality, efficiency, and effectiveness about an organization in order to compare performances with similar organizations. An outcome is a concrete result obtained from the achievement of a goal or an objective. A goal or an objective express an intention to achieve a result in the future, after certain actions have taken place. The result obtained if the goal or objective is achieved is called an outcome. Benchmarking is an ongoing process that can help ensure that specific financial sustainability outcomes are obtained.

CONTINUING QUALITY IMPROVEMENT

As indicated in a Chapter 2, sustainability is more of a process than an end in itself, given the nature of a nonprofit organization to prioritize the fulfillment of its vision and mission over anything else. Consequently, a financial sustainability plan for a nonprofit organization cannot be a static document. It has to be a plan available for constant revision, especially when forecasting and the internal and external environments of the organization change. Therefore, there must be ongoing assessment and evaluation of the plan and revision strategies for continuing quality improvement.

BUDGET

A financial sustainability plan is not a list of ideas and activities. It is a systematic plan based on sound fact-based analyses. As a result, it requires expenses that must be justified in a budget. A budget developed within the framework of a financial sustainability plan is essential for an organization to follow a path toward financial sustainability.

 
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
 
Subjects
Accounting
Business & Finance
Communication
Computer Science
Economics
Education
Engineering
Environment
Geography
Health
History
Language & Literature
Law
Management
Marketing
Mathematics
Political science
Philosophy
Psychology
Religion
Sociology
Travel