Planning with purpose to thrive financially

This week, I'm continuing with the assessment of The Patterson Foundation’s (TPF) Collaborative Restructuring Initiative (CRI). Last week, I explored the impact of communications - more specifically, blogging.

This week, we're looking at planning to thrive financially and its three components:

- Current and endowed philanthropy

- Appropriate business models

- Opportunities for venture investments

The Collaborative Restructuring Initiative is in the appropriate business model space.

Why?

Because  nonprofit is a tax status, not a business plan. To have an effective and efficient nonprofit sector, it is important to shift the thinking to create new paradigms.

What's the difference between financial sustainability and thrivability? The Patterson Foundation President and CEO Debra Jacobs wrote a brief blog on that last week - check it out.

Most readers are very familiar with the adjective "sustainable" -- now common in conversations  about community growth and development. On the other hand, the verb thrive means to grow vigorously or flourish.  TPF uses financial thrivability as a focus for growth for nonprofits who are interested in creating new paradigms though a robust business model.

What would that look like?

Shared services, shared space, change in locus or some combination of those.

In order to thrive, 1+1 must equal five.

Here’s a current example:

TPF is working with a group of organizations interested in sharing services.  In a recent workshop, one of the participants proudly acknowledged that his programs—and those of his colleagues in the room—were top drawer, the best of the best.  Everyone agreed. He went on to say that he desired top drawer back office services. Everyone agreed again. The focus of nonprofits is implementation and execution of their mission, which means delivering services or programs. So, it’s really not a surprise to learn that back office isn’t their strength. It’s not supposed to be.

How do these organizations make 1+1=5?  TPF doesn’t have the answers, but can bring resources to the table when partners are ready to learn. We are on a journey to learn and today we are at 1+1=2.3.

TPF explored the feasibility for back office consolidation and through this process, a number of paths emerged. Before I talk about the paths, it will be helpful for me to set the stage by sharing the importance of how the paths emerged.

This group is group is diverse: they do not have similar missions and haven’t had a history of collaboration. But they do have a certain level of trust and respect for one another. In the beginning, there was very little interest in or identification of areas to collaborate. Enter Vance Yoshida of La Piana Consulting, a skilled and experienced facilitator. By the end of a half-day workshop, the energy and excitement around ‘what could be’ was noticeable.

• Two organizations who sat through the first half of the meeting with their arms crossed (read: closed minds) found out they both need to purchase electronic medical records systems. At this announcement, a third hand went up. And the conversation immediately went to ‘who else needs electronic medical records that we need to bring into the conversation?’

• A brave CEO from one organization raised her hand to say she could use human resources expertise. The silence broke and three hands shot up. A spirited conversation ensued about complex HR challenges in the nonprofit world and what a wonderful thing it would be if they could access high quality advice, a luxury they cannot afford.

• The discussion about Professional Employment Organizations (PEOs) unfolded.  Nonprofits aren’t familiar with a business model commonly used in the private sector.  Are PEO’s the answer? We don’t know, but the group wants to know more.

• Who else needs to be included in the conversations? There were great suggestions about convening subgroups who share similar missions and everyone said they would come up with lists.

Will we get to 1+1=5?  Stay tuned.

What suggestions do you have for the group?