Nonprofit Performance 360 Magazine Vol 4 No 4

MARK S A SMITH

Seven Nonprofit Business Pillars

W hen you operate your nonprofit as if it’s a for-profit business, you’ll always find more success. Many fail because they miss the basics of operating a business. Nonprofit is a tax status, not a business plan. Business acumen isn’t easy, but it is simple. I’ve identified seven critical business pillars that uphold a sustainable and scalable organization, defining the seven areas of business acumen. When you understand the strategies for each pillar and how to measure success in each area, you can delegate responsibility to direct an organization, small or complex, without having to do everything yourself or, worse, perform poorly in a number of the pillars. Expect problems in your organization when an executive abdicates responsibility for any of these pillars to someone without understanding the key performance indicators (KPIs), without knowing what questions to ask to understand desired outcomes, or lacking the skills to provide strategic direction. Tip: An executive will never agree to a project that they don’t know how to manage. While it’s appropriate and sane to delegate sequence and tactics, the executive must be responsible for setting strategy and managing

KPIs, timelines, and milestones. Consider these seven fundamental aspects of every business. Products that Create Unique Value for the Target Market The product is anything that an organization produces, services they deliver, or environment that they organize. For nonprofits, it’s your mission, whether it’s religious guidance, improving your members’ business, or cultivating your community. Every organization must have a clearly defined market that identifies with them and their offering. Tip: When your offering is for everybody, you’ll find you’re attracting nobody. The key take-away: organizations must target members who identify with what they offer. You do this by aligning with customer values, tuning the offering message directly to them by speaking their language, providing unique value, connecting with them the way that they want to communicate, and delivering their desired outcomes. Members select offerings that reflect their personal identity. Never has this been truer than today, as illustrated by the vast array of goods and services available from many different organizations.

This concept of identity also comes into play for government and education organizations. City and state governments choose business rules - tax incentives, mandates, technology, environment, and outreach - to encourage certain types of citizens and businesses to choose their locations.This is how they define community culture, which is their product.To be a viable nonprofit means understanding your members better than anyone else and delivering what they want. Key performance indicators of success include market penetration, speed of market adoption, level of disruption, maintaining organization revenues over time, etc.Virtually every organization demands a well thought out product development plan, fundamental to pivoting your business model as your membership changes. Ask yourself: On a scale of one to ten, how well does your organization deliver the products and services your members want? Marketing that Triggers Relevant Con- versations Marketing is everything that you do before you have a meaningful prospective member conversation. It takes them on the journey from being unaware to aware, to interested, to asking for a conversation.

32 I Nonprofit Performance Magazine