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Wednesday, August 3, 2010

Strategic Planning with the Environmental Snapshot

By Shawn Sheridan, Consultant, Dewey & Kaye

Today, the nonprofit sector is challenged by the "new normal": instability of the economy, state and federal funding retrenchment, and less disposable contributor spending. Given these circumstances, nonprofit organizations have a compelling need to create (and adjust) strategic plans that effectively link mission to outcomes in order to weather the economic turmoil and shifts within the sector. In addition, given the financial constraints of many organizations, these plans must be completed in as cost-effective manner as possible. And above all, to provide real value to the organization, the plans should be based upon an accurate, data-informed picture of the organization's operating environment.

To address this need, Dewey & Kaye and Three Rivers Connect (3rc) have collaboratively developed the Environmental Snapshot, a tool designed to quickly collect and present the critical information an organization requires to inform its strategic planning process. We believe this tool will greatly enhance the availability, quality, cost-effectiveness and interpretability of information for the purposes of strategic planning in the nonprofit sector. Organizations can use the information gathered through the Environmental Snapshot to guide the remainder of their strategic planning process, regardless of whether it is completed by an internal facilitator or by an external consultant.

The Environmental Snapshot is comprised of three distinct sets of information, each vitally important in informing an organization's vision and overall strategy:

• Stakeholder Survey. This survey is completed online by the organization's key stakeholders, including board members, staff, clients, funders and other community and opinion leaders. The questions included the stakeholder survey can be customized by the organization to collect the most relevant information based on the individuals participating in the survey. The stakeholder survey collects qualitative information to inform the strategic plan in several areas, including:
  • Perceptions of the organization
  • Strengths and weaknesses
  • Opportunities and threats
  • External trends
  • Best practices in the sector
  
  
• Financial Analysis. This component of the Environmental Snapshot creates a picture of the organization's current financial reality based on the analysis and interpretation of five years of audited financial statements. This analysis compares the organization's financial position to other organizations in the same nonprofit subsector (e.g. food bank financials compared to other food banks) and also evaluates the nonprofit's 5-year financial trend based on earlier financial periods. This analysis utilizes 11 financial ratios to assess the organization's financial health in the categories of operations, liquidity, operating yield, revenue, borrowing and assets. The financial analysis answers several questions for the organization, including:
  • Generally, how is the organization managing money with regard to its sector and its mission?
  • Generally, what is the organization's ability to meet obligations as they come due?
  • Are operating yield trends favorable in the organization?
  • Are revenues growing and satisfactory?
  • Is the organization borrowing responsibly?
  • Is the organization using gross fixed assets effectively?


• Geographical Data Visualizations. Having a clear understanding of the communities within which an organization operates is critically important. This piece of the Environmental Snapshot provides the organization with a series of visualizations (or maps) that capture the programmatic, demographic, civic, and social pieces of the communities the organization serves or operates within. This information analysis will help the organization understand and answer several key questions, including:
  • What is the demographic makeup of my communities?
  • What does my client/customer population look like?
  • Are there other like organizations operating within my service area that may be potential partners for collaboration?
  • Where is crime occurring and how does that affect the delivery of my services?

For more information on how the Environmental Snapshot can provide high-quality, cost-effective information to guide your strategic plan, contact Dewey & Kaye at 412.434.1335 or by visiting us on the web at www.deweykaye.com.

Shawn Sheridan specializes in nonprofit business and strategic planning and financial analysis. Shawn can be reached at 412.434.1335 or ssheridan@deweykaye.com.

 

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