In Support of Value Creation

It takes more than a great plan to create the value your donors, community, and clients want.  Change the way your nonprofit:

Talks – Change the way your nonprofit talks about itself.   Monthly, quarterly, and annual financial reporting are necessary but they say nothing about the value your nonprofit creates, even though the value created by your nonprofit is what your clients, donors, and community want to know about.  Operational reports are the same.  The on-time delivery of services to a client or the significant increase in the number of clients served says nothing about the value those clients received from the services, how the services created value for the clients or how the changes in the clients’ lives has created value for the community.  The financial and operational reports are necessary for sound operation but value creation is critical to generating and sustaining support.

Look at the reports that cover each of the elements of your business model and determine how to make them value driven.  Relegate the current reports to the committees and staff departments that need them.

Train your advocates, fundraisers, board members, and others who interact with the public, clients, and supporters to use the key points from the value creation reports as their talking points.

Focuses – When goals and discussions are focused on what happened in the past or will happen in the next few weeks, it tells everyone that the near-term is more important than the long-term.  However, value creation takes a long time.  Therefore, everyone’s focus must be on the long-term rather than what happens next.  What happens next is only a steppingstone.  Focusing on steppingstones causes them to become endpoints.  Looking several years into the future is a cultural change for many nonprofits.

Reports – Anecdotes engage listeners.  Evidence and facts demonstrate value and convince listeners.  Without anecdotes, the facts are lifeless and often meaningless.  Without evidence and facts, the scale, reproducibility, and consistency of the value creation is impossible to grasp.  The donors, other supporters, and community are unable to determine how much value was created and how much generosity is justified without the scale.  When the value creation trend is positive, it is easy to make the case for increased generosity and loyalty.  It is also easier for the supporters to be excited and engaged. The clients, donors, and others need to know about the reproducibility and consistency.  Those data points highlight each client’s potential for success and whether success will be broadly experienced in all segments of the community.

Gathers Support – Givers want value for their money and new supporters want to know their support will create value (a return on investment).  The problems nonprofits solve are messy, time consuming, and require a long-term commitment.  When a nonprofit talks about the immediate return on the supporter’s investment, it takes focus away from the value the support will create.  In conversations with donors, lead with the value your nonprofit creates and the time it takes for the value to be recognized.

Next Step:

Add a culture change to your value creation plan (a culture that focuses on value creation)

Use the preceding four points to guide the development of your culture change plan

Ensure that the mission and client success are the cornerstones of your culture change plan

Measure success by the engagement your value creation plan fosters

Changing a nonprofit culture is an evolutionary process.  The plan needs a strong advocate who will hold everyone accountable for adopting the new culture.  It is impossible for either your board chair or your executive to fulfill that role.  They must focus on the value creation plan’s success.  That plan has too many parts for either of them to successfully focus on just one of the parts like culture change.  Ideally, the advocate will be someone from the board development committee who has the authority to hold the board accountable.  If the board is held accountable for modeling the new culture, their modeling of the process will strongly influence the staff.

Take It Further:

Give the board development committee the responsibility for ensuring that all reports and agenda are presented in a way that builds support for long-term thinking and value creation

Ensure your nonprofit’s strategy is one that will create value

Discover what questions are most important to a cross section of supporters then include the answers in your annual report and to help drive your value creation

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