When an organization plans to be more sustainable, undoubtedly some will say, “This is a finance matter.” Others’ first reaction will be, “We need new programs to generate more revenue.” And, that might be the problem.
Sustainability is more than a collection of strong revenue streams, according to Steve Zimmerman, CPA, MBA, co-author with Jeanne Bell, MNA, of The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions (Jossey-Bass, 2014). “It encompasses both financial sustainability as well as the ability to deliver high-impact, relevant programs — what we call programmatic sustainability. These are not two separate conversations, but one and the same. It’s not enough to have strong programs if there is no financial engine to support them.”
Sustainability is an orientation, not a destination, he added. “The goal is impact, not financial strength. These concepts are deeply interconnected, yet they’re seldom discussed in an integrated manner. Every decision nonprofit leaders make about finances affects the organization’s ability to deliver on its mission as well as the other way around.”
To assess impact, an organization should select and tailor these criteria:
- Contribution to intended impact (required);
- Excellence in execution (required);
- Scale (touching or influencing many people);
- Depth (creating enduring change in people’s lives);
- Significant unmet need (a unique, critical offering in the community);
- Community building (connecting people around the program, organization or cause); and,
- Leverage (nurturing relationships to expand the organization’s reach).
The sustainability process (www.nonprofitsustainability.org) challenges leaders to do things differently, and assessing every program and having values-based conversations helps them better understand their organizations’ impact and know what their financial drivers really are.