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How a Balanced Scorecard transforms your development efforts

Unless you want to chase your tail year after year, your fundraising goals must be about more than covering expenses: They should aim to build a solid foundation for your organization’s future. That requires a complete strategic plan, one that anticipates where your organization, and the community it supports, are heading.

When you can tie all your fundraising plans and practices directly to your 3-to-5 year goals, you’ll be on your way to building a secure financial future.

THE BALANCED SCORECARD APPROACH: FOUR PERSPECTIVES TO ALIGN FUNDRAISING EFFORTS

MISSION
What we must accomplish for our clients and stakeholders.

INTERNAL PROCESSES
What we must do internally to be effective in the marketplace.

ORGANIZATIONAL CAPITAL
What kind of people and technology we need to enable our business processes.

FINANCIAL
What we must accomplish financially to effectively meet our mission.

The Balanced Scorecard approach to strategic planning, which GCN’s Nonprofit Consulting Group facilitates for nonprofits of all kinds, provides a framework for understanding the future needs of your organization, and aligning efforts in all areas—fundraising, marketing, programming, governance—to meet them. As a result, the process articulates exactly what your organization, now and over the next few years, is doing to change the world for the better.

When you can speak about the future of your work, and the goals you’ve set to meet that future, it tells donors you’re forward-looking, adaptable, and worthy of investment.

Thinking About Tomorrow

Strategic goals must reflect more than a wish list (“Where we’d like to be”) or a vague sense of growth (“What we’re doing now, but more of it”). Effective goals depend on a considered look at the future: “What’s probably going to happen over the next three to five years, and how we plan to adapt.”

The Balanced Scorecard process uses research—examining changing needs and resources, analyzing the competition, and (most importantly) anticipating emerging opportunities and “disruptors”—to produce a set of key future assumptions which explain, in simple language, the direction of your organization, the environment in which it will operate, and the community it will serve over a course of years.

If you’re thinking three years ahead, your development team is in a position to understand who you’ll need to identify, engage, and solicit.

Those future assumptions will guide your strategic plan and, in turn, your fundraising efforts. As an adaptable, problem-solving organization, the question should always be, “How will this organization be effective and competitive three years from now?” If you’re thinking three years ahead, your development team is in a position to understand who you’ll need to identify, engage, and solicit, as well as those you need to steward.

Say a significant portion of your revenue comes from state and federal agencies. You know that, a year from now, the federal administration is going to change hands— and a year after that, the state departments may also. That means policies, funding, and the people your organization works with might also change in the next few years, and with them, the priorities of some supporters—major donors, foundations, and prospects. With all of this in mind, the questions become, “What are we doing right now to engage people on both sides of the electorate?” and “How are resource development efforts keeping us ahead of the changes?”

Considering All the Angles

The Balanced Scorecard process gives you a complete understanding of your organization by examining it through four perspectives: mission, internal processes, organizational capital, and finances. To get a complete understanding of your development efforts, you’ll want to consider your fundraising plan through the four perspectives as well.

Here are a few perspective-based questions to consider at each stage of the donor cycle. (For more on the donor cycle, click here.)

  • In terms of mission, how are we identifying prospects who are interested in the work we do? Are we engaging them with opportunities to take part in mission-related work? Do we have a fundraising strategy that explains the mission and showcases our impact?
     
  • Do our internal processes differentiate us from organizations that address a similar issue or population? Do we evaluate programs and share our results in a waythat helps us identify new prospects and steward existing donors, ensuring they feel good about the impact of their investment? Is our solicitation process adaptable to the particulars of each prospect?
     
  • Do we educate supporters about the importance of organizational capital, and the real costs of funding the mission? Do we use staff or volunteer ambassadors to make the connection for donors and prospects, or can we engage and solicit prospects through technology? Do we have language in place to ask for things like overhead, personnel, and technology?
     
  • Regarding finances, do we have a strategic method for raising, managing, and spending money that appeals to prospects who value fiscal responsibility? Can we identify or engage prospects whose philanthropic goals reflect our future direction? Does our solicitation make financial sense for us and for the prospect? Do we steward donors by sharing with them the impact their investment has made?

Committing to Your Future

Aligning your annual fundraising plan with the strategic plan is a transformational first step.

Establishing a balanced, sustainable funding stream takes more than a calendar of grant deadlines, an annual fundraising event, and a year-end appeal—it takes a proactive approach to fundraising. Aligning your annual fundraising plan with the strategic plan is a transformational first step. When your leaders, board members, key volunteers, and stakeholders commit to a plan designed to meet the demands of today, tomorrow, and years from now, they can finally build the reliable donor pipeline you need to ensure your work’s future.

Karin Douglas is a senior consultant with GCN’s Nonprofit Consulting Group.

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