Scaling Altruism: A Proven Pathway for Accelerating Nonprofit Growth and Impact

Donald Summers

272 pages, Wiley, 2024

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My new book, Scaling Altruism: A Proven Pathway for Accelerating Nonprofit Growth and Impact, presents a comprehensive management system for nonprofits of any mission, what I call a “Growth and Impact Methodology.” When nonprofits follow the methodology with fidelity, they achieve and sustain a 25 percent median annual growth rate in both revenue and social impact.

The book outlines the entire pathway to adopt the methodology, with exercises, templates, and real-world examples to guide understanding and implementation. The book also presents a series of case studies that show how Treehouse, a Seattle-based nonprofit serving foster youth, used the methodology to achieve a social impact goal few believed was possible. Today, the Treehouse model has expanded across Washington State and around the United States, and with the book and its associated tools and templates, nonprofits of any mission or field can follow the same process.

Seven chapters outline a complete organizational development sequence that starts with performance assessment and leadership alignment around a goal. It then describes how to create and test what it calls an “investment grade business plan.” It continues with a detailed discussion of revenue generation, both earned and contributed, and offers a step-by-step process for creating a “next generation” fundraising process, which it describes as “Investments and Partnerships.” The book concludes with practice advice for monitoring organizational performance and for ensuring good governance and effective leadership. Each chapter points to the book’s companion website that offers the tools, templates, examples, and additional resources to help with adoption and implementation.

The excerpt below is drawn from the third chapter that guides readers through the step-by-step process of creating a comprehensive business plan.—Donald Summers

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For the tens of thousands of more stable small- to mid-sized organizations with ambitious leadership and enough resources, there is hope and help. For those who have generated the initial consensus described in Chapter 2, the planning process below will build out the 1-page framework into a world-class business plan.

Leaders ready to produce a world-class organizational plan should remember Align Practice 2.2: Choose Powerful Language. Start by calling your document a Business Plan instead of Strategic Plan. The way they are produced, most “strategic plans” are neither strategic nor credible. Perhaps we have been overexposed to the problem, but we have found so many badly written documents masquerading under the term strategic plan that we believe the term itself is tainted by poor practice. Furthermore, it is a savvy decision for nonprofits to embrace the term business to distinguish them from the dysfunction junctions.

“Business plan” is the accepted norm for structuring and explaining organizational goals. Many social sector leaders chafe at being told they need to “run like a business,” and they are understandably suspicious of tools that come out of the white, male-dominated business world, and particularly ones that trash the planet and exploit people. Despite this other type of taint, the business plan format and structure are nonetheless the best way to organize teams and raise money. Consider the fact that, in the United States today, the number one source of wealth is business ownership. Wealthy people are likely familiar with business terminology and process. While there are any number of funders who give away money to inflate their egos, exercise power, stoke emotions, or serve any other number of perverse incentives, we have found that the majority of funders appreciate the clarity and concision of the model described here.

Apart from optics and credibility with funders, there are many other reasons to develop a Business Plan. Think of them as Swiss army knives with many functions and benefits. They provide:

  1. An actionable roadmap for staff giving everyone new clarity on job purpose and direction
  2. Key insights for new hires on the organization and compelling reasons to join
  3. Improved direction for how boards can better fulfill their duties as directors and fiduciaries
  4. Compelling reasons for partners and stakeholders to participate
  5. A library of core messages to drive successful marketing and communication
  6. Powerful fuel for fundraising
  7. A dynamic platform for continuous improvement

Done well, business plans are edited each year, not reinvented.

One Internet search will yield many business plan templates, all with various components and structures. Nonprofits are encouraged to engage in concepts such as “Theory of Change” and “Logic Models,” which are unnecessarily complex and only generate ambiguity when it comes to finance, staffing, execution, and other critical planning elements. The most concise and robust models are, as elsewhere, designed for for-profits. To make the discipline of the for-profit planning models applicable to the social space, we provide a synthesized model here.

Plan Practice 3.1: Follow Good Process

Keep the following pointers in mind throughout this chapter:

  • Do not try to start a business plan from scratch. Start with the Align exercises in Chapter 2 to generate the necessary consensus on high-level decisions.
  • With the Align Practices accomplished, the CEO directs the process of building out the general framework into a full plan. The plan should not be written by committee. The CEO is the Chief Planner and should either write the document herself or closely oversee either staff or consultants to help.
  • Short and simple is superior to long and complex. Ensure the person drafting the business plan is a gifted writer, unpretentious and concise. The point is clarity, concision, and ease of reading. Avoid hype and “sales-y” language. Be plain spoken. Delete adjectives.
  • Use numbers, facts, and research as evidence.
  • Don’t let the perfect be the enemy of the good. High-caliber plans often demand dozens of iterations. It might take 2 or 3 revisions or 20 or 30. This is a dynamic document and it evolves on an unpredictable path.
  • Get the plan to 80% complete and follow the guide in Chapter 4: Test to improve it via a consultation process.
  • Skip fancy formatting and pretty pictures. Business plans should not look like brochures. These documents are always drafts to be improved as the organization learns and evolves. The biggest barrier for CEOs is trying to create it solo. While the CEO or a close colleague should write it, revision is a group exercise. Chapter 4: Test provides additional insight here.
  • One of the hardest parts is presenting all the business plan elements in a document no longer than 10 or 15 pages. People rarely read long documents, especially staff and board members. Take the time to make it short.
  • Finally, remember that even the most carefully constructed plan will get many things wrong. It needs testing and then at least a year of implementation and revision before traction builds. Good business plans take 3 months to create, another 3 to test, and at least a full year of funding and execution before they begin to really solidify.

Plan Practice 3.2: Develop a Clear Problem Statement

Business plans get right to the point in the opening sentences with crisp, clear, concise language that describes the problem in the world that needs to be fixed. Use descriptive statistics and best available research to describe the cost of the problem in multiple dimensions: human, social, moral, economic, and environmental. Keep it under 250 words. Consider the example below from Treehouse.

Case Study: Treehouse’s Problem Statement

Youth entering foster care face tremendous challenges. The abuse and neglect that lead to removal from their birth home have a lasting impact on children’s social and emotional well-being. Entering foster care itself often means a change in schools, time out of school, and a loss of support for their education. There are 1,500 kids in foster care in King County on any given day; every year, 600 more youth face a crisis in parenting. Just over a third of these children will graduate from high school on time (Washington State Institute for Public Policy, 2009). Fewer than 2% of alumni of foster care complete four-year degrees (Casey Family Programs, 2005). Even those who work to reverse these outcomes face challenges of their own, including challenged schools, scarce public resources, and a support landscape that is complex and gap ridden. Studies demonstrate the long-term impact that inadequate education has on the lives of foster youth: nearly one-fourth of foster care alumni will experience homelessness as adults; 80% of foster care alumni aged 19-20 live below the poverty line, and one-third rely on public assistance (Washington State Institute for Public Policy, 2008). The median income of former foster youth in their mid-20s is $8,000 (Chapin Hall Center for Children, 2004).

Plan Practice 3.3: Describe the Solution

What does success look like? Different people care about different things, so describe not just the social justice or moral benefits but the economic and/or environmental ones. Perhaps the proposed impact corresponds to one or more of the United Nations Social Development Goals. End this section with the vision statement—a critical element that was covered in Chapter 2.

Case Study: Treehouse’s Solution Statement

There is a large – and growing – body of research that tells us that kids are much more likely to graduate from high school when they attend class regularly, are not removed from their classroom for behavioral disruptions, and don’t fall behind on accumulating course credits (Casey Family Programs, 2005; Chapin Hall Center for Children, 2004). We also know from both research and practice that foster kids succeed more often when they have a positive academic mindset, have a plan for their future, and are engaged in a meaningful extracurricular activity (Washington State Institute for Public Policy, 2009; University of Chicago Consortium on Chicago School Research, 2009). Therefore, Treehouse is targeting its efforts to keep the youth we serve on track in these areas – attendance, behavior, course completion, mindset, planning, and extracurricular engagement.

In order to achieve a sea change in graduation rates for foster youth in King County, we know we need to serve every student in foster care through middle and high school. Beginning with the expected graduation class of 2017 – this year’s 8th graders – Treehouse will scale its services to meet this need. Students will be brought on track to graduate and kept on track with targeted support and services.

Plan Practice 3.4: Craft a Value Proposition

As the New York Times’s Nicholas Kristoff observes, “Any brand of toothpaste is peddled with far more sophistication than the life-saving work of aid groups.”1

The missions of social impact enterprises are often far more important and compelling than the consumer goods that attract our attention every day, but we don’t know about them or why they are important because social sector leaders are socialized not to proclaim their own value. There’s a time and place to be quiet, humble, and self-effacing, but not when leading a social impact enterprise.2 Use this section to define why the organization is the best solution to the problem and include evidence—that is, proof points—that the organization is capable of solving the problem.

If early-stage organizations don’t have evidence yet, they can say they are following the best available research or running best-in-field pilot studies to find the optimum solution. There’s always a value proposition.

Case Study: Treehouse’s Value Proposition

Treehouse is entering its 25th year and is nationally recognized for its commitment to serving our most vulnerable youth. With fierce optimism, Treehouse is investing in the lives of these young people who have faced a crisis in parenting. By securing the opportunities they equally deserve, we are helping them build their lives and prosper in a society where all of our children are wanted and needed. Preparation for this initiative included a complete restructuring of Treehouse programs and staffing to create a lean, flexible, and data-driven social enterprise; a commitment to working in focused partnerships with agencies with shared goals; and development of an agency infrastructure that will allow the scaling necessary to serve every middle and high school youth in foster care in King County.

Attentive readers recognize that this value proposition is missing proof points. When the Treehouse plan was written in 2012, the organization had zero evidence its proposed interventions would work. In fact, previous efforts at boosting graduation rates had failed. The value proposition for Treehouse presented as an example in Chapter 2 was only possible years later when the programs had become very successful.

New programs and initiatives will thus lack proof points, so work with the evidence at hand: if there are no proof points, lean on best research or analogues. The quality and clarity of the business plan can compensate for their absence, along with well-prepared and knowledgeable staff who present the plan and make it clear, as was the case with Treehouse, that it was an early-stage effort yet to generate the results. The organization had also built up tremendous good will and earned credibility for its previous work, so in this case, the absence of compelling proof points was not fatal.

Plan Practice 3.5: Explain Who Is on the Team

When private sector organizations raise money, the first thing they emphasize is not their product, but who is running the organization. Introduce people to leadership with brief bios of the board and executive team. Highlight their expertise and professional experience and explain that these are proven industry professionals that deserve trust. As elsewhere, keep it short and simple.

Take note: Is this team world class? Sophisticated investors always look first at the team, and then at the business model. Jim Collins calls this first who, then what. The best plan and strategy won’t get executed well without great people doing the executing. Get the right people on the bus.

Plan Practice 3.6: Pick a BHAG

If the organization has done the hard work of aligning board and staff according to the practices in Chapter 2: Align, picking a BHAG should be relatively simple. Trying to write a business plan from scratch, without first taking this and the other incremental steps described earlier, is extremely difficult. How does one eat a (metaphorical) elephant? One bite at a time. A BHAG can be scary—that’s why it is called audacious—and the big challenge is keeping everyone focused on the task and not getting overwhelmed by all the other elements.

An organization should have only one BHAG—an ambitious, long-term outcome, not output, that aligns every member of the team around one unified vision. A succinct, understandable goal is essential to ensuring everyone understands the organization’s objectives and how they will be achieved. To survive, too many nonprofits, even large ones, chase opportunities and bow to funder demands to define objectives. Whether called a BHAG, North Star, or other term, setting a focused goal is as much about what the organization will not do as much as it will do. In a 2011 Forbes interview, Steve Jobs shared one of his secrets for success:

People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying “no” to 1,000 things.3

A BHAG is expressed in the form of X to Y by Z, making it very clear what the organization will achieve, and by what time. As Jim Collins writes, “The best BHAGs require both building for the long term and a relentless sense of urgency: What do we need to do today, with monomaniacal focus, and tomorrow, and the next day, to defy the probabilities and ultimately achieve our BHAG?”4

Apart from ignorance of the concept, the number one reason nonprofits fail to set a BHAG is fear. BHAGs are inherently bold and offer clear accountability. Leaders fear “looking bad” if they fail. What these leaders don’t understand is that failure is normal. The necessity to be brave, learn from mistakes, and try again is basic life advice any good parent gives their children. What these fearful leaders don’t recognize is that the absence of a clear, accountable, aspirational goal broadcasts their fear and aversion to sophisticated audiences with the most power and wealth to help them. If an organization is working on solving an important social problem and doesn’t have a BHAG, it invites criticism that it lacks courage and accountability.

In 2012, despite the failure of all its previous efforts to improve foster youth graduation rates, Janis Avery and her board articulated a remarkable BHAG, one that would ultimately reshape the future of tens of thousands of vulnerable young people in Washington State and beyond. To the present day, we remain in awe of the courage that Treehouse leadership expressed with the following statement.

Case Study: Treehouse’s BHAG

Despite these obstacles, Treehouse is committed to ensuring that foster kids succeed. With fierce optimism, Treehouse will invest in the lives of these young people who have faced a crisis in parenting. Because of Treehouse, foster youth in King County will graduate at the same rate as their peers with a plan for their future by 2017.

At the time this BHAG was released in 2012, it inspired no small amount of vocal derision and skepticism from “experts” in the social sector. They are very quiet today as the Treehouse model expands across the United States.