Strategic Planning for Nonprofit Organizations: A Practical Guide for Dynamic Times, 3rd Edition

Chapter 6Step 6: Business Model

In this step, we look at how the organization is supported financially. This business model step takes into consideration the financing of the organization as a whole and builds on the program analysis and theory of change work done in Step 5. Here we are doing some basic financial analysis on individual programs as well as assessing the ability of the organization to fund the proposed future program portfolio we created in the last step.

Summarize Revenue and Expenses

If you are unable to produce the data necessary to generate the following three summaries, your financial management systems are most likely inadequate to the needs of a nonprofit today. Without financial data it will be difficult—if not impossible to create a sound future business model with confidence, since your ability to make effective strategic decisions depends on the quality of the information you have available. Thus, financial management is not just the province of financial controls or other oversight functions; it provides the critical information necessary for true strategic thinking and ongoing strategic management.

Historical Summary and Key Questions

To begin with, prepare an organization-level summary of how revenue, expenses, and net assets have changed over ...