EMCF makes investment decisions on the basis of sound business planning— a nonprofit’s roadmap to growth and sustainability.
The plan may outline goals for evaluation, organizational capacity and other elements essential to expansion, and we often underwrite its cost. It covers various aspects of the work a grantee needs to do to grow, from strengthening programs and internal operations to enhancing information systems to boosting fundraising capabilities and other essential activities.
Business planning utilizes concepts familiar to for-profit businesses but just as relevant to nonprofits: forecasting costs and revenues under different scenarios and assumptions, identifying strengths and weaknesses in current operations, gauging and adapting to trends in the external environment, and increasing productivity while maintaining quality.
The discipline of this process can have a transformative effect on an organization, helping it set its priorities, determine how to achieve its goals, and track its performance.
"A very very rigorous process"
Blue Meridian Partners Managing Director Woody McCutchen discusses the importance of business planning.
SETTING MILESTONES
The objectives grantees set in their planning provide the basis for metrics that track performance and measure progress toward their plan’s goals. The grantee and EMCF use these metrics to establish milestones that the grantee agrees to hold itself accountable to EMCF, co-investing partners and its own board for meeting annually and at the end of the investment.
That said, even the best-laid plans can fall short when changing political, economic or other circumstances intervene in ways a grantee cannot predict or control. When and if that occurs, EMCF helps a grantee revise its plan and adjust its milestones accordingly.
Organizations with potential for growth that are not yet prepared to undertake business planning and expansion may receive EMCF support for capacity building that will bring them to this stage of organizational development and readiness.
We frequently engage the Bridgespan Group, MDRC or other management consultants and evaluation experts to help the grantee formulate a three-to-five-year plan that outlines the steps it will take to expand while maintaining or improving program quality.