20 Keys to Building a Successful Social Organisation

Over the past few years I've looked at problems faced by a number of different social organisations, including new startups, developing organisations, and fully established ones. I typically see one common underlying factor; many of the issues stem from a failure to define some key points with the clarity and simplicity needed to make those definitions useful.

Before we continue, let me just say that this is not going to be one of those articles with 20 tenets or pieces of pithy advice. It is about 20 key things that you can and should work out for your social organisation.

At its core, everything I outline below can all be summarised into one overall key to success...

...FOCUS!!

Until you define your key points of focus, your limited funds and resources are continually wasted on attempts to cover all bases and do too many things. You end up with a Brownian motion of people’s activities; lots of ad-hoc decisions made around on a host of assumptions. It all heads in one general social direction, but with a lot of wastage and pain along the way. Prioritising becomes impossible and core platforms of long term development get missed. Over time, this leads to many of the problems and fire-fighting that social organisations face.

Here’s my list of 20 key things all social organisations should have written down.

1. Mission
   The real reason you set up.
   


2. Goals
   What you want to achieve & How.
   


3. Potential Revenue Streams
   Split into core, supplemental and potential revenue. Think business model innovation.
   
   • Strategy for long term Financial Sustainability.
   • Core revenue – Grants, donations, and products or services you charge for.
   • Supplemental revenue (opportunities for monetising your organisational brand, IP, audience and assets).


4. Target Audience
   
   • Groups that you’re trying to impact.
      Primary, secondary and tertiary.
      Outline needs of each group.
   • Recruitment strategies.
   • Long term value for beneficiaries.


5. Services & Offerings
   Make sure they are what your audience really needs, and not simply what you can or want to offer.
   • Core.
   • Peripheral.


6. SWOT Outline
   i.e. A quadrant grid showing Strengths, weakness, opportunities and threats.
   


7. Vision
   Where you plan to be in the Short, Medium and Long Term.
   
   • Realistic short-term (1yr).
   • Challenging medium-term (3yr).
   • Inspirational long-term (5-10yr).
   All your strategies must work towards this long-term vision. You must know how your org can best act as a springboard for long term value to the individual or community.
   


8. Development Strategy /Roadmap Plans
   These need to be created specifically to achieve the vision – ideally for a 3yr timeframe. Include yearly changes for organisation size and structure, development focus, and revenue needed.
   


9. Cost/Revenue models
   These must directly fit your roadmaps.
   
   • Detailed costs of services inclusive of all overheads.
   • Profit margins over and above cost. It is surprising how often organisations get profit assumptions completely wrong.
   • Cost / Revenue grouping for ongoing comparison.
   • Realistic funding needed and how it will be distributed.


10. Risks and Mitigations
    Growth and Development challenges & how you’re going to address them.
    


11. Plans for ensuring long term value to your end audience
    For example, alumni community platforms to enable interaction and ongoing engagement between beneficiaries.
    


12. Competitors and Similar Organisations
    Regionally and globally (now that we’re all connected by the web, you are competing for recognition, funding and audience with organisations from all over the world). Knowing these can also help you build great collaborations and make a bigger difference (see 16).
    


13. Unique Selling Points & Differentiators
    If you don’t have any, make sure you create them. Without these there is no good reason for funders to pick you over the myriad organisations out there.
    


14. Potential Funders
    
    • Identify sectors and prioritise – typically
       Corporate CSR,
       Commercial Brands that want the association,
       Trusts,
       Government,
       Individuals,
       Community.
    • Identify specific targets.
    • Identify what value they would gain from being associated with your org (conversely rethink what you do to ensure that funders get clear value from their engagement with you).


15. Framework for displaying Social Return on Investment (SROI)
    


16. Support Networks
    Organisations that you could partner / affiliate with:
    
    • Social sector funders and developmental organisations
    • Charities and NGOs
    • Other organisations doing similar things – collaborating is a very fast way of scaling your outcomes and your reach.


17. Targets & Performance Management
    Anything you’re trying to develop must involve something to aim for. Your vision roadmap should essentially define your targets for you.
    • Short term activity targets that roll up into long-term impacts.
    • Strategies or mechanisms for monitoring long-term impacts. In the long run this is going to be your best selling point for raising investment and support.


18. Brand Strategy
    Brand associations drive both individual and corporate engagement.
    • What image and personality you want to project
    • Core themes and messaging


19. Marketing & PR Strategy
    • Channels you’re going to focus on
    • Messaging
    • How you plan to involve/engage press media (online and offline)


20. Community & Social Media Strategies
    The web is now ubiquitous and a global connector for communities. It can also drive funding and support from sources you never dreamed you could access. Social media refers to the free and open platforms that already have huge connected audiences, like Facebook, Twitter, Ning and Youtube. All you have to do is surf the wave.
    
    • Plans for building global and regional support communities using the web
    • Social media strategy
       Social media platforms and goals for each
       Codes of engagement and responsible resource

Once understood and defined, many of these points of focus roll into one another and can be prioritised, developed and managed with very little effort. You don’t have to be gung-ho and try and get everything achieved in one massive effort. Social issues are typically long term and have few quick fixes. As a social organisation you should be planning to be around for a long time so continual small steps in a clear direction are often all you need to be successful in the long run.

For each key driver, the trick is to avoid lots of words or huge business plan style documents that cannot be easily read or updated. Instead aim to have single PowerPoint slides or 1 pagers with short descriptions or a list of bullets that clarifies the essence of what you’re trying to achieve. Do NOT waste time debating semantics or making it perfect. Just brainstorm what you know, identify the gaps and dedicate some time to defining the answers. All you need is enough to provide clear direction and some decent guidelines for ongoing decision making.

Always think practical and focus on communicating simply and effectively. Check the following:

1. Can the definitions be used by people within your organisation?
2. Can they be reviewed and updated easily?

If the answer is no, make them simpler. Here are some 1 page outputs that you can easily pass around, stick up on walls, and review on a running basis...

• Mission, Strategy, Tactics Pyramid.
• 3 year Vision and Strategy Roadmap.
• SWOT grid
• High Level Stakeholder Analysis (covers audience, funders, support networks).
• Summarised Cost vs Revenue Charts.
• USPs.

Create a review point every 6 months, plan in the resource and effort to make sure it happens, and away you go!

If you want help with any of this drop me a line and I’ll talk you through it.

3 Types of Partnership For the Social Sector

In my previous post on whether Partnerships and Collaboration might save the third sector, I suggested that one reason why small charities are failing is the nucleation of the sector caused by self interest in raising funding. However, beyond a point they all have the same collective goal, which is to effect positive social change. Unlike businesses which are just out for themselves, this commonality of higher purpose means that charities and social enterprises are perfectly placed to cooperate and collaborate to survive.

I see 3 forms of partnership that are immediately viable for most small social organisations, none of which are being fully explored

1. Sharing operational costs and services
2. Collaborating with competitors to develop better and larger scale joint-propositions
3. Developing complementary partnerships with non-competitors to reach new audiences

Type 1: Shared Services

One of the biggest problems that small organisations have, especially when transitioning into the mid-sized space, is covering the cost of operational overheads

• Physical space
• Human Resources and Payroll
• Finance and Accounting
• Marketing & PR

You've got 3 options here.

1. Outsource all these activities, but not to multiple consultancies or commercial companies like some charities do, but to some kind of Shared-Service Centre dedicated to centralising and performing activities that don't really need much flexibility in decision making - like for example Payroll, Production of marketing materials, Execution of marketing campaigns, Street Fundraising, and Raising awareness through Social Media.
   
   A few years ago when I was consulting to Public Sector, there was a huge drive to get local governments to band together and exploit shared service centres for exactly these reasons. Improved efficiency and effectiveness.
   
   However, unless I'm missing something, I don't think anything like this exists for the social sector, which means that right now there's a gap in the market. I suspect that the reason for this is not that there isn't a viable business model here, but that no-one's really invested time in taking the idea to execution. I'm sure this service could be set up as a Charity so that fees do not become prohibitive, and I don't imagine it would be too hard to raise government funding to set it up either.
   
   A point to note here is that one of the issues with outsourcing or sharing back office functions in the UK lies in tax (thanks Cliff for pointing this out). The Government actively encourages charities to collaborate to reduce cost, but the VAT system penalises those that do. If one charity supplies services to another it has to charge VAT on the supply, and the charity paying for the services cannot recover this. Apparently there is a lobby to get the Government to address this disincentive to efficiency but extending the Charity VAT exemption appears to be a no go zone for Treasury. All things considered however, I'd still suggest that even with the 15% VAT, charities could see benefits from sharing/outsourcing their operational costs.
   


2. The other option is to set up a collective of local charities and social enterprises, and for the collective to either share resource, or co-fund and set up an equivalent shared service centre with dedicated teams that perform these functions. These organisations will gain from efficiencies in use of space, resource, and shared best practice and if they take a risk and trust each other the way they should, it will simultaneously create a space for cross-fertilisation of ideas.
   


3. If you're starting up a social organisation, or are about to grow/scale yours, plan your restructure to split out your operational functions. Create a new revenue stream by using your team to offer these services to other smaller charitable and social organisations. It requires some strategic thinking and sensible management, but is neither as difficult or as complicated as it sounds. You may even be able to raise funding to offer this service.

Type 2: Joint Offerings with Competitors

Any social issue you're trying to address will have other organisations that do similar things to you. Typically you're going to compete with them for the pots of funding out there. However there really is little or no reason for this. If you're all working together to effect the same greater good, you've immediately got a clear commonality of purpose. If you collaborated and pooled your skills and resources you might be able to achieve much bigger things.

A collaborative network of organisations driving towards the same goal is significantly more powerful than a disparate group of small entities all pulling in different directions. Imagine how much more funding you would attract as an industry, rather than as single companies.

So instead of pumping money into Marketing and PR and networking to make your profile stand out from the competition, you should be putting your energies into building relationships and working protocols with other organisations like yourselves so you can set up joint propositions and pitch for bigger funding.

This is not a short-termist approach. It takes time and needs learning. Start by building relationships and connections with your 'competitors', and create forums or events where you talk and find out about each other. Focus on building trust. Find one other organisation that does what you do, and then pitch for larger projects and funding together. Evaluate and learn from your experiences, and then grow your network. At some point you will have created the basic framework that allows you to rapidly add new connections, and to help them slot in easily.

Be aware that there will be challenges you should expect to face, including

• Trust
• Personal and organisational egos
• Contractual and legal definitions around distribution of finance and delivery of outputs
• Programme management challenges across organisational boundaries
• Quality control

Type 3: Complementary Partnerships

There are two sub-types here. One is complementary partnerships in a causal chain and the other involves partnerships to improve the impact and quality of services offered.

1. Full Chain (End-to-End) Partnerships are particularly useful for organisations that offer niche services, or focus on a particular aspect of a bigger social problem. What typically happens, is that as niche organisations grow, they keep trying to add the offerings that are needed to create the broad impact they really want, instead of looking for ways to plug the gaps more efficiently.
   
   Taking the issue of youth social exclusion for example, the journey from exclusion to successful reintegration within the system involves transition through and from social care, into learning, and finally successful employment and stability. The learning bit alone involves literacy, numeracy, life skills, specialist skills, and entrepreneurial skills and ranges from drop-ins to accreditation. A plethora of organisations exist that support different bits of the chain, and yet they often work in isolation from each other, or try and grow to cover the entire spectrum.
   
   A better approach is to identify and build relationships with organisations that aren't your direct competitors. Similar logics and challenges apply as in the previous point, but this is easier because you don't have a history of direct competition. Plugging each other's gaps will help you create broader, more compelling services and pooling together will make you significantly more effective across the board.
   


2. Gap Partnerships are ones where you look for ways to improve the quality and effectiveness of what you do by teaming up with organisations that have a complementary focus, products, services or skills that save you from having to employ or develop them yourselves. You can offer each other all sorts of value, from access to different audiences to new skills and capabilities and most crucially, credibility through association.
   
   This form of partnership is particularly applicable to connecting and working with commercial organisations that are interested in your target audience, or could gain brand kudos through their association with your social cause. Their involvement may include financial support, access to commercial networks and platforms, specialist skills, operational services or progression pathways.
   
   The trick for social organisations is to identify and develop their audiences, services and brand image in a way that makes them attractive to other organisations. Note that contrary to assumption, this has no correlation with compromising core purpose, and typically is only achievable by staying focused to the social cause and social outcomes.

Could Partnerships And Collaboration Save The Third Sector?

In a recent post on whether the Retail Industry Could Save Itself Using Game Theory I discussed how retailers have exhibited classic non-cooperative behaviour, which has significantly damaged their abilities to survive the credit crunch. By focusing only on individual interest and survival, their collective hyper-competitive actions have likely damaged their entire industry's market size.

The charity sector is becoming similarly nucleated by self interest in raising funding. In my previous post on Small Charities Struggling To Survive The Crunch I discussed reasons why small charities are struggling to adapt in the current climate. What I didn't go into is the fact that there is a plethora of small and mid-sized organisations out there, all competing against each other for diminishing funding, and this is only accelerating their slide towards closure.

The trouble is that the funding they are competing for tends to be governmental or Trust based, or small scale social funding for Social Enterprises. This is because their small sizes mean that they struggle to tap into large scale CSR philanthropy or investment, because their brand recognition and localised outcomes are too negligible to return any associative value back to big corporations. The top 400 UK organisations handed out nearly half a billion pounds in 2008, and small charities and social enterprises probably saw very little of it.

However there is no need for things to be this way. More than commercial industries, the social sector is perfectly placed to cooperate and collaborate to survive. Partnerships can help reduce costs and increase the scale of funding that can be accessed. More importantly however, they can create connected support networks and buffers to keep each other going through difficult periods.

As the Chair of a medium sized youth charity, I can see potential in 3 forms of Partnership that could save many small charities and social enterprises from going under over the next few years.

1. Sharing operational costs and services
2. Collaborating with competitors to develop better and larger scale joint-propositions
3. Developing complementary partnerships with non-competitors to reach new audiences

I'll discuss these in more detail in my next post on the 3 Types of Partnership

Small Charities are Struggling to Survive The Crunch

Children England, the umbrella group for children's charities just published results of a survey of small charities (under £250,000). Turns out 4 out of 10 are now in a vulnerable state and could be facing closure if their fundings don't come through. This is up from 1 in 10 in 2007, which is a clearly indictment of the current situation.

Unfortunately this is something I'd predicted a little while ago in my post "Will Charities Survive The Credit Crunch?"

The charities closer to this size are feeling it worst. It's a problem I'm seeing with BANG Edutainment too. The underlying issue that the funding needed directly reflects operating costs, which are based on contracted outputs or services. Raising funding in the quarter to half million bracket is very hard right now, because typically it relies on lots of small sources rather than one massive one. If even a small number of the sources of funding are impacted by the credit crunch it means that operating costs cannot be met and without the reserves of profit making organisations, debts pile up very fast.

Scaling down unfortunately is not as easy as you might imagine either. To do this in advance of a financial crisis requires significant strategic pessimism; which commercial organisations typically dont have, let alone charitable ones. If you haven't already anticipated problems, the tightly stretched capacity of charities means that there is little or no room to adapt, and their close knit nature means that letting staff go is an absolutely last ditch choice; one that is usually held off in the hope of new funding coming through and rarely made until its too late. The result is a pile up of salary, overheads and tax debts by this point, leaving the organisation little option but to close.

A survival strategy that is not being considered carefully enough by many small charities is partnerships. I'll discuss these in more detail in my next post.

Future Trends in Social Enterprise

In my previous post I talked about Social Enterprise Trends to expect in 2009. I outlined 5 key ones:

1. Rise in social startups and skills available to the sector
2. Higher expectations from funders
3. More support for big ideas
4. More partnerships and collectives
5. Blurring of lines between Charities and Social Enterprises

The trends outlined below however, are not time-boxed to just 2009. These are shifts I believe will happen at some point between now and the next few years, and are therefore worth considering in your future planning.

Future Trends in Social Enterprise - 2009 onwards

1. Disruptive innovations will continue to flourish as commercial sector skills are turned towards solving social problems.
   
   
2. Social innovation from the developing world will begin to drive developed world commercial innovation. We are already seeing this in the way western banks are looking at micro-loans and telecoms firms are looking at mobile payment systems.
   
   
3. Corporate Social Responsibility departments will have to adapt and revise their policies, because social enterprises are redefining the parameters of giving and support as they continue to effect major social change.
   
   
4. Increasing pressure on social sector to become business viable will result in more social startups emerging as social enterprises rather than charities.
   
   
5. Charities on the other hand will get smarter in their trading setups, further confusing the definition of Social Enterprise.
   
   
6. As the Green movement embeds further into the global cultural psyche, both social enterprises and charities will face increasing expectation to be green just to be credible.
   
   
7. Social Enterprise will mobilise more people to enter the social sector by making it more competitive, responsive and modernised.
   
   
8. The CIC will start to come into its own, and will evolve into a more viable organisational definition.
   
   
9. As more organisations begin to deliver both financial return and social change, a more practical measurements of Social Return On Investment will arise. Over time we should expect to see clear standardisations of SROI for comparative purposes.
   
   
10. As SROI measurement standardises we should see increasing numbers of Social VC's, philanthropists or Trusts whose funding has social conditions. Some of these currently exist, but regardless of their mission statements, returns are still predominantly measured on financial profits or ability to repay these social loans and investments.
    
    
11. New business models monetising social need will continue to arise, as social entrepreneurs look to innovate under pressure of financial difficulty and social demand.
    
    
12. If social collaboration really does take off, we should also see an increase in collaborative shared services that let small social enterprises and charities focus on their core goals without worrying about peripheral activities like HR, accounting and fundraising.
    
    
13. As the social sector evolves down the commercial route, and as more commercial sector staff enter the social space, the general quality of skills expected from CEO's and managers is going to increase.
    
    
14. Consequently I'd expect a trend towards higher wages for nonprofit workers as demands cause skills profiles to increase.
    
    
15. Finally we should also expect to see more courses and better training for social entrepreneurs, with something like the IOMBA specifically for social entrepreneurs.

Social Enterprise Trends 2009

Every January people typically start to wonder what's coming up in the year ahead for their industries. The social enterprise and the non-profit sectors are no different. It's just that fewer people publish anything of value, mostly because these sectors are not awash with analysts in the way the private sector is. Anyway in case you're curious, here's my thoughts on where things might be headed for social enterprise.

Let's start with immediate trends to expect in 2009. Most of these are inevitably going to be defined by the impact of the credit crunch and the increasing ubiquity and impact of the social web.

5 Trends in Social Enterprise for 2009

1. Rise in social startups and skills available to the sector.
   
   Increasing numbers of highly skilled private sector employees are being made redundant, and many of these are looking for ways to keep their skills sharp and occupy themselves positively and productively. Some will join the existing wave of social and third sector enterprises, and others will take the entrepreneurial route. I'm seeing this trend already with one of the charities I'm involved with.
   
   
2. Higher expectations from funders
   
   As the markets suffer and investments fail or continue to provide lower returns, many of the large trusts and social funders will rapidly find their liquid funds diminishing. While I doubt this will stop them continuing their missions, I would in turn expect them to become significantly more focused on quality and viability of financial and social return.
   
   
3. More support for big ideas
   
   As social enterprises continue to leverage the web and mobile to effect social change, social funders like UnLtd will have to start catering for big ideas rather than simply grass roots start ups. Google has already upped the ante with its Project 10^100.
   
   
4. More partnerships and collectives
   
   These should emerge as more forward thinking Social Entrepreneurs look for ways to partner together to stay afloat in the face of financial pressures. I'd expect to start seeing more collectives like the Hub bringing small startups together, and more web services dedicated to letting groups collaborate.
   
   
5. Blurring of lines between Charities and Social Enterprises
   
   We already know social enterprise is blurring lines between the profit and not-for-profit sectors, but the rise in success of social enterprise in both social and financial terms is also increasing the pressure on more and more charities to become financially sustainable through commercial revenue streams. Conversely I'd expect to see a number of social enterprises abandon their financial goals under pressure of the credit crunch, and look to use their social impact to gain charitable status in order to survive.

(Note: I've explored some more trends in Social Enterprise in my post Future Trends in Social Enterprise, which covers developments to expect beyond 2009.)

Google Needs More Time For Project 10^100

Those of us who put in our ideas for the Google 10^100 funding project were hoping to hear back about the shortlist at the end of January. I hadn't heard anything so I assumed iVolntr.org didn't make the cut, but thought I'd better check anyway. Turns out it's not over yet :)

Here's the official word from Google...

"Thank you to everyone who submitted an idea. We received over 100,000!

Due to the enthusiastic response we received, it's taking us longer than we expected to review all the ideas. Come back on March 17th to help vote for your favorite idea."

If you want a reminder to go back and vote on the 17th, you can pop your email address in here http://www.project10tothe100.com/reminder.html