Scaling your nonprofit organization beyond your existing network and client base can be daunting. Not to mention, even figuring out where to start can be a massive challenge.
Where will new donors or new clients come from? Who do you need to hire to support the scale? Is the current infrastructure sufficient? Should I scale geographically, program selection, client type, or in some other way first? Where's the lowest hanging fruit?
This is a common challenge and is about doing three different things in parallel -- 1) creating a funnel or pipeline of new markets, clients groups, products, or cities to consider, 2) determining the best way to reach that new market, and 3) creating a forecast around success to know what the budget should look like for the larger, scaled organization.
#1 - Create a Funnel or Pipeline for Your New Market
As an example, let's assume you are looking to scale your organization and expand into new geographical markets. Think about these new markets as part of a sales funnel with the top of the funnel (Stage 1) being "Investigation" or cities you want to look more into, and the final stage being "Expanded."
Think about what characteristics you need to see from new markets before you will feel comfortable expanding. Do you need a local hire? Do you need $100K in new donations or revenue from that new market? Do you need to take a few trips there to sign off on the culture or client opportunity? Do you need 10 clients to sign on with your service?
You'll want want to use this funnel to help determine which cities are the best fits for expansion. It’s also important to ensure that you don't commit resources too early or too late in the process, resulting in dollars waste or inefficient spending.
#2 - Determine the Best Way to Reach the New Market
What does development, sales or networking look like in a new market? This is often one of the hardest parts of growth because it requires successfully executing on something new, which is always risky even in the best of circumstances.
Consider how you can try new ideas, and new marketing strategies cheaply that allow you to determine what works best for growth. Think about how you can limit the number of new things you are trying at once so that you can quickly isolate the variables that have the biggest impact on your organization.
How can you leverage your existing connections, donors, clients and services to give your organization the best chance of succeeding in the new market? For instance, our team at Notley is currently expanding Philanthropitch to new cities and recently announced plans for Philanthropitch Columbus, our newest expansion city. We spent significant time exploring cities with a lot of potential and vibrant social impact communities. Eventually we settled on Columbus as our next expansion city because of the collaborative spirit we saw from the existing community and their willingness to partner with us to help bring Philanthropitch to their city.
#3 - Create A Forecast Around Success
Lastly, you'll want to make sure you get the financial projections right. One of the worst things that can happen is that scaling is successful and you get off to the races, only to figure out that you are losing money faster than ever before because you outgrew your financials.
Instead of going down the path of most resistance, carefully consider the costs to expand including a lower than normal initial performance and an increase in management and overhead costs. Think about how you might track real-time and regular performance to your budget so that if things aren't going as you predicted, you can catch it early and make changes quickly. All of these initial hurdles are critical factors as your organization grows.
Want to learn more about how to grow your nonprofit? Start with the basics by getting your unit economics in order, which are the building blocks of scalability, and stay tuned for more NotleyEDU Whiteboard Friday videos from our team that dive deeper into creating scalable models.