Nonprofit business plans

A Nonprofit Board’s Best Friend: A Robust Business Plan

A Nonprofit Board’s Best Friend: A Robust Business Plan

By Eugene Fram            Free Digital mage

Viewer Favorite—Updated and Revised

In 2014 after a 70-year run and a terminal struggle to keep it alive, the 70-years old New York Opera declared bankruptcy. At the time, Anthony Tommasini noted critic for The New York Times summarily commented, “In short, artistic excellence isn’t enough.” Mayor Bloomberg, observed that the opera’s “business model doesn’t seem to work.” *

The opera’s demise is a classic reminder that all nonprofits, even those offering quality services, need to do deep-dive reviews of their business plans every three to five years. Following are some alternatives that can be developed if changes are needed. (more…)

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Too Much Information Can Cloud Nonprofit Board’s Decision Making–Tread With Care

Too Much Information Can Cloud Nonprofit Board’s Decision Making–Tread With Care

By Eugene Fram            Free Digital Image

In this age of information overload, nonprofits need to continually scrutinize the quality and source of the material received in preparation for major decisions. Since directors often come without broad enough experience in the nonprofit’s mission arena, they may not be prepared to properly assess its progress in moving forward–and not equipped to make relevant comparisons with similar nonprofits.  In addition, naive or unscrupulous CEOs and highly influential directors may inundate their boards with information and data as a  distraction tactic to keep them busy in the “weeds,” reviewing what has been presented.  Board members need to avoid donning “rose-colored glasses” when assessing proposals from these sources.

I once encountered a nonprofit whose board was about to acquire a for-profit organization, headed by its founder.  Pushing for the “deal” ere the nonprofit CEO and an influential board member who were not, it turned out, capable of the due diligence needed for a project of this complexity. But the board accepted their work without question.  When the acquisition was consummated, the founding CEO of the subsidiary refused to take directions from the CEO of the nonprofit. In addition, although the normal financial settlement of the project requires that a portion of the price be withheld pending adequate performance, the nonprofit had paid cash for the acquisition.  Based on  a lack of performance, the operation was finally closed with a substantial loss. (more…)