# Presentation: 517406

## Surviving and Maintaining a Viable Program

**When Your Federal Funding Ends!**

**Notes:**

Strategies for consistently and constantly developing administrative funds are a key element to building long-term sustainability for these organizations.  However, leadership principles, organizational development and established daily operating philosophy and vision also play a key role.

This part of the workshop will explore how organizational development techniques reinforce program support functions and result in not only a healthy organization, but a solvent one as well.

## Contents

- Sustainability
- Transitioning thru planning
- Celebrate
- Operational and Financial Sustainability
- Program Notes

## I. Sustainability

- In the Nut Shell

## The What and Why of Sustainability

- Discard notion that EZ/EC is “just a grant” & focus on your vision and your plan
- “Whole-systems” thinking
- Key is learning and innovation
- A single vision can be achieved through multiple paths

## Whole-systems thinking

**Whole-systems thinking** in the sustainability movement in context*
- What distinguishes whole-systems thinking is a keen awareness of the importance of interconnections, relationships, consequences, and feedback loops. It involves a willingness to consider all significant aspects of an issue, and not to jump to appealing (but usually wrong) simplifications

## II. Transitioning thru Planning 

- Once the designation ends - is there still needs in the community?   If yes – does the community support continuing?
- Has the board put in place plans to move beyond 9/30/2008 when the grant ends?  Or when the designation ends on 12/24/08 ECs and 12/31/2009 EZs?
- Assuming 1 is true, we’ll talk about your plans...

## II. Transitioning cont’d

- Items to consider in your planning:
- Every year the EZ/EC rec’d funds from USDA. Whose funds will you use starting on 10/1/2008?
- What will be the focus or niche of the Board and the organization’s development efforts on 10/1/2008?  Economic development? Healthcare?  Housing? and/or?

## Board Re-Org?

- Circumstances are changing – no more EZ/EC federal funds for admin expenses, feasibility studies, and seed feeding, etc.
- The board has decided to go in a slightly different or significant direction then in the past.  The board should consider re-organizing itself to best meet it’s new or revised mission.  This may mean more board members, or less.  Changing the ratio of elected vs. non-elected. Or changing term limits. New committees, etc.
- Start planning for these changes, get a subcommittee going to examine the structure of the board and organization with a new or revised mission once it’s adopted for use (post-EZEC grant).

## Spin off Activities/Functions

- If the community still has needs and but support is no longer sufficient to continue – who is going to pick-up the activities the board and organization has been doing?  - Spin-off Activities to others.
- If the board/organization _is continuing_, what activities/functions are appropriate for others to carry-out and for the post-EZEC board to continue?

## Employees

- Plan out how employees’ job functions might need to change, or employees position might need to change (letting go, adding on, finding right skill set for the new direction).

## EZ Businesses

- Work with businesses in the EZ to ease transition to not having the EZ tax credits available (unless extended).  While this may not seem necessary, it maybe helpful in keeping the businesses alive and in your area.

## Communicate

- Talk and share information on what the EZ/EC will now be doing with the community, partners and others.
- It might be a good time, to solicit community feedback on what to concentrate on in the coming years.  A community assessment can help with this, and there are different types – talk to your local RD staff person or Desk officer.

## III. Celebrate!

- YUP!   10 years is almost up!   Time to share the stories and pictures of what things used to look like and what things did or did not happen in the community.  And compare to today!
- A one-day festival or the town or county festival turned into a celebration of accomplishments can work as well.
- Share the accomplishments with (potential) funders, current, and former funders, and organizational partners.
- Leverage the good feelings generated by the event, to launch new efforts, increase support for current efforts and find new partners of all types

## IV. Organizational and Financial Sustainability

## Your financial outlook is directly tied to your organizational strategy.  In this next section we look at both, often intertwined.

- It has gotten very comfortable – fairly stable source of funds, many years of working with the same partners, doing the same thing, same executive director.  Now what?

## The lead entity

- The lead organization of the Empowerment Zones, Enterprise Communities, REAP Zones, and Champion Communities may have as much need for organizational development as their communities have for community development.  Some lead entities have discovered ways to build internal capacity that will carry their organization not only through, but beyond the ten-year designation time.

## “The purpose of planning, like the purpose of organization and of most managerial work, is to keep building capability. Build institutional skill. Build corporate capability. Create what the theorists call distinctive competence or sustainable competitive advantage.”

Waterman -- The Renewal Factor: How the Best Get and Keep the Competitive Edge

- Waterman -- The Renewal Factor: How the Best Get and Keep the Competitive Edge

- Management Strategy

## With only one funder-endless cycles of grantsmanship

- Your word processor is your best friend -- construct and reconstruct grant applications.
- Learn the cycles
- Cultivate _your contacts_ in this sector with tailored information
- Believe that every task in every benchmark is ripe for funding.
- Tell funders of the community’s ability to get things done through the accomplishments the community has done in the last 10 years.

## One Path - Foundation Largesse

**Endless cycles of grantsmanship**

**The Wachovia Foundation, Inc.**

**The Pew Charitable Trusts**

**Charles Stewart Mott Foundation**

**Minnesota Mining and Manufacturing Foundation, Inc**

**Bert & Mary Meyer Foundation, Inc.**

**John D. and Catherine T. MacArthur Foundation**

**W. K. Kellogg Foundation**

**Gannett Foundation, Inc.**

**CP&L Foundation, Inc.**

**Ben & Jerry's Foundation, Inc.**

**BellSouth Corporate Giving Program**

**AT&T Foundation**

## EZ/EC designation is a plus for many Federal programs, so if your designation continues, use it!
The funding cafeteria -- look for ways to build capacity one small piece at a time
Stay on top of minor program changes
Take advantage of the “stovepipe”; multiple-fund projects so the admin cut is bigger

- The funding cafeteria -- look for ways to build capacity one small piece at a time
- Stay on top of minor program changes
- Take advantage of the “stovepipe”; multiple-fund projects so the admin cut is bigger

- Another Path - Federal Trough

**Notes:**
Fewer Federal programs have money specifically directed at organizational sustainability.  Reason is probably that the federal programs are more concerned with “building projects” than with capacity-building.

## II. A Third Path - Co-lateral Duty

**Partnershipping arrangements mean achieving multiple goals simultaneously, sometimes by using pieces of positions **

- Volunteers and Citizen Committees

- Special Hires to City or County compatible programs

- Tribal Gov’t Business Development Office

- Program Staff in an existing not-for-profit

- County/City Economic Development Staff

- Councils of Government Staff

- “Other Duties as Assigned”

- CDC Staff

- College/University Staff

- Combinations of any or all of the above!

- Private Sector Loaned Executives?

## II. A Third Path - Co-lateral Duty

- The whole can be greater than the sum of its parts
- Get it in writing! Working for free is not freedom
- Keep the letterheads straight
- Cafeteria approach works here too -- one trip down the line
- Virtual Staff and Culture  -- Invisible no longer

## Executive Directors

- The Whole can be greater -- When first picking up pieces of people to contribute to the organization, be fairly selective.  Look for monomanics who have your mission in mind.  Later, when the organization is more established and has firmer culture and written procedures you may be less demanding.
- Get it in writing -- job descriptions, contracts, formal split time (which days or hours you’ll be wearing which hat)
- Working for free -- For it is truly written that a man cannot serve two masters, either he will hate the one and love the other, etc.  Generally and eventually, the free work gets subordinated to the paid work or the person who pays you become resentful.  There are exceptions -- like when your boss is working for the EZ/EC is working for free also.

## Executive Directors

- Keeping the letterheads straight -- When you represent yourself to the public as an EZ/EC, use your title and role in the EZ/EC, not your other job.  Get separate business cards.
- Cafeteria approach -- If you are building an organization out of pieces of other organizations’ time, try to match up the “critical mass” so that unified coordination takes place.  “Catch as catch can” only works for defined tasks done by independent self-starters.
- Virtual Staffing -- When using co-lateral bodies, treat them as you would a permanent staff.  Formalize the informal. Build a functioning organization, but with appropriate structure.  Just because they are “virtual” doesn’t mean that they don’t deserve rewards and recognition, time and attendance, service and support, desks and space, and accountability and oversight.

## And a Fourth Path

**Entrepreneurial Outlook, but beware of legal restrictions**

- Rental from Business Incubators

- Speculative Buildings

- Niche Business Startups

- Fee-for-service

- Venture Capitalization

- Selling or Renting Your Organizational Skills

- Patents and Inventions

- Grantsmanship for Hire

- Cooperative Marketing

- Bartering skills, information, expertise

- Royalties from publishing what you know

- Angel Investors

## The Fourth Path, Entrepreneurism

- Profitable Proceeds Plowed Publicly in Progress (5 Ps)
- Creative local brainstorming sessions might yield unexpected results
- Find your organization’s niche in the local, regional, or national economy

## 5 Ps

- Plow Proceeds
- Nip mistrust and backbiting in the bud.
- Keep all your entrepreneurial transactions public and out in the open.
- Issue frequent press releases (good advice whenever).
- Make sure to make the connection that the proceeds are increasing the nonprofit’s capacity to return value to the community.  Show that connection whenever possible.

## 5 P’s cont’d

- Brainstorm Creatively -- Find new ways to be entrepreneurial. Add some “free thinkers” to your usual cast of dreamers and doers.  Grab some young people who don’t know “it can’t be done” or “we tried it before and it didn’t work.”  Listen to these new thoughts without judgment.

## 5 Ps cont’d

- Find your niche -- Throw out any old notion that to be an economic player you have to manufacture, market and sell a widget.  Today’s economy is service and the widgets it produces are mostly invisible and intangible.  Discover what your own invisible widget is by exploring what it is you do best as an organization.

## P’s cont’d

- Develop profit making abilities to sustain your organizations efforts.
- Example: Dot Com Incubators -- a niche of finding your niche.  If you have space and any kind of access to large bandwidth, you can play.  Develop the ancillary services as part of your ongoing organization, rent the space, charge fees.
- Nonprofit Enterprise: _[http://www.npenterprise.net/](http://www.npenterprise.net/)__ a forum where nonprofits ask questions and learn from others on how to setup, run etc., a social enterprise – earning profit to sustain your social-economic org._

## The Fun Part

**Any, or ALL of these strategies do work, another way to explore your niche**

- Singly, or in combination, coordination is the key
- Unfortunately, it takes time, but...
- Payoff is a self-perpetuating organism

## The Fun Part -- Activated!

- Find out how your organization spends its time
- Inventory your resources -- physical, capital, human
- Analyze by comparing #1 against #2.  If less than about 20% of your organization’s time is being spent producing resources for your outfit, reorder some priorities

## V. Program Notes

- A one-year extension will be available for EZECs who have projects incomplete and funds still available.  Those details will be released in mid-2008 – a plan for use of the extension will be required.
- ECs- While funding ends on 9/30/08, the designation ends on 12/24/08, during this 3 month period continue to use your designation for marketing, access EZEC set-asides and federal funds.
- A designation extension is possible as bills are in congress.  A designation extension does not automatically mean more grants coming or the grant can be extended beyond the one-year.*

- *OMB

## BMS Use?

- Q. Will the BMS still be available if communities want to continue using it?
- Yes it will be available until______
- Note: The last report due in BMS will be mid-February 2009 for ECs and mid-Feb 2010 for EZs.

## Discussion Questions

- Prime Question:  _DO_ you want to survive as a distinct organization?  Pros & Cons?
- What plans do you have in place to transition away from the EZ/EC funds?
- Re-inventing: What is the new vision or goals or old ones if they are still good?
- What paths can you design that have the greatest payoffs? What criteria (or measures) are you going to use to determine the greatest pay-off?  Financial? and/or Social? and/or # of businesses? and/or # of good jobs? Or?
- What are your communication/marketing plans?