A few years ago, when Chair of the Management Studies Department David Norgard worked full-time running his own nonprofit consulting practice, a major nonprofit organization approached him about doing planning for funding development. At the time, they had some large grants that provided them a financial cushion. Norgard warned them that they should plan immediately: grants are almost always a short-term income source, and after a few years, most foundations move on to other priorities. Ultimately, they decided they had enough funding and did not need to plan.
A couple of years later, the organization called Norgard again. It was time, they said, to pursue a funding development plan. One of the first things he discovered when he began to work on this plan was that the major grants were not going to be renewed. What was worse? Since they’d last spoken, the organization had not developed any other significant sources of income. He confronted them about this reality and the impending precipice they were about to step over.
Their response: “Just write the plan.”
He did, but short of another windfall, maintaining their funding levels was not going to happen, and “the nature of windfalls,” says Norgard, “is that people can’t plan for them.” Norgard and the organization went through the development planning process with that understanding in mind, but even with this knowledge, it was too late to avoid consequences. To make matters worse, the nonprofit did not put in the work to execute the plan.
“The sorry consequence,” Norgard says, “was that they had to lay off a considerable number of people and are now a shadow of their former selves. The moral of the story is to avoid the panic that this organization found itself in by diversifying funding sources and incrementally, and increasing the return on those funding sources over time.”
In other words, the sooner a nonprofit organization begins to plan for revenue sources, the more likely it is for the plan to be successful. And though not enough organizations abide by this wisdom, most experts agree that it is the best practice. Norgard points to several people who have written about this, including Linda Lysakowski, whose book The Development Plan he uses in his courses in the Antioch Los Angeles MA in Nonprofit Management program.
When he was newer to the field, Norgard once asked a successful nonprofit development director to tell him the secret to his success. The man said he would tell him. Then he leaned over and spoke in a whisper. “David,” he said, “the secret is, and most people don’t appreciate this, that there is no secret. There is no magic. Success is all about sound methods, consistently applied.”
“And in nonprofit development planning,” says Norgard, “sound methods means setting realistic, incremental goals.”