Nonprofit organizations may have differing missions, taglines, and strategies, but one thing remains constant- the need to attract donors. Donors are the lifeblood of these organizations, providing the funding necessary to sustain operations and accomplish the mission. The donor landscape is constantly evolving and, as a result, organizations must look for new and improved ways to attract donors, while sustaining their relationship with current ones. It is an ongoing challenge to understand the expectations of donors and identify the most effective channels to communicate with them.

In the previous post of this series, we followed the microfinance institution as it went through the process of creating objectives for the strategy map and developing the corresponding measures and initiatives. Now that the strategy was in place, everyone in the organization was eager to begin achieving. This post will take a peek into the first strategy review meeting and provide a brief update on the microfinance institution's progress.

In part two of this series, we followed the microfinance institution as it learned the importance of having an effective mission statement. After drafting and agreeing upon a mission statement, everyone leaned back in their chair and seemed to be content with what they had just done. Eventually, after a few minutes went by, one of the board members asked, "acum ce?" This is Romanian for "now what?"

What is a mission statement? What makes a mission statement effective? How do you become mission-driven? These were just a few of the questions that the microfinance institution in Moldova found themselves asking as they began the Balanced Scorecard process.

After living in Moldova for nearly a year and developing a new strategy for a microfinance institution, I thought it would be interesting to discuss the process of organizational change in implementing the strategy. It may look slightly different in a former communist country, but the key elements span the cultural divide.

We have been fortunate to work with many nonprofits that have dramatically changed their business. One nonprofit grew from five to twenty million in annual revenue. Another grew from twenty to one hundred and twenty million. Yet another rescued its nonprofits from going out of business to becoming a thriving association. I spoke to one of these nonprofit executives about how he made his board more effective as he grew his organization. I think there is a lot to learn from his changes over the last few years.

In conjunction with the March 2011 Mission-Driven Performance Summit, Ascendant and GSMI are conducting a Strategy Management Survey to gain insight about trends in mission-driven organizations.

Please take five minutes to answer our 14-question survey. By answering this quick survey you will receive a coupon for $300 off the standard registration rate for the Summit and be entered into a drawing to win a Kindle e-reader (U.S. residents only).

No matter what size your organization - whether you have major corporate donors or a small army of individual donors - sponsors are the ones who keep the lights on and the doors open. These sponsors expect results and one place they look is Charity Navigator. Tips about improving your ranking are continued below.Every dollar counts and your sponsors are looking to get a solid return on their charitable investments. If your non-profit can show results – and can show that you are wise stewards of the money donated to your organization – you're more likely to see steady or increased funding. Non-profits that cannot demonstrate key metrics of success are likely to lose sponsors and face drastic cuts in their services. One of the most influential ratings services for non-profits is Charity Navigator. This website evaluates thousands of non-profit organizations using financial data to point out which organizations are financially sound and which ones are less effective. If you want a way to excite your sponsors, getting favorable ratings on Charity Navigator is a good way to start. The Balanced Scorecard methodology can be helpful in improving your organization's performance in the areas that are most important to the Charity Navigator rankings. Some of the specific areas reported are detailed below. These areas do not capture your entire business model but it's worth comparing and possibly aligning your goals to maximize your online ranking. Fundraising efficiency: Charities that are efficient are able to raise substantial funding without excessive marketing costs. How does your non-profit stack up? Are you devoting too much of your budget to fundraising, or paying big fees to "for-profit" fundraising organizations? This could drive down your ratings on Charity Navigator, and could also be a sign of potential problems for your organization. Program expenses: Efficient charities are able to devote the bulk of their budget to spending on programs and services – the day to day mission that is the reason the organization exists. If a non-profit is devoting too much money to non-program expenses like conferences and auxillary expenses, it will fall in the ratings. Administrative expenses: While it's important to hire and retain good people to run the organization, non-profits need to keep their administrative expenses at a reasonable level. Charity Navigator measures the overall administrative fees as a percentage of each organization's budget, and compares this percentage to benchmarks at peer organizations. Organizational capacity: This category measures how successfully a non-profit has sustained its programs and services over time, and evaluates the organization's financial strength and prospects for continued success. In this category, slow and steady performance are ideal. Revenue growth versus program expenses growth: How fast is your non-profit growing? How much money do you have coming in each year, and how much of this new money are you spending on additional programs and services? High-capacity charities know how to grow their services in proportion to increasing funding. This measure attempts to show if an organization has the people, systems, and processes in place to successfully convert new money into expanding their mission. Working capital ratio: This is a measure of a non-profit's financial strength, calculated by dividing the organization's amount of working capital by its total annual expenses. This is a way of showing how long the charity could sustain its current programs without new revenue – it's kind of like calculating a charity's "rainy day" fund; even if no new money was raised, how long could the charity stay in business? Now that you have a better understanding of Charity Navigator and how it evaluates non-profits, you can use the Balanced Scorecard methodology to focus on the objectives and measures that motivate your organization, predict success, and excite your sponsors too! We have considerable experience helping non-profits become more aligned and effective organizations. Should you have any questions or need a trusted advisor along the way - we are just one call or email away!

It is hard not to get excited about the Mission-Driven Performance Summit that starts tomorrow in Washington, DC. Drs. Norton and Kaplan are great key notes when it comes to understanding and applying leading edge thinking around the topic of strategy management. There are clinics on Tuesday and then great case studes on Wednesday and Thursday. Over 100 people are registered to attend.

On June 18, the New York Times in coordination with the Nonprofit Coordinating Committee of New York and Philanthropy New York (the old Regional Association of Grantmakers). Like last year, this event was held in the wonderful NY Times center, and the presentations were excellent.