Sustainability is simply a long term method of using resources (be it talent, capital, or community goodwill) that prevents their depletion. It can be the antithesis and the antidote to the vicious starvation cycle we often see in our sector – one that leaves nonprofits so hungry for decent infrastructure that they can barely function as organizations—let alone serve their beneficiaries.
But just as every nonprofit is unique and complex, how to achieve a truly sustainable organization mirrors this complexity and also differs dramatically from one organization to the next. In this article we’ll discuss just one approach to sustainability, our approach at Imagine Canada.
When looking at our sustainability plan, one of the key questions we ask is “What does a sustainable Imagine Canada look like”? Like many charities, Imagine Canada tackles hugely complex, intractable societal problems. In the real world we know that our fight won’t be easily won, so we view sustainability as the ability to move closer to our goals and still be standing to continue our work for years to come.
For operations at Imagine Canada, what does sustainability mean?
- having a dedicated, competent staff complement to tackle our Strategic Directions in both good times and bad; and able to sustain a critical mass of energy, expertise, wisdom, and corporate memory;
- maintaining the networks and key relationships, both within the sector and with important stakeholder groups, which we need to work with and leverage;
- having systems and processes to efficiently scale up our work as resources become available, and also to scale back down as needed with a minimum of organizational disruption; and
- having the discipline and patience to ensure that sustainability is job one for our organization.
We consider these four elements to be the Minimum Viable Organization (the “MVO”)”.
This begs the question of how we will pay for the MVO, and how to do so reliably, year after year. The obvious part of this question relates to paying the staff and related costs (offices, computers, etc) – in accounting terms, generating the revenue to cover staff and related expenses. (There’s a less obvious part to this question – one that is often an afterthought, or overlooked entirely – and we’ll touch on that shortly).
For Imagine Canada, we believe the answer to this revenue challenge lies primarily in several of our long-standing programs that operate on a fee-based model without the need for additional grants or donations – for example, Grant Connect, our popular fundraising service that celebrated its 50th anniversary last year, and our Standards Accreditation program is in its fifth. What is more recent, however, is seeing clearly that these business activities are the key to planning our future and, they merit attention, investment and support even before additional investments in our Strategic Directions. Remember, sustainability has to be job one. For other organizations, the answer may lie in government funding, or in individual fundraising, or some other source or combination of sources. The key is to determine which methods will most likely stand the test of time for your organization, even in a rapidly changing environment.
The implications of these activities being critical to our future go beyond simply continuing to operate them. This mission-critical status has directly changed our organizational structure. It has influenced the staff complement supporting these activities, with a strong focus on marketing, finance and other business-like skills. And it has guided the development of new internal metrics, focusing on leading indicators of profitability and sustainability, driving a renewed focus on long-term customer, donor, and member satisfaction and retention.
The less obvious part of the sustainability equation, one that is unfortunately even more difficult to address, relates to capital. Every organization needs capital: the longer term source(s) of funds that pay for the assets used by the organization. These assets –buildings, vehicles, computers, or intangible items like software – need to be acquired, maintained, and periodically renewed in order to stay operating. Some nonprofits will have limited needs for assets and others will be capital intensive. Of course, much can be rented or leased – such arrangements are themselves often a form of capital – but every organization needs some assets. If nothing else your organization, and every organization, needs cash on hand, enough to pay next month’s bills and to make up for the variability in collecting revenues.
For Imagine Canada, much of our capital is provided by those social enterprises, most of which collect fees in advance of services being delivered. So long as those advance payments keep coming they provide a reliable and inexpensive form of capital for us. But where this is not enough – to acquire new computers, to build the sophisticated software that drives these activities, etc. – we must turn elsewhere. That may be the bank or supportive foundations or the nascent social finance sector. Ignore this issue at your peril, for those assets are quite literally the future of the organization.
Finally, all the foregoing is aimed just at supporting that MVO we spoke of earlier. That hardly sounds like a recipe for dramatic results, and it’s true – our work is not yet done. With a solid foundation, the next step is to go beyond to source additional revenues, and begin scaling up our work as additional revenues allow. For Imagine Canada, we often turn to sector partners (foundations, charities, and individuals) and enlightened corporations who see the tremendous value to the sector that will come from us achieving our goals. Project funding and other types of support allow us to multiply our efforts and our successes, while preserving the integrity and sustainability of the underlying core organization.
It will come as no surprise that all of this adds up to less than a guarantee of future prosperity. But for Imagine Canada, it firmly puts our future in our own hands and keeps us moving ever closer to our dreams.