Operational IMPACT Partners LLC
Nonprofit Management Expertise: Sustainable Impact

OIP-Operations

operational performance tuning 


    Operations Performance Tuning:

    • Help leaders identify strategic cost-drivers, sub-optimum overhead costs and functions and processes
    • Provide a data baseline used to track progress on an ongoing basis

    Metric and Dashboard Design:
     
     

    • Facilitates the alignment with organizational strategy and provides a methodology for visualizing and communicating goals, objectives and gap-analysis
    • Key Performance Indicators (KPI's), ratios, benchmarks
    • Decision frameworks and methodology to avail of "opportunity windows"
    • Productive cross-functional interfaces

     Adaptive Cost Strategies: Improving the ROI on overhead costs

    • Develop a clearer picture of costs and benchmark against peer organizations
    • Reduce the right costs and invest in the right areas to enhance mission impact
    • Scenario planning enables quick implementation of "what if" plans so that you stay ahead of the curve, not behind it.


    Scenario planning
    is perhaps the most useful exercise to ensure the organization can execute effectively during times of uncertainty.  Unfortunately, most organizations adopt a "set it and forget it" mentality to annual budgets--once it is created, the programs, services, staffing and cost structure get "locked in" and these are communicated to your constituents-board, funders, staff, volunteers, etc.  What happens when any one, or all of these items change?

    Grants, government funding and even individual donations can fluctuate greatly from year-to-year. Programmatic income and revenue are subject to these same fluctuations--particularly in times of economic uncertainty.  Are you prepared to make "real-time" adjustments when costs increase, funding or program revenue decreases? How will you adjust to minimize the impact of these changes on your programs, constituents and stakeholders?

    OPI specializes in scenario planning-modeling a wide variety of options-"what-ifs" to revenue, costs and all the key components required to deliver services and budgets.  We will develop these models with you-and create a series of templates you can use to adjust in real-time.

    Sample Scenario Planning Template
    Click here to request a sample template with three "what-if" options covering a variety of changes to income, revenue, funding and costs. Utilizing this tool, OIP helps you stay ahead of the curve, better prepared to whether the storm and provide the greats level of mission impact to your constituents and stakeholders.

    OIP Nonprofit Operational Analysis Services:

    Financial evaluation is not an exact science and involves a lot of judgment but can be a very useful tool for evaluating the financial position of your organization within your industry and key trends that can indicate future success or trouble.

    Some of the most useful metrics we look at for our nonprofit clients are the following:

    Program efficiency – this key ratio measures the percentage of each expense dollar that is allocated to programs.  The perfect outcome would be ratio of “1” which indicates that every dollar paid by the organization is used for programs.  Any stakeholder in the organization will perceive this as a reflection of the how well the organization is fulfilling its mission with their dollars.

    Revenue Composition – this metric shows the composition of the organization’s revenue stream.  This ratio answers the question of “how many cents in program revenue is there for each dollar of revenue generated?”  It is also an indicator of how dependent is the organization on outside funding.

    Operating Reliance – this metric shows the organization’s ability to pay for total expenses exclusively from program revenues.  It is an interesting measure size program revenues can come from more predictable and consistent funding sources.  The ideal ratio for this metric is “1”.

    Fundraising Efficiency – This ratio shows how much contribution revenue a nonprofit can generate from each fundraising dollar expended.   From this metric we are expecting a high number which would indicate that the organization generates a multiple of each fundraising dollar expensed.

    Of course, you can also evaluate an organization using the general business ratios used in the for-profit world, such as:  

    • Current Ratio
    • Quick Ratio
    • Inventory days
    • Receivable days
    • Payable days
    • Gross program margin
    • Operating margin

    A thorough financial analysis should be performed at least once per year and use comparative data from at least two years.  The results should be interpreted and discussed with a financial specialist and corrective action should be identified.

    Call us today so we can perform a complete financial analysis on your organization. 

    Nonprofit Management Expertise: Sustainable Impact

      info@operationalimpact.org

    (650) 579-1210