Post on 17-Jan-2016
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Strategic Thinking About Local Sources
Ken Phillips, Organization Futures CFP Workshop in Kiev May 2004
Management
Finance
Trust
Fundraising Program
Governance
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Trends for Organizations1. Geopolitical focus moves south and east.2. Reductions in foreign and government funding3. Increased role and importance of the civil society /
organization sector4. Increased competition for funds5. Rising expectations about results6. Donors and participants press closer to NGOs7. Growing competence in strategic planning, capacity
building, fundraising, public relations, branding, community involvement, and board development
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Organization Development Stage 1
Good program following donor initiatives 1. The donor determines the mission, sets the budget, and issues an
RFP2. Your organization writes good proposals in response to the
donor’s plan and RFPs3. The donor does the strategic thinking and set the goals for you4. You carry out the donor’s intentions if you get the grant or contract5. Your board is a program oversight board with a financial
assurance role6. Your executive director is a program director for the donor7. You respond to what the donor asks you to do8. You are a contractor for that donor
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Organization Development Stage 2
Taking control of your destiny by initiative1. You determine your mission, plan the budget, and seek donations
for the mission2. Your organization finds and develops new markets of donors3. You do the strategic thinking and set the goals for yourself4. You carry out your organization’s mission5. Your board is a strategic board with a fundraising role6. Your executive director is the organization leader and fundraiser7. You play a strong leadership role and get others to follow you8. You are more independent with a diversified base of many
different donors
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Strategic Thinking Invents New Categories –
Not Rearranges Old Ones
Formal planning processes—preserve & depend upon ‘old’ established categoriesExtrapolating from the past or copying from others says ‘you are a good student’—not a good leader!Planning—involves a calculating style of management—not a committing styleReal ‘strategists’—get their hands dirty digging for ideasStrategy making is a process that is interwoven with all that it takes to manage an organization.
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Strategic Management
Vision
Mission
DONORS Credibility Goals Objectives Activities Indicators RESULTS
S W O T
Positioning
Strategies
CultureResults for Society Participants Donors
Strategic Thinking Strategic
Planning Strategic Implementation Strategic
Evaluation
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Peter Drucker
1. What is your business?
2. Who is your customer?
3. What does your customer consider value?
4. Non-customers are as important as customers.
5. The customer never buys what the supplier sells.
6. Management that does not innovate will not last.
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Nonprofits Add ValueCompetition produces better results Innovation, harder work, lower costs, better services
Organizations add more revenues50% government, 25% fees, 25% donations, 25% volunteers =
125%They have expertiseMission driven, highly motivated, , professional, specialised,
independent boards for controlThey provide important extrasPublic education, citizen involvement, advocacy, volunteers
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Michael Porter on Strategy
Competitive strategy is about being different.It means deliberately choosing a different set of activities to deliver a unique mix of value.A focussed competitor targets the special needs of a subset of customers and designs its activities accordingly.
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Build Strategic and Competitive Advantage
Flows from identifying key resources & competencesIdentifies obstacles & options to overcomeIdentifies and exploits rivals’ weaknessesLeads to a unique ‘value added’Develops key resources & competencesInitiates changes in your sector to your advantageCaptures scarce resources (ideas, people…)Anticipates and responds to changes Asks: Why is our performance going as it is? Where will it lead if it continues?
How can we design a new strategy? London Business School
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Competition
Nonprofits like businesses are in competition for funds.The basic successful service strategies are to compete by providingbetter quality lower costa unique and innovative approach.
Donors – and clients - will need to see a ‘value added’ from the nonprofit’s use of their funds.Competition for dominating and ameliorating an issue
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What are the obstacles?
Identify four obstacles for BRCS
Write each one on a card
Collect ideas in groups
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What’s going right?
Identify four things going well
Write each one on a card
Collect ideas in groups
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Why Are Organizations Not Raising More Money?
1. Unproven Results to Participants
2. Questions of Trust and Reliability
3. Weak Value to Donors
4. Lack of Total Organizational Fundraising
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Lessons about Fundraising
1. Giving is based on trust, confidence and respect.
2. Fundraisers represent the totality of the nonprofit.
3. Giving occurs because of the value the donor receives and her total experience.
4. Donors want to know the difference that their individual gifts actually make.
5. Donors, as well as participants, want to be involved in planning and evaluation.
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Lessons about Evaluation
1. Results that matter are Measured, long-term, sustained impacts.
2. Core management functions are Assess stakeholder needs in planning Design programs with progress indicators Monitor during implementation Assess your own organization Review ethics and standards Learn, document, share and use lessons
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Essentials for Organizations
1. Mission Value • How important is it society?
2. Effectiveness Quality• How big a result is there?
3. Efficiency Price • What is the cost for results?
4. Trustworthiness Ethics • How well does it behave?
5. Transparency Accountability • How involved are constituents?
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Extend Your Appeal To New Donors
Know the donors
Base appeal onValueResultsCostInvolvementTrustworthiness
Current
Donors.
New Donors
New Donors
Donors
Donors
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Know and Meet the Expectations of Donors
Get to know donors better
All staff fundraise and meet donors
Top executives and board members fundraise
Assure fundraising attractiveness of programs
Use the donor’s language
Excellent and timely reporting
Responsive donor service by all
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Donor’s Needs
Objectives
Strategies
Expectations
Emotions
Biases
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Know and Meet the Expectations of Donors
Get to know donors better
All staff fundraise and meet donors
Top executives and board members fundraise
Assure fundraising attractiveness of programs
Use the donor’s language
Excellent and timely reporting
Responsive donor service by all
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Give Value to Donors1) Acknowledge their financial and emotional support
2) Ask them what they value in their relationship
3) Involve them (really, virtually, media, other ways)
4) Give them influence within the organization
5) Use individualized marketing to respond to them
6) Provide customized programs to meet their needs
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Why Have Standards?
Shared values and common direction
Public responsibility
Donor trust
Prevention
Improvement
Defense Everything needs to be verified!
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Crisis of Confidence for Nonprofits
Program Impact on Participants Fundraising Impact on Donors Ethics Trustworthiness Commitment Fundraising Effort
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Key Elements of Public Accountability
1. Transparency and accountability to donors and others2. Truthful fundraising appeals 3. Use of funds according to donor expectations4. Sound financial management and accurate reports5. Measured program effectiveness 6. Informed & independent Board, no conflict of interest7. Adherence to best practices in all aspects of work8. Complete, accurate and timely reports
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Iron Rules of Fundraising (1-5)
1. Fundraising is not about money
2. There are only internal barriers to fundraising
3. Determine and promote your uniqueness
4. Compete through innovation, price and quality
5. Assure basic systems are in place
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Iron Rules of Fundraising (5-10)
6. Donors give because of value they receive
7. Meet the needs and expectations of donors
8. Develop relationships with donors
9. Solve their problems, not yours
10. Learn to love the word “No”
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Fundraising Rules at Latvian Children’s Fund
Work hard for fundraising
Maintain good contacts with donors
Have concrete projects
Produce good results
Maintain low costs
Account carefully for funds
Send good reports to the donors
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Total Organizational Fundraising©
Six step approach to the core capabilities of an organization for effective fundraising
1. Fundamental Principles of Fundraising
2. Internal Culture of Fundraising
3. Strategic Planning, Positioning and Fundraising
4. Organizational Ethics and Standards
5. Strategic Evaluation for Learning
6. Involvement and Accountability for Donors
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Capacity Building
It encompasses organisational capabilities to:
Assure a well-run and respected institution
Plan and improve programs
Recruit, manage and reward people
Raise financial/volunteer/material resources
Understand, reach and motivate others
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Be a well-run and respected institution
Mission
Strategic positioning
Branding
Values and culture
Governance
Management
Planning
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Plan, implement and improve programs
Design
Indicators
Involve
Implement
Monitor
Evaluate
Learn
Need
Scope
Long term impact
Consequences
Replicability
Sustainability
Science
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Recruit, manage and reward people
Leading
Managing
Culture
Strengthening
Changing
Learning
Board
Management
Staff
Volunteers
Participants
Lessons
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Raise financial, volunteer and material resources
Culture
Strategic Planning
Training
Implementation
Managing
Money
Time
Material
Endorsement
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Understand, reach and motivate the others
Collect data constantly to give insight
Get outside yourself to see your organisation
Identify new partners and groups to involve
Develop strategies for mutual involvement
Change to know and meet their needs
Consider non-donors as donors
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How to Take Control of the Environment
Get out of your self and your own limitationsPut yourself in other people’s position
Keep your eyes open to observeSee the body language
Listen to learnHear what is not being said
Develop your antennaUnderstand the intangibles
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New NGO StructureResource Participants / Stakeholders
Funding, involvement, decision making, evaluating, control
Board of DirectorsFiduciary/legal, Policymaking, Select staff directorFundraising
Chief Executive OfficerPlanning and Management – Participatory MannerInfluence and Implement board decisions – ResultsFinal decision maker – Hard Choices
StaffProgram, fundraising, finance, etcInfluence and Implement executive director decisions
Program ParticipantsProgram, involvement, decision making, evaluating, control
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West Broadway Neighborhood Association
Year 1992 1993
Culture negative positive
Planning ad hoc 3 year strategic plan
Participation limited open / extensive
Activities complaining many / results focus
Influence little significant
Members 25 200
Revenues $3,000 $200,000
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Life Cycle of an Organization
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Why Is Evaluation a Problem?
1. Everyone is afraid of evaluation. 2. Evaluation costs money.3. Evaluation is often very difficult. 4. There are new and confusing disciplines. 5. People confuse different approaches in evaluation. 6. The approach to evaluation is not well planned. 7. The results of evaluation are not well used. 8. Nonprofits lack a culture of learning. 9. You can lose your job from a bad evaluation.
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Significance of Strategic Evaluation
Significance of Evaluation for Capacity Building
mission programs strategic evaluation learning capacity building
better achieved mission better fundraising
Significance of Evaluation for Grants
grant design indicators implementation
M & E evaluation donor satisfaction
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Management Role in Strategic Evaluation
1. Create a culture of openness and learning2. Open diverse feedback channels3. Assure clarity of purpose of all evaluations4. Require lessons learned summary in all reports5. Review a consolidation of lessons learned6. Incorporate lessons learned in all new planning7. Create internal and external learning groups8. Conduct program audits like financial audits9. Promote contributors to and users of lessons
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Board Role inStrategic Evaluation
1. Set evaluation and learning as a board priority
2. Clarify a policy for evaluation and learning
3. Require evaluation measurements in all plans
4. Provide adequate annual funding for evaluation
5. Include evaluation in the executive director’s review
6. Walk around on your own and talk to beneficiaries
7. Take time to reflect at a Lessons Applied Retreat
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Fundraiser Role in Strategic Evaluation
1. Bring donors’ perspectives to all discussions2. Press for accountability and transparency3. Develop a code of ethics for your organization4. Research what donors like and don’t like5. Plan strategically with stakeholder analysis6. Determine value added and strategic positioning7. Help shape organizational purpose and program8. Demand evaluations with lessons learned9. Advocate organizational fundraising culture
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ResultsDonors Organization BeneficiariesMoney Value added Life Changes Activities Inputs Processes Outputs Outcomes Results indicators
Source: USAID
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The Actors
Program Results
Finance / Administration
Fundraising
Staff Board
CEO
Managers $
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Learning to Change Depends on Evaluation
Information Understanding Motivation Plans Commitments Actions Changes Follow up
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ICrisesPressing problemsDeadline driven projectsMeetings, preparations
IIPreparationPreventionValues clarificationPlanning Relationship building
IIIInterruptions, some phone calls, mail, reports, meetingsMany proximate pressing mattersMany popular activities
IVTriviaBusy workPhone callsTime wastersEscape activities
Importantand Not Urgent
Urgentand Important
Not UrgentNot important
Not Important But Urgent
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Five Steps to Getting Unstuck
1. Break out of inertia – do something today.2. Bring in a third-party “enforcer” – a friend or
executive coach – to keep you moving.3. Don’t worry about rejection; just realize you’ll get
plenty of it.4. Seek criticism from people with no stake in your job.5. Try “storylining” or similar exercise to uncover the
activities and surroundings that motivate you.Adapted from Fortune, August 19 1998
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Evaluate Your WeekWhich goals did I achieve?
What empowered me to accomplish these goals?What challenges did I encounter?How did I overcome them?Was achieving these goals the best use of my time?Did my focus on these goals blind me to others?
Which goals did I not achieve?What kept me from accomplishing these goals?What unmet goals should be carried forward?How much of my time was spent in Quadrants II & I?What can I learn from the week as a whole
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Peter Senge: Learning is a journey.
1. Personal Mastery – Seeing reality as it really is2. Shared Vision – Aiming high, compelling dream,
energetic harmony, exhilarating motivation3. Mental Models – Removing internal restrictions4. Team Learning – Synergy from the group, dialogue not
discussion, accessing each other, using a facilitator, innovative approaches
5. Systems Thinking – The whole pictureThe Fifth Discipline: The Art and Practice of The Learning Organization (1994)
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Learning Systems Individual LearningPersonal motivation and performancePersonal assessment and change
Knowledge ManagementNew knowledge, tools, strategies and policiesMechanisms to capture, share and use knowledge
Learning OrganizationFocus on Individual and team thinking processesMoving from data to knowledge to wisdomTransformation from new knowledge
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Pick the BIG issuesWork on them RIGHT
Issue Small BIGApproach
Wrong no gain disaster
RIGHT little gain YES!
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Interviews as Assessment
Interviews withStaff involvedBoard members Interested outsiders
Ask the same 10 basic questions (image, effectiveness, barriers, opportunities, etc.)
Confidential basis
Report as basis of plans and recommendations
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Benchmarking
Track how your top 3-5 competitors workProgram activities and resultsOverhead costsFundraising growthFundraising methods
Get data from their public reportsBecome a donor to see how they treat youTrack them regularlyIdentify what they do well and how they do itUse the information to set your own improvements
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Leadership
Showing vision
Getting commitment
Delegating
Communicating
Fostering change
Supporting others
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Leadership Potential
Key among leadership capacities are the ability toDevelop self-awarenessIncrease self-confidenceTake a broad, systemic viewThink creativelyLearn from experience
Center for Creative Leadership
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What Do Leaders Really Do?
Leaders deal with changePrepare organizations for changeDrive the changeHelp people in the organization cope, struggle
through it, and prepare for the next phase…of change.
The more the change, the more you need strong leadership
Promote planned instability
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ChangeChange is taking place whether we like it or not. The only choice we have is to actively shape it or to passively endure it.
If we choose to be passive, the future will punish us.
Alex Krauer, Chairman, Novartis
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What Do Managers Really Do?
Mangers deal with getting things doneCope with complexityBring order and consistency to key functionsStrategic planning for growth and qualitySystems to support people & processesProgram development and implementation
Promote planned stability
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The How Is DifferentManagement
Planning/budgetingSetting targets/goalsEstablishing detailed stepsAllocating resourcesCreating structuresOrganizing/staffingInformingDelegatingMonitoringControlling
LeadershipSetting a directionCreating future visionDefining strategies to achieve visionAligning people & visionMotivating/inspiringKeeping people moving in the right direction despite obstaclesAppealing to human needs, values, emotions
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In Pursuit of Excellence
Bias toward action
Close to the customer
Entrepreneurship
Tolerance of failure
Quick feedback Tom Peters
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Basics of Team Work
Communicate
Co-ordinate
Share
Be open and ready to adapt new skills
Strengthen capacities and structures
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Effective Communications
Share important information rapidly
Don’t be a bottleneck
Be open and transparent and caring
Give and take feedback constructively
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The Importance of Boards
Governance
Accountability
Representation
Programme Effectiveness
Financial Efficiency
Adequate Resources
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How to Manage Your Board
1. Educate Your Board about Its Responsibilities
2. Give Your Board Real Work
3. Set Policies and Practices for Board Work
4. Engage Board Members in Fundraising
5. Get the Right People on the Board
6. Change the Board to Achieve the Vision
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Role of the Chair
Assures the Board functions well
Chairs Board meetings
Represents the organisation
Focuses the staff director on key priorities
Leads the evaluation of staff director
Strengthens the Board
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Role of All Board Members
Participate in Board decisions
Provide expertise as needed
Focus on governance, not management
Support the organisation personally
Participate in work of Board committees
Help raise money or make contacts
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Approaches to Board Development
Make it part of the organisation capacity buildingStrengthen staff, Board, program, finance, etc.Code of conduct for Board, staff and volunteers
Define skills and resources needed on the BoardSelf-assessment process and analysisWeekend retreat
Create systems for strengthening the BoardNominations Committee of the BoardLimited terms of office (3 year term, maximum 12 years)
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Key Indicators
Executives committed to fundraising
Board committed to fundraising
Organisational fundraising culture
Good systems in place
Programs have impact
Fundraising is managed
Networking is valued
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Good Basic Systems in Place
Management level
Board level
Financial level
Reporting
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Secretary General Committed to Fundraising
Significant time allocated
to fundraising (50%)
Personal activities
with top donors
Fundraising high on agendas
Assures fundraising
is successful or else…
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Board Committed to Fundraising
Contacts and prestige
Budget support
Active fundraising committee
Individual board member
fundraising activity
Fundraising high on agendas
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An Organisational Fundraising Culture
Fundraising as a priority
Everyone fundraises
Know and meet the
needs of donors
Fundraising in everyone’s
job description …
and evaluation
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GovernanceBusiness, government, international members Responsibilities of board, officers, committeesManagement, programme, fundraisingOngoing strengtheningQualificationsManagement/finance expertsFundraising/marketing expertsProgramme expertsContactsWork
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Management
Involving people and sharing information
Changing activities to achieve objectives
Finding ways around barriers
Getting the board to work
Supporting staff
Bias for action
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Fundraising
Understanding current and potential sources of funding
Getting everyone else involved
Finding new approaches
Moving quickly
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Essential Predictors of RD Success
The Chair of the BoardCompetentCommitted
The Chief ExecutiveCompetentCommitted
The Fundraising DirectorCompetentEnthusiastic
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Organization Futures LLC
Consultancy to help organizations assure their futureAnalytic Studies to determine needs and actionConsulting in Strategic PlanningTeam, Management and Board DevelopmentFundraising and Skills Training Workshops
Ken Phillips, Fundraising and Capacity Building Rebecca Stiles Phillips, Management and Leadership Organization Futures LLC 32 Wykeham Road, Washington, CT 06793 USA Tel +1 860 868 9260 Fax +1 860 868 9261 Email NGOFUTURES@aol.com www.OrganizationFutures.com