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Oct 23, 2012

Ohio nonprofit taps all the tools of Linking Mission to Money

There are many strategically focused nonprofits but seldom do I find an example of a nonprofit that has tapped all the tools of strategic restructuring through Linking Mission to Money. In the course of four years the Columbus AIDS Task Force and its current incarnation, AIDS Resource Center Ohio, has:

  1. •    Cut back strategically without compromising mission
  2. •    Re-evaluated the changes in community need for its services over the past decade
  3. •    Identified and adopted new service models
  4. •    Embraced social entrepreneurship to create new profitable enterprises to support core mission services no longer adequately funded by government contracts and fundraising.

Its story is informative to everyone interested in sustaining the nonprofit sector.

  1. In 2008 I was contacted by the Columbus AIDS Task Force.  It was in the midst of a financial crisis, uncertain if it could meet payroll.  They needed to make significant budget cuts, but they made certain that every cut was evaluated in the context of whether it supported or impeded the mission of the organization.
  2. Within a few months they conducted an all-day retreat to examine their service model and how the client base and service needs for AIDS prevention and treatment had changed since their founding in the early 1980s.  They discovered that a disconnect had emerged over the years and identified a process to reprioritize programs to better fit with current needs.
  3. At the same time, they began to look at other service models around the country and began conversations with  a Dayton-based AIDS service organization that had successfully merged over the years with other AIDS organizations elsewhere in Ohio.  In 2011 they announced the creation of the AIDS Resource Center Ohio, serving 62 counties in Ohio through offices in Columbus, Dayton, Lima, Mansfield, Toledo, Athens, Chillicothe, and Newark.  Not only did the merger provide economies in back office services, it enhanced the capacity to coordinate services and to boost the effectiveness of policy and advocacy work in the state capital.  The new organization then merged with the Ohio AIDS Coalition to encompass client and provider education statewide.
  4. They acknowledged that sustainable nonprofits now have to have some lines of business that are profitable.  Looking around the country they once again found a nonprofit in Wisconsin that opened a for-profit pharmacy, which earned a net profit of $2 million in its first year, all reinvested to cover the losses of its core mission services.  With this idea, they did the right thing:  they acquired funding to support development and due diligence of a detailed business plan.  In contrast, in my recent survey of Ohio nonprofits, I found that one-fourth of the respondents who were looking to expand profit-making services were not developing a business plan in order to validate the feasibility of the expansion.   This level of due diligence enabled them to obtain bank financing for the pharmacy design and scope that they believed was most likely to be successful.  Their pharmacy opened in September 2012.

My book Linking Mission to Money , with the Linking Mission to Money grid, provides a structure and discipline to ensure that strategy remains focused o mission and that individual decisions on where to provide service, for which clientele, and at what price are based on the degree of mission focus.  I would be happy to talk with your group to show how this approach can help nonprofits to thrive in the current environment.  If you are ready to develop a strategy for sustainability, let me lead you through a retreat to develop the insight and make the decisions that will guide you on the path to success.