Adding a New Nonprofit Program

     Happy New Year! You may be launching a new program or initiative this month that's both exciting and scary. Today's post is packed with practical financial considerations that will help you make your new endeavor a success. 

     So, the idea is on the table. There's a new program, a new or expanded mission, a endeavor that you're wanting to take on to fulfill your nonprofit’s mission. Well, where do you start? what practical steps can you take to make sure you launch this new program effectively? 

Start with the Mission Funnel

     Your nonprofit has a mission and a purpose that's defined in all of your founding documents, like your Articles of Incorporation, your bylaws, and your IRS Form 1023 that you filed to get your nonprofit status. This documented mission serves as a funnel that guides your nonprofit’s existence. This mission funnel helps filter new ideas, limiting them to only the ones that really fit and suit what you're created to do. See, there’s something called “mission creep.” It illustrates the tendency  of those whose business is serving others to constantly think of new or different ways to do so. Sometimes, those ideas are great ideas, just not your nonprofit's purpose. Sometimes, there are gaps in service and you may need to find a partner who wants to meet that need or another organization already in existence that you could share the idea and collaborate with to help make it a reality. So, that very first step is to run your idea through your mission funnel. Does it make it through the funnel or is it a creep that you should not take on yourself? 

Create a Program Budget

      Next, count the cost. The cost of a new program may vary based on the program size. Obviously, serving 10 people will cost less than serving 200 people. Calculate the best and worst case scenarios for your budget. If we have 10 people participate, then _____, but if we have 200 people participate, then ______.  Alternatively, you might say, “Based on the resources we can give, we can only have a program that serves 25 people.”

     While counting the cost of the actual program is important, don't forget another element that’s often overlooked- the cost of staffing. You might say, “We have a salaried individual who will now oversee this in addition to another program.” Well, there's definitely a cost to that. The cost is potentially fatigue or overwhelm or the other program suffering. So don't forget that the true staffing cost of the new program is not necessarily quantifiable, but still worth keeping an eye on. 

     Even hourly staff costs can be easily overlooked when starting new programs. One example is police or security guards. If your organization has a policy or practice of operating your actual events and programs with security inside or outside of the building, then you may need to factor the hourly cost  for additional security coverage into your budget. Likewise for  audio/visual/lighting or the technical support that happens when you do something inside of your facility. All of these costs need to be included in your budget. 

Do a Risk Assessment

     Next, you’ll want to look at a risk assessment. You need to know, does this new endeavor subject your nonprofit to an additional or an extraordinary risk? I like to this of it like this: What could happen that would put us on the front page of the newspaper? Well, those are risks, and we want to make an assessment of those risks. We want to make sure that we have mitigated them wherever possible, and that we've also insured ourselves correctly. So sometimes a new program means a new level of insurance. Now is the time to determine and plan for these risks.

Determine the Opportunity Cost

     The opportunity cost of a new program means that the energy and effort you're spending there can't be spent somewhere else. Or alternatively, the energy and effort you've been spending on something that's effective will get diverted to this new program. It may mean the program that's been succeeding no longer succeeds or doesn't succeed at the same level. So we really want to think about the opportunity cost for that to say, “Is this something we have such a desire to do that we need to pull back on something else?”  This may be a great time to stop doing that thing that you’ve been doing for 20 years that you just keep doing because you’ve always done it. Maybe it's time to stop doing that if it's not effective, so you can step into this new opportunity. 

Engage the Wisdom of Your Board

     Your board has fiduciary duty and they also have an incredible responsibility to make sure that the nonprofit is fulfilling its mission. They don't operate the nonprofit. They don't tell you what to do. They don't direct the day-to-day. But they are responsible for knowing that you fulfilled your purpose. So a program change and adjustment in your mission direction (or how it's expressed) are critical decisions that you want your board to officially know. Take time to discuss and to ultimately make an actionable and documented vote to make this new idea a reality. 

Test Your Program First

     Finally, launch your new program with the idea that this is a test or a a pilot program. Then set an evaluation date when you're going to come back and thoroughly evaluate. Did it fulfill your mission? Was the cost appropriate? Did you handle all the other items mentioned above? Should you continue to do this? See, it's much easier to pilot something and then recognize that it was the wrong thing or the wrong time than it is to stop something that you've been doing forever. 

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