A Non-Profit Profits From Business Architecture

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Chief Story Teller, TopSigma
Dr. Raj Ramesh runs a consulting firm, TopSigma Consulting, that specializes In the business architecture and business process management domains. He has over two decades of experience working with Fortune 500 companies in the Financial and Insurance space. In addition to these disciplines, he is an expert in communicating concepts visually, an approach that has helped executives clearly understand the value and benefits of Business Architecture. Dr. Ramesh is a video blogger and his short videos are available at www.topsigma.com

Large companies do not have exclusivity on using the discipline of business architecture. Smaller companies and non-profits can derive tremendous value by leveraging the discipline.

Like many other states, the funding for schools in Illinois has been on the decline.  A concerned group of local citizens in one town wanted to do something about it. They started a non-profit Foundation with the goal of raising funds from the local community; funds that will be used to supplement the loss of revenue from the state.

A major strength of this Foundation is the high degree of enthusiasm amongst its members.  There is no dearth of ideas on how to raise funds and how to spend it.  Proposals for fund raising range from holding bake sales to getting corporate sponsorships.  Likewise, proposals for spending those funds range from educational excursions for students, to buying equipment for the school.

An abundance of ideas coupled with an abundance of enthusiasm, while on the surface may appear to be a powerful combination, leads to a hap hazard approach to raising and distributing funds.  Some members of the Foundation reach out to the community on their own initiative, to collect money. While these activities are commendable, it also introduces many challenges.  For instance, one local company received multiple requests from the same Foundation, which lowers the credibility, in spite of the fine work being done.

Business architecture to the rescue. We are working with this Foundation to help the leadership get a better understanding of the strategy and structure, resulting in better alignment with the execution.  In this article, we highlight key approaches that will increase the effectiveness of the Foundation in achieving their goals.

Clarity of the Business Model

Our first task was to help leadership of the Foundation clarify and agree upon their business model. Among the many types of funding sources, we identified three major categories, which are, (1) local companies, (2) relatively well-to-do citizens of the community, and (3) parents who have children in the local schools.  While there is some commonality, each category also calls for some distinctly different approaches in building relationships and managing operations. 

Michael Porter, a guru of Business Strategy says, “Strategy is about making choices…”  We had to make a choice. Which category of donors should we focus on?  That choice will determine what we do (or not do) and how we do it. 

A similar strategic choice around the types of projects we’d fund needs to be made, but we will not discuss that further in this article.

Each choice has advantages and disadvantages.  We decided that parents who had children in the local schools would be our main funding source.

Having made that choice, here’s some context on the environment:

  • Our donors are from a wide range of the economic scale. Therefore we should accommodate receiving anywhere from $1 upwards.
  • Our donors have a strong emotional connection to such giving.  Therefore we need to “show them” where their money goes.
  • We know exactly who the potential donors are. Therefore our marketing reach is relatively easier.

Leveraging Business Architecture

Next we need to identify our donor’s needs and design the Foundation’s operations to meet those needs.  That’s the essence of business architecture.  

The Foundation’s leadership comes from many backgrounds. While we want them to grasp the value business architecture brings, we do not expect them to understand or learn the discipline. The artifacts we create should tell easily understandable stories and be used as a basis for the leadership to take action.

For example, the meta-model that illustrates the relationships between the services we provide to our donors and the business processes that deliver those services are irrelevant to them. Rather, a story around a donor sending in a check for $1000 is a much more powerful illustration around which business decisions can be made. While business architecture provides the complete picture of how elements of the organization are connected, the Foundation leadership seeks to understand specific problems, their impacts and how to solve them.

Here’s an example. Our donors can contribute any amount from $1 upwards. We need to be able to (1) thank each donor individually for the contribution, (2) mail a confirmation for tax purposes, and (3) continue to strengthen the relationship with the donor.  Expanding further on #2 above, to reduce operating costs, we email thank you notes, unless the amount is over $500 dollars.  For those, in addition to the email, a board member will call the donor to thank him or her personally.

With scenario walkthroughs the leadership understands how the thank you note is handled. Artifacts such as sample thank you notes and simulated phone conversation scripts increase understanding.  Behind the scenes, the scenarios are modeled in process maps. For each step in the process, leadership understands the requirements, such as the need to get the donor’s email address if we are sending emails. We also identify metrics such as “how quickly do we send the thank you note.” If the donor receives a thank you note immediately, she clearly sees it as an automated response with no human touch. So waiting for a day to two before sending that response helps to reduce the cost and enhances the donor experience.

Business architecture has a direct and powerful influence on how the Foundation functions, because we can work with the decision makers, a luxury not always available in larger enterprises.  The journey has just started, and as we build out the business architecture further, we hope that it provides us an opportunity to explore challenges faced by the Foundation to adapt accordingly and to bring the Foundation leadership along in that journey of achieving the organizational goals.

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