What are these strategies?
- As an organization, Room to Read believes that World Change Starts with Educated Children.® We envision a world in which all children can pursue a quality education that prepares them to be fulfilled and make positive change — in their families, communities and the world.
- Our work and any strategy or policy that comes from the organization is founded in the need to track to our mission. So, when it comes to growing revenue, the focus comes back to the mission and doing so correctly. Revenue growth is incredibly important, but as a mission-based organization, it was important that the support we received (grants, restricted funding, etc) were aligned with our expertise and our goals.
- In 2014, Room to Read had achieved roughly $40MM in revenue and was on track to reach 10 million children. We operated directly in 10 countries in Asia and Africa. We had an ever increasingly complex global structure with 25 legal entities and 19 currencies, and we had growth on our minds. However, to continue growing, we needed to implement strategies that would allow us to do so efficiently and effectively, solving for current challenges and opening up a breadth of new opportunities. In order to accommodate growth, we:
- Launched a Five-Year Strategic Plan:
- Organizations should understand why they want to grow revenue, what additional funds will do for your business, how it will change things for the better or worse. This should be laid out clearly and visible, in a plan that can be implemented successfully.
- Room to Read’s management team embarked on a five-year strategic plan to map out the organization’s growth plan through 2020. While we were proud of our numbers, we were also unsatisfied given 250MM children around the world still lacking basic reading, writing skills and girls remaining much less likely to complete secondary school than boys. It was clear, our programs were in great demand and so we created a focused strategy to reach at least 5 million more children.
- Seized the Opportunity:
- In a mission-driven organization, being poised for the future is always an asset and that includes revenue growth. Room to Read’s management team saw an opportunity to scale our efforts by streamlining our programmatic content across the globe, test out technical assistance and capacity building models to better leverage our work through other organizations and government ministries, and diversify our revenue across new donor streams. In seeing this opportunity, we then worked out what it would mean to make this a reality. To accomplish this, Room to Read would need to invest in our core business to achieve increased efficiency and greater effectiveness.
- An organization should never be afraid to find an opportunity and grab it or are Room to Read calls it, a Big Hair Audacious Goal. However, the focus is not on the goal but in the steps to achieve it. A goal or a new opportunity should co-exist with a plan to attain it. It should be a plan that stretches you, perhaps gives you a sleepless night, but it should be a concrete plan with steps that you can implement and institutionalize.
- Invested in What’s Around Is:
- Integral to the success of any scale-up strategy is an investment in the platforms that will make it a reality. That means your employees, your processes, and your ability to sustainably grow. Room to Read’s management team prioritized investment in the financial management infrastructure. After a period of rapid expansion and program evolution, our growing organizational complexity required a much more robust infrastructure to maximize and measure our impact through program outcomes. We knew that it was imperative to maintain a high level of transparency and accountability to retain and to attract new funding and donor trust. With our focus on program outcomes, the underlying changes in program implementation, as well as growing donor interest and diversity, we determined the need to replace the outdated general ledger, revamp the global accounting practices and streamline the overall financial close in order to deliver more timely insights into project performance.
- Clear Communications:
- You cannot grow revenue if your team is not invested in the growth. People are curious they want to know the how, the why, the when, and the who. So as a leadership team, it is crucial that the time is taken to properly explain plans for growth and ensure that everyone understands what that means in relation to their work and their role in the organization. Room to Read held many office chats, All Hands meeting, we sent emails, we held 1:1s, we spoke with people in all our geographies as we went through our strategic planning to ensure there were consensus and understanding. It meant that when we ready to launch and begin the work that would help us grow rapidly, our team was not only on board but in many areas they had helped finetune the system and felt extremely invested.
How Did You Accomplish Them?
- As CFO, my work centred in creating a more efficient and effective Finance & Accounting team to help make these goals a reality. There’s a myth in some places that the Finance & Accounting team is siloed, churning out spreadsheets and long reports, but at Room to Read the Finance & Accounting team was a strategic advisor and constant partner in all aspects of our five-year strategic plan and goal for increased revenue.
- Cross Collaboration:
- No man is an island. Neither is any goal. For Room to Read to grow our revenue and our impact, we needed heightened transparency and visibility into our data. We need instant access into the records of any geography and any region at any time of the day and we needed to be able to create complex revenue models, forecast models and budgets. To make this a reality, we had to invest in our technology infrastructure.
- Working across the organization, with departments in a variety of geographies, we determine what we needed from our new platform and dove deeply into an analysis of the technology available to us. While this technology would mainly be used by the Finance & Accounting team, it needed to work for all of Room to Read. Efficient processes and platforms for one team will only benefit others.
- After a review process, we determined that we needed to replace Room to Read’s server-based general ledger system (Epicor) with a more robust financial cloud-based financial infrastructure (Sage Intacct) to support the increasing complexities and scale-up opportunities.
- Make it Yours:
- If you want to grow revenue, it’s important to know what works for you in pursuit of the goal and what doesn’t. It is counter-intuitive to try and manipulates systems, talent, policies and procedures that are not aligned with your specific need in growth. In Room to Read’s case, we knew we needed to invest in our technology framework to enable our growth. We also knew that with our complex needs, it would be crucial to get a system that was tailored to our current needs as well as future growth. In working with Sage Intacct, we configured the software to integrate with our other systems (CRM, Program Operations, Budget and HRIS) to monitor key insights on program impact, reach and outcomes, including the number of children benefitted, books checked out, children’s reading fluency and comprehension, girl’s progression through secondary school and the girl’s development of life skills. These data-driven insights will give us the ability to tie our financial information to operational data and help us tell a more informative story about the cost-effectiveness of our programs as well as our program progress over time. The cloud-based system also made it quick and easy to provide meaningful insights to our donors about how our funds are being used – extremely helpful aspect in retaining donors and increasing their level of support.
- Analyze the Impact of Your Changes
- For Room to Read the transition to Sage Intacct eliminated massive Excel spreadsheets and hours of manual, duplicate data entry both at the organization’s headquarters and in field offices around the world. As a result, Sage Intacct dramatically reduced the work needed to close the books in each country, freed up teams for more value-added analysis, and made consolidations across all 25 entities and 19 currencies a much simpler process. All told, Room to Read’s field operations experienced an immediate 25 percent productivity improvement with Sage Intacct – or the equivalent of about $300,000 in annual savings on labor. That decision alone helped increase revenue!
- The global accounting and finance team also achieved impactful productivity improvements of 30 percent, by eliminating much time consuming and inconsistent procedures surrounding its financial close. RtR Accounting and Finance teams can integrate budgets, report actuals against planned budgets and collaborate more efficiently with the development teams. The teams, more importantly, have transformed its organizational role and now spends more time contributing to Room to Read’s philanthropic goals instead of ensuring financial compliance.
- Room to Read also benefits from Sage Intacct’s many best-in-class integrations, including seamless connections with Salesforce for operations data; Adaptive Insights for financial planning; and Nexonia for timekeeping and expense report automation.
- In addition to saving time, Sage Intacct enabled Room to Read to provide more specific information to donors about the projects they are funding. With Epicor, our data structures only allowed us to look at average costs across all 7,000 donor-funded libraries, making it a challenge to drill down to minute data details that some donors requested. However, with our switch, we had the ability to go macro and micro in the data with ease. More so, the process was much more efficient, allowing us to meet (and beat) deadline with confidence and provide more strategic insights when creating donor proposals and reports.
- After three years, the global return on investment for our global ledger implementation was calculated at 402%. This increased ability of reporting has helped Room to Read attract an additional $18MM in bilateral and multilateral funding. With its larger resource pool, Room to Read estimates that we have reached over 100,000 additional children worldwide through its primary and secondary education programs.
Are these strategies insightful and useful to others?
- Nonprofits are strapped for time and money. These strategies bring an experienced lens to important aspects in a nonprofit’s existence like finance, accounting, technology investments and implementations. These strategies create a path for leaders of all experience levels and industries to follow and better support their organization.
- Room to Read’s specific strategy is useful for other nonprofits and NGOs as through our example, they can implement measures that will increase donor confidence and provide more specific and timely reporting. In Room to Read’s case, this boosted our credibility and accountability as an organization and opened the door for increased funding from a variety of entities.
- Internally, if CFO’s or leaders are struggling with the function of the Finance & Accounting besides the usual, Room to Read’s example, creates a model that allows the F&A team to be trusted advisors, collaborating with members throughout your organization. It will allow them to gain credibility and/or influence within the organization, defined as an essential partner to help all functions across the organization achieve their outcomes.
What supporting examples do you have?
- With this strategy of tailoring our internal infrastructure, Room to Read successful switched to a more robust financial solution.
- This has increased Room to Read’s ability to scale in different geographies and contexts and improve productivity over 25%, which translates to around $300,000 in annual savings on labor. Since making the strategic plan in 2014 and aiming to reach 15 million children by 2020, we’ve sailed past that goal, reaching 16.8 million children at the end of 2018.
- Room to Read has won its thirteenth Charity Navigator 4-Star Rating and is one of the very few nonprofits who have a revenue of over $50 million.
- Room to Read won a Nucleus ROI Award 2019 for the implementation strategy siting significant direct and indirect cost improvements and enhanced value creation by the Accounting and Finance team.
What are other organizations doing that is similar?
- Another nonprofit, DonorsChoose, which is an online charity that makes it easy for anyone to help students in need, have also experienced significant growth and needed a financial management solution that could replace its old accounting system. They also wanted to implement new solutions for fundraising, customer support and donor reporting, among other functions.
- They have also implemented Sage Intacct which allowed them to save over 50 hours of manual work each month, while also generating new insights that help to heighten the company’s impact on U.S. education. By allowing more seamless connection to other platforms, Sage Intacct has allowed DonorsChoose to keep a high rating on Charity Navigator, and other websites that prospective donors examine, encouraging additional funding.