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Integrated Strategic Financial Planning (ISFP)

Integrated Strategic Financial Planning (ISFP). ISFP - what?. New concept Recognition of the need to analyze the financial viability of implementing a strategic plan Logical continuum of Strategic Planning process to determine resources needed to implement Strategic Plan. ISFP - why?.

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Integrated Strategic Financial Planning (ISFP)

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  1. Integrated StrategicFinancial Planning (ISFP)

  2. ISFP - what? • New concept • Recognition of the need to analyze the financial viability of implementing a strategic plan • Logical continuum of Strategic Planning process to determine resources needed to implement Strategic Plan

  3. ISFP - why? • Because developed at conceptual level, SP has one inherent weakness: it does not account for the organization available resources or the ability to obtain new resources

  4. ISFP Strategic Planning: • How we plan to work in 3 to 5 years • Goals ->Objectives -> Strategies -> Activities ISFP: • Activities are prioritized • Implementation costs are estimated • Compared to resources available

  5. ISFP - results after process Organization will have developed a tool : • Serves as reality check • Basis for developing annual operations plans • Basis for establishing quantifiable fund-raising goals • Basis for priorities for upcoming years • Basis for measuring organization’s success

  6. ISFP - results after process Some Organizations will find the need to adjust expectations to reality: • Revisiting/revising Strategic Plan • Re-prioritizing activities • Eliminating certain activities • Postponing other activities • Developing aggressive fund-raising plan

  7. ISFP - results after process Managers will have clear idea : • which strategic objectives are the most important and possible with available resources • which strategic objectives are beyond scope of short term action

  8. ISFP • Imperative that organization becomes aware of its needs, abilities and resources to make informed decisions on the best course of future action

  9. ISFP - definition Strategic Planning: • Set of concepts, procedures and tools designed to help an organization think and act strategically through consensus building process • Disciplined effort to produce fundamental decisions and actions that shape what an organization is, guide what it does, demonstrate why and how it does them

  10. ISFP - definition Strategic Plan: • Defines the organization’s purpose • Establish realistic goals and objectives consistent with mission and vision • Identifies the implementation capacity • Focused on future • Adaptation to changes in environment • Increases chances of access to national and international donors

  11. ISFP - not a budget! Key Differences Between a Budget and a Financial Plan • Factor Budget ISFP • Time Frame Annual Medium-term (One year) (Three to five years) • Application Monitor & evaluate Projects future financial current financial situation situation Medium-term planning tool • Degree of Detail Detailed and precise General, projected estimates; Subject to greater uncertainty • Variability Not subject to change Constantly modified to once approved include organization’s most recent changes

  12. ISFP - 9 basic steps

  13. ISFP - step 1: Planning to plan • Educating participants & decision makers • Define issues influencing move forward • At what pace • Who will be included - Facilitator • Who participates - assign responsibilities • Method - time-table - follow-up • Involvement of Board of Directors - ownership • Funding of the process

  14. ISFP - step 2: Review strategic plan • Review mission statement • Review internal/external environments-SWOT • Review program areas • Review goals • Review objectives - SMART • Review or development of activities • More accurate SP  more accurate ISFP

  15. ISFP - step 3: Establishing organizational priorities • High priority: if not completed, objectives not fulfilling mission. To be completed • Medium priority: contribute greatly to comply with objectives. Ideal scenario: to be completed at same degree as high priority • Low priority: not essential, but useful - if funding exists • Who prioritizes?

  16. ISFP - step 4: Estimating costs of activities • Essential - very soul of ISFP • Activities currently implemented • Activities carried out in the past • Activities never implemented • Who estimates?

  17. ISFP - step 5: Estimating admin. costs • All necessary expenses for organization to function, regardless number or type of projects • Fixed, indirect, overhead, operating • Greater projects, less % admin costs • Confusion with donors • Who estimates?

  18. ISFP - step 6: Projecting income • Establish list of potential income • Assign % of probability by category % Secured Income Category 100 Project approved/contract signed 90 Project approved/contract not signed 75 Proposal presented/donor has indicated interest 50 Proposal being prepared/donor has indicated interest 25 Project in initial discussion stage with donor 0 No donors identified or limited probability • Greater projects, less % admin costs • Confusion with donors • Who estimates?

  19. ISFP - step 7: Projecting income and expense by area • Summary of information from 4 to 6 • Compare total cost by programme area with projected actual and funding for each programme area • Gives clear picture of needs or surplus of funding - only 90% = secure • Gives clear picture of fund-raising focus • Who projects?

  20. ISFP - step 8: Developing scenarios • Assistance to decision making through 3 scenarios: • Modest case: high priority + admin costs= absolute minimum to fulfill mission. Difference = essential financial goal • Moderate case: high & mediumpriority + admin costs. Difference= short to medium term fund-raising goal • Optimal case: all SP - medium term • Who develops?

  21. ISFP - step 9/1: Evaluating feasibility of SP • Analysis of 8 --> determine implementation of SP feasible or not • You know: • Essential objectives and activities • Funding needed to reach goals & objectives • Funding needed for admin costs • Amount of secured funding by programme area • Funding needs for essential activities and administration cost

  22. ISFP - step 9/2: Evaluating feasibility of SP • Does the organization have financial capacity or fund-raising expertise to attain at least 70% of SP’s results? • Does the organization have capacity capacity to raise funds for subsequent years ? • IF YES ----> OK!!!! • IF NO -----> ANALYZE RESULTS!!!

  23. ISFP - step 9/3: Evaluating feasibility of SP • Analyze funding gaps or surplus implications • Analyze fund-raising experience and expertise --> affects ability to implement SP • Strong vs little fund-raising track record • Strong vs weak donor base • Huge vs small needs • Enough vs not enough staff • EMERGENCY FUND-RAISING IMPOPULAR !!! • Evaluate need to revisit plan

  24. ISFP - will assist NSO to: • Articulate organizational goals, objectives and activities • Prioritize activities detailed in the SP • Identify cost of implementing SP • Estimate its annual administrative costs • Identify potential fund-raising gaps / surplus • Identify potential fund-raising goals • Determine the need to revisit existing SP • Validate feasibility of implementing SP • Monitor, evaluate and adjust SP

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