Founded in 1987, the Pacific Institute (PI) works to create a healthier planet and sustainable communities. PI conducts interdisciplinary research and partners with stakeholders to produce solutions that advance environmental protection, economic development, and social equity – locally, nationally, and internationally. PI is an effective, efficient, and influential organization – playing a leading role in redefining the critical intersections between water, energy, climate, and national security, and serving as a trusted source of information, innovative solutions, and high-quality communications. A key indicator of PI’s influence is the actual use of its work: the UN cited PI in its 2010 decision to formally declare a “human right to water and sanitation,” the State of California adopted PI’s analyses on water-use efficiency potential in the formal “California Water Plan,” and the State of Florida used the Institute’s work in US Supreme Court filings on interstate water allocations, to name a few.
PI’s capacity to both pursue timely, critical studies and to integrate and communicate its work is hampered by inadequate line-item, project-oriented funding. Though observers regularly note that the Institute “punches far above its weight,” it does so with year-to-year or project-by-project soft funding that is institutionally unsustainable over the long term and most importantly, does not give PI the flexibility to quickly respond to urgent needs as they arise. Consequently, in addition to the traditional project-funding model, PI is seeking to expand its ability to identify and offer fee-for-service or business-related services.
PI asked an ACT team to:
- Evaluate the potential for a successful fee-for-service strategy and a business plan for developing and implementing such a strategy
- Assess the opportunities and challenges for PI to earn income and broaden its funding base by identifying or capitalizing upon a fee-for-service market
It was made clear to PI at the onset of this project that although a business plan would be a necessary element in any implementation of a new market strategy, and the work from this project may well be a contributor, the development of a strategic business plan would be beyond the scope of this project. As the project got underway, the ACT team learned that the PI Board was in the early stages of developing a strategic plan for the organization. Working closely with key staff and Board members, the ACT team convinced PI Board and management that fee-for-service should be considered a tactical element within the overall strategic plan. The team analyzed the organizational and cultural impacts on PI itself as well as researching other similar organizations’ experiences with fee-for-service, then developed alternatives PI should consider, as well as some it should not consider, for inclusion into its strategic planning process for such an implementation.
- Determine through a strategic planning process what PI wants to be in five to seven years, what needs to change to get there, and how fee-for-service fits into that overall plan
- Determine general market size or otherwise determine which clients are most likely to cooperatively engage in that service
- Determine skills and resources needed to deliver those proposed engagements and whether they are currently available and willing, or if you need to partner or hire
- Determine whether the financial and cultural risks are acceptable
- Determine whether leadership has the bandwidth and desire to lead this significant imitative
Fee-for-service is too great a business and cultural diversion from PI’s existing structure to be considered independent of an overall strategic plan for the organization.
Final Report Outline
- Review of project plan
- Review of mid-term discussion
- What the ACT team did and did not do
- What the ACT team heard during its research
- Fee-for-service options
- Fee-for-service organizational considerations