|Jan Allen, CNM consultant|
I just came across this article that I wrote in 2002 for the San Diego Business Journal. It sounded eerily familiar and – in an odd way – gave me hope for the future…..With only a few edits….it sounds like…. now….
Most nonprofit organizations are asking themselves the same question right now: How did we get here? The economic downturn continues to play havoc with our finances and our emotions. The reality of market losses, investment failures and disappearing retirement plans are playing a major role in declining funds for most charitable organizations as corporate, foundation and personal contributions are cut…or cut out.
There is no denying that the uncertainties of a roller coaster financial market, investigations into corporate and political wrongdoing and continuous terrorism alerts have us all a little skittish. Year-end projections for many nonprofits are a nightmare, leaving Executive Directors to wonder if next year’s budget would qualify them as novice fiction writers. More importantly, they are facing unavoidable - and drastic - cost reductions, leaving them to face the future with smaller staffs and scaled back programs often insufficient to effectively serve their constituencies. So here are a few suggestions for “battening down the hatches” and navigating the storm:
Don’t panic. Acknowledge that it’s hard, but know that you are not alone. Stay positive and proactive.If you are feeling discouraged, you have lots of company, so channel that energy into more constructive action. Get in touch with peers and counterparts at other organizations to share alternatives and solutions, and keep a focus on what is going well. Check in with associates in the for-profit arena; get a feel for their reactions and attitudes about economic recovery. Stay up to date on financial forecasts and market trends through news websites and financial publications. Knowledge is power. Avoid “woe is me” conversations. They are not productive and keep you feeling victimized. Don’t deny what is - by sticking your head in the sand - but don’t feed it either by fretting about things over which you have no control. Focus on what you can control and what you can change about the circumstances. And that, of course, begins with attitude.
Live in reality. Be clear about your needs and what you are willing to do about them. Stop the blame game and communicate.The Board/staff “blame dance” doesn't work. The important thing now is not how we got here, but what we do about it. Budget cuts and staff cutbacks are never pleasant, but they are sometimes necessary to keep programs in operation and the doors open. As Executive Directors/CEOs of nonprofits, it is more important than ever to provide effective, honest leadership and good communication in these challenging times. Be clear with Board and staff that difficult decisions could be imminent, including the possibility of program and personnel reductions. Consider temporary pay cuts or reduced workweeks first, instead of more final measures.
If Board members have an accurate picture of the financial dilemmas the organization is facing, they may be able to provide additional financial support, as well as in-kind donations and underwriting for specific monthly expenses. Be open to the suggestions from your staff and Board. They may have solutions you haven’t thought of, or were hesitant to suggest. Those you serve may know of opportunities you haven’t even considered. Allow for the possibility that, instead of being the most disastrous plight the organization has faced, the challenges you face could be a way of bringing the organization together, clarifying your mission, re-prioritizing service provision and redefining how you do business in the community.
There is power in the truth. Use the direct approach with your donors.Your donors are already aware of your struggles; they have troubles of their own. The lag in economic recovery continues to dismantle corporate earnings and foundation endowments. In addition, individual donors are reeling from crumbling retirement funds. While many are focused on stopping the bleeding, there is still money to be had…if you have done your research and if you can be clear, concise and compelling in your request. There are actually are “good news” stories of funding provided to community organizations who are making an honest effort to solve their own problems and asking for only what is absolutely vital to program survival.
Get back to basics! Send personal notes with proposals and requests for funds. Use the telephone, not email or direct mail, to update current and previous donors about your challenges. Tell the truth about your situation. Keep in mind that donors are hearing basically the same story from everyone. You must make a case for the fact that you do not need money, but rather your organization is meeting urgent community needs.
Understand that this, too, will pass.Many of us have at least some recollection of the economic recovery of the early ‘90’s, followed by feelings of euphoria during the more prosperous late ‘90’s - which made fund raising seem a bit easier….followed by a stock market decline in 2000….followed by September 11th…...followed by…. Let’s face it - the place we are now is somewhat familiar, if equally unpleasant. The bad news is: the economy is cyclical. The good news is: the economy is cyclical. Yes, there are still uncertainties, but we have choices in how we respond to our present situation. Those choices will certainly create our future. Refuse to get mired in the bad news. Resolve to put your energy toward innovative, constructive solutions. The truth is that there are better days ahead, and the truth is on our side.
Center for Nonprofit Management