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Smart Moves in Turbulent Times
[And Good Times, Too]
By Michael Washburn
With a relentless stream of unnerving news putting everyone on edge, it's easy to forget that we've survived tough times before. We have. Indeed, the nonprofit sector, which takes brutal blows during periods of economic recession and political turmoil, has proved itself determined, resilient and resourceful.
After more than 30 years of work in this sector, I have distilled the critical elements of a successful strategy, which I've dubbed, "The Four Keys to Prospering." In difficult times, streamlining and retrenching may be necessary. How you do that and where you continue to invest despite cutbacks will determine how quickly you recover and how far you can advance when better times return.
The most vibrant and effective organizations - through thick and thin - continuously evolve, guided by clear-eyed, yet flexible strategies for sustenance and growth. Their leadership always budgets something for capacity building internally and positioning externally. Here are four investments that nearly always return far more than they cost.
Planning. Go back to mission. Engage key staff and board in a review of your strategic plan, if you have completed one in the last three of four years. Look again at the goals, resource allocations, and assumptions about your operating environment that you determined in those very different times. See where they hold up and where they don't.
Good plans (and stable organizations) are rooted in values, organizational history and culture, and core competencies. These are the constants that enable an organization to look at itself deeply and honestly and to make courageous choices. Revisiting your plan in pressured circumstances will quickly restore perspective and revive the collegial spirit in which the plan was developed. The choices and sacrifices hammered out then should guide decision-making today.
If you have not done a strategic plan recently, it's not too late. In fact, basic planning methodology is an excellent way to quickly bring structure to your discussion of options and to build consensus for difficult decisions.
While a full strategic planning effort often unfolds over six to twelve months and can be costly, the steps that are most valuable can be completed in a few hours with a facilitator. They are:
Diversification. Those individuals who have diversified their financial investments are better able to ride out recessions. The same is true for nonprofits. A broad base of individual donors is the key. Too many nonprofits still rely primarily on government, foundation, and corporate support. Funding cutbacks in those sectors are often severe, as they are proving to be this time. Historically, the rebound is slow. Individuals account for 75% of all philanthropy and individual donations tend to fall off less and to return more quickly. During many downturns, individual donations have even accelerated in response to urgent need and compelling appeals.
Shortly after the September 11th attacks, the Giving Institute: Leading Consultants to Non-profits (publisher of the annual Giving USA) and the Center on Philanthropy at Indiana University prepared an analysis of giving in the United States since 1940 to determine the effects of economic downturns, terrorism, war, and political shifts. This 60 year perspective is both encouraging and instructive. "Historically, giving continues to grow during recessions, albeit at a slower rate of growth [5% vs. 7.6%]." Individuals have proven to be the key. Those years when the giving rate slowed have nearly always been followed by a year that beat the historic average, with individual donations often leading the way.
This encouraging pattern is the result of the enormous and creative effort of hundreds of thousands of nonprofit board and staff members.
So, add, renew, and upgrade individual donors. Never reduce these efforts. Focus on building and fortifying your board by recruiting outside the "family" while raising board performance standards. In down times, it is essential to make personal contact with as many of your donors as possible, paying particular attention to individuals. Call them. Invite them to visit programs and to volunteer. Ask for their advice and assistance. Create occasions for them to come together, meet, and hear from compelling speakers.
Communications. Richard Beckherd, formerly of the MIT Sloan School of Management and a leading organizational consultant, writes that leaders must always fine tune "how much energy to expend on getting results, and how much to expend on relationships." In my experience, when circumstances are tumultuous and unpredictable, the tilt must be towards relationships. That means maintaining, even increasing, the flow of information. Your communications budget should be one of the last things you reduce. Report your organization's accomplishments and goals. Devote more space to recognizing and thanking donors. Highlight the creativity and bravery of the program participants - artists, students, patients, researchers, and staff.
Speak to your nonprofessional audiences often and well. Inspire them with wonderful anecdotes and powerful facts. Keep the human dimension front and center. Make your messages visually interesting with pictures, graphs, tables, and quotes to enliven presentations. Attract and hold attention with strong formatting and design, elements as crucial as the language you use.
Disclose necessary and unexpected changes, no matter how drastic. These should never be hidden by silence, especially from donors. Acknowledge program cuts in specific terms; then focus on the actions you are taking to surmount the difficulties. Strike a balance among realism, determination, and optimism. Systematically banish blame-laying and bemoaning (no matter how justified) from your letters, proposals, website, and live presentations.
Investing in Staff. Low-cost efforts can lift morale, enhance performance, and renew commitment, all essential when programs are being reduced or consolidated and infrastructure investments must be cut. Ask staff for ideas; support skills development; recognize excellence and effort; have fun together. Clear-out-your-office-days with music and food - and no meetings - are liberating and energizing. Simple things like an on-site blood drive can charge up the staff. Personal notes or calls from the director or a board member, e-mailed cards and cartoons are potent tokens of appreciation.
Show confidence in the future with continued investments in staff development and in strengthening your institution. Demonstrate belief in your staff. Nurture developing skills; encourage building credentials. Spur enterprise with constructive, transparent annual reviews and a commitment to "hire from within." These are evidence of management's respect. You will find loyalty and trust, team spirit and productivity in return.
Commitment to these four principles will do more than sustain and build your organization. It will inspire and reassure the people you serve, the audiences you dazzle, and the communities where you are an anchor.
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