as Published in the Globe and Mail (National Edition) - February 16, 2009
While businesses are feeling new pressures with recent market shifts, those pressures are even more acute for not-for-profits. Many corporate donors have had to shift away from, or limit, charitable contributions due to business pressures.
At the same time, private donors are cutting back because they have seen their personal net worth dramatically eroded – and many are unsure of what the future holds for their earnings potential. Endowments that have provided operational and capital funding may also become less reliable, as many have seen significant drops in value or in earnings. All of these funding uncertainties come at a time when many not-for-profits are seeing increased demand for their services.
Tougher times put increased pressure on any organization; they highlight weaknesses and require you to rely on strengths. Now, more than ever, you have to have your fundamentals right to survive and thrive – so that you can take advantage of some of the opportunities that tougher times bring.
Get real
With the notable exception of Barack Obama – hope is not a strategy. What's required is a hard look at reality, including a tight, conservative review of funding sources. What are the impacts on endowments? Which donors are cancelling or delaying commitments? Can you count on the same attendance at fundraising events at the same price points as in the past? A realistic assessment will allow you to adjust your plan while you still have room to move.
Focus and Edit
It's always tempting to add projects. But now, more than ever, is really the time to ensure that you're looking at the market, not just your mission. Given pressure on staff, volunteers, board members and donors, absolute clarity around what you are trying to achieve is needed.
A recent Harvard Business Review article titled “Delivering on the promise of non-profits” showcased an interesting example of the power of focus.
The article talked about the Rheedlen Foundation, whose mission was to improve the lives of poor children in America's most devastated communities. The organization had limited success until it zeroed in on exactly what it wanted to achieve: helping 3,000 Harlem children under the age of 18 reach the same standards as children in middle-class communities. The Rheedlen Foundation changed its name to “Harlem Children's Zone,” cut out activities that didn't serve its focused goal, measured performance and achieved unprecedented results.
Get a grip on costs
Don't play down the importance of overhead. Many not-for-profits underinvest in administrative and marketing activities that are essential to support service delivery. Others underreport their spending. Either way, failing to identify the true cost of delivering services will ultimately hurt the organization. With actual costs in hand, not-for-profits are equipped to make tradeoffs and focus on areas that deliver the greatest impact.
Leverage the values shift
As times get tougher, we're seeing a shift toward more fundamental values, such as the importance of family, community and looking out for each other. This creates an opportunity for not-for-profits to create a greater grassroots connection. For BC Children's Hospital's major capital campaign, this has meant shifting from a focus on major donors to include social media tools that drive grassroots awareness.
Differentiate yourself
Think about what makes you different, focus on your core competencies, be sensitive to the challenges that your corporate and individual donors are facing and get specific about what donor dollars deliver. Donor are demanding more accountability – they need to feel that every dollar they give matters.
Play nicely with others
Use this time as an opportunity to connect with other not-for-profits that may serve a similar market. Are there synergies you can achieve by working together? Overhead you can share? Can you create a donor program that benefits both of you?
Think like a business
Now is the time to ensure your mission has a market. Which specific results are you holding yourself accountable for; what's the true cost of achieving those results and how can you focus the organization to achieve them?
Be Countertrend
Take a page from Procter & Gamble Co. – in good times, the company looks for slow, steady growth. In tough times, they take advantage of market chaos and overinvest to gain ground with consumers.
Yes, what's happened has thrown us all a giant curve ball. But this can actually be exciting – it forces you to revisit your assumptions. Addressing the disruption actually frees you to think and act creatively – which ultimately helps you better understand your own true potential.
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