Nonprofit University Blog

Strategy, strategy, strategy.  If ever there were a word that should guide us now, it’s strategy  And yet, too many nonprofits don’t “get” strategy.  They don’t like strategy.  They somehow think it is a dirty word, and not of benefit to them.  And thus they continue to go about their business reacting.  They react to financial difficulties by reflexively cutting budgets.  No strategy is involved, no thought to core competencies, protecting the ability to fulfill the mission, etc.   And then they complain when a donor doesn’t fund them as before because the funder has gotten—okay, i’ll say it—more strategic in where his/her/its dollars are going. A few days before I was to facilitate a recent strategic planning session, I got a phone call from the organization’s board president.  At the board meeting a few days earlier, a number of board members couldn’t understand why the group was going to waste a whole day on strategic planning when it really needed to pay attention to its fiscal health and sustainability in light of the current economy.  Just how would those board members propose addressing the question of financial sustainability without a strategic plan?  On what logic and data would they make decisions?  On what grounds would they make choices for where or how to fundraise? Where or how to cut or expand programs? How can you answer questions of sustainability if you don’t know what you want and need the organization to look like in one, three, five years?  Funders certainly are being more strategic.  A recent survey by the Delaware Valley Grantmakers reported that funders are engaging in “significant rethinking about the areas they fund and the type of funding they provide.”  And 42 percent of their respondents said their grant budgets would not change in 2009, and the same percent said they’d make smaller grants in 2009 than 2008 and “focus on vulnerable populations.”  This suggests that minimally some level of strategic thinking drove these conclusions.

Do not think that The Nonprofit Center is immune to the current economic struggles, because we are a reflection of what is going on in the nonprofit community.  But even from my vantage point of pain, I still recognize the bad decisions that organizations are making in response to the economy. Drastic, reactive decisions in an attempt to cut costs without considering the long-term consequences to their missions do not serve organizations.  We have to remember that the current situation, while serious, is not permanent. If an organization abandons strategic planning as well as its strategic activities, that organization abandons its future for the sake of the short-term.

The cover story of the February 23 issue of Newsweek was all about stress—the pluses (yes, apparently there are some benefits that can be had from stress), the minuses;  who handles stress really well (special ops!), and who not so well, and so forth.  Actually, a bit more than I really wanted to know about stress as I tried to figure out whether I was in the special ops group or not.  While all the time, yes, you got it, stressing out ever more. But it did get me thinking about the stress levels in our organizations and what executive directors and boards are doing to reduce stress among staff.  My first thought was that most organizations are probably spending more time creating more stress, consciously or unconsciously, than they are trying to reduce stress.  For example, constant talk about how donations are going to drop due to the economy is not a stress reducer.  If, as all too frequently happens, this discussion happens again and again, formally and informally, with NO conversations on how the organization is addressing this problem, might be protected from this problem due to healthy reserves, etc., you’ve taken a stressful conversation and raised it to the level of a freak-out conversation. 

If, for example, you are one of the people who thinks saying “nothing is off the table” as a way to say “no decisions have been made,” please, think again.  This is heard as layoffs, salary reductions, loss of benefits, etc., and not “we are trying to be as creative as possible in resolving this situation so that we can protect everyone’s job because we value all of you and the work that you do.”    

This is not lying or spinning; it is simply saying the same thing but in a positive reassuring manner. So, rather than contribute to the roller coaster of emotions that this economy is producing all on its own, executive directors and boards should identify ways to reduce the stress and anxiety in the workplace.  And this doesn’t have to cost—or at least not a lot. 

1. First and foremost, watch what you say and how you say it.  The English language is a wonderfully rich and vibrant language.  We have a great array of words to be sure we give the right message.  So craft your messages well.
2. Speaking of language, one of the most appreciated rewards for a job well done are expressions of thanks and recognition for a job well done.  And it costs nothing!  (Unless you want to make a plaque or turn over a parking space to the employee of the month.)  According to the authors of the article “Reward Practices and Organizational Performance,” Robert Nelson, in his book 1001 Ways to Reward Employees, noted that the preferred award was praise and appreciation from an employee’s direct supervisor.  And the most widely used awards in Fortune 1000 firms were “nonmonetary recognition awards.”   
3. How about letting folks sleep in an extra hour or so one day and arrive later for work, or leave a few hours early.  Or go with flex time if you don’t already do that.
4. Cater (with the executive director and/or board paying out of their pockets) a special breakfast or lunch for the staff.  Nothing fancy, but a simple show of gratitude and appreciation.
5. If you have, as we do, an area wellness center that travels to offices for chair massages, see if there is something you can barter with in exchange.
6. Ask staff what they would like as no-cost/really low-cost stress busters.  It might be a simple as not answering the phone for an hour, having a book club in the office, doing yoga.  You just never know.

 And before you start saying, “Oh, but we are just too busy for that,” let me just say, balderdash!  There isn’t any organization, regardless of its mission, that cannot find the time and the means to help its most invaluable resource—its staff—feel a little less stressed.

I am desperately trying to find something positive to blog about, but I fear I cannot.  So, maybe this could be perceived as a mixed message.

The Conference Board recently surveyed corporations to understand the current thinking on corporate giving.  So, the predictable bad news:  45 percent of the 189 companies that responded said they’d already reduced their corporate giving budgets for 2009 and another 16 percent anticipated doing so.  But the not so bad news:  that leaves another 40 percent that have not yet reduced their budgets or have yet to even anticipate such a move.  Yay!  And for nonprofits that work in the areas of the environment, sustainability and climate change issues, the news might even be considered down right positive:  28 percent of the respondents said they were actually going to increase their donations in these areas.  Mission change anyone? (kidding!) 

Carolyn C. Cavicchio, the senior researcher on this study, says this focus on funding is simply a case of donations following the interests of the businesses.  So, what’s new about that?  We’ve been watching businesses become much more focused with their giving over the last 10 years or more.  They’ve been aligning their giving with their needs:  more and more companies give to workforce development as it relates to the particular needs they see in their future employees.   What’s wrong with that?  Many donors have vested interests:  family and friends are often motivated to give to the health issues that affect themselves and those they love—cancer, mental health, MS, and so on.

But where might this trend by businesses leave those nonprofits which don’t serve the development of future employees of America?  Think again.  Do you really not contribute?  Decades ago, a major engineering university was perplexed.  They were graduating highly skilled and qualified engineers who were immediately scooped up by eager employees.  But a follow-up study of their graduates to see how they progressed years later did not reveal welcomed results.  The university found that its graduates weren’t doing as well in the promotions department and weren’t moving up the ladder as hoped.  Why?  As engineers, their education had focused on the technical and not the liberal arts.  This school’s graduates weren’t able to handle the content of conversations that came up at social events as they couldn’t have a discussion on literature, theatre, art.  This school’s graduates weren’t as comfortable as others with public speaking and managing the human side of the job.   The solution?  Emphasize the liberal arts as well as engineering.

So, take heart liberal arts nonprofits.  Don’t sound the death knoll just yet when you hear that 41 percent of the corporations responding to the Conference Board survey say they will decrease their funding to arts organizations.  Instead, get creative in your positioning:  you do meet corporate needs; you can help them build a successful workforce today and into the future. 

Bad enough that I had to learn this morning of another nonprofit board that thinks it can do away with its executive director, thereby saving money, and just let board members run the organization.  (That was last week’s rant, I mean blog.)  Boards can’t do their own job!  What makes them think they can do fulfill both the management and governance functions at once and still do well by the organization?

But now I have to see organizations and individuals all over the country holding workshops to teach people how to start a nonprofit.  NO!  Stop immediately! 

Even in the best of economic times there are too many nonprofits.  In the worst of economic times we should be teaching people how to merge their struggling nonprofits, how to close down their failing nonprofits.  Yes, during tough economic times need is greater for many of the services nonprofits provide.  But this is NOT reason to encourage people to start a new nonprofit. We have enough infrastructures established to meet demand; we just aren’t running the infrastructures as effectively and as efficiently as we should.

For the first time in my many decades in the sector, we aren’t just hearing of nonprofits closing; we are hearing of nonprofits filing for Chapter 11 bankruptcy.  That suggests a large amount of debt accumulated over many years—not just since the economy took a huge turn for the worse.  That suggests a board and staff that think it can restructure that debt, reconfigure the organization and come out on the other side a stronger, more viable nonprofit.  But can it really?  It didn’t do anything during all of the years that it was accumulating the debt, so why should we think it is going to step up to the plate and do more, do better now?  Why not have the organization go straight to Chapter 7 and let viable nonprofits that have developed a proven path to financial sustainability—through good and tough times—take over their “territory?” 

There is a reason nonprofits fail, need to file for bankruptcy, need to merge.  Sometimes it is due to poor governance and/or management; sometimes it is due to a failure to meet demand, to find a mission that is needed, that still resonates; sometimes it is because of over-saturation.  But, please, listen and hear the message; it isn’t hard to do.  When nonprofits are closing for lack of good governance or management or insufficient funds or inefficiencies of so many different stripes or simple lack of demand, what brilliant person sees the solution as creating new ones?

Now is not the time to be starting new nonprofits.  Now is the time for all—funders, individual donors, staff, board members, etc.–to be doing honest assessments of the long-term viability of every nonprofit.  Now is the time to make our sector stronger by doing a little triage:  letting the truly weak close down, the somewhat viable merge and the truly strong flourish.

Enough is enough.  And we have enough.