Resilience: Frankly, the people who lead and work for arts organizations have always been about as resilient as you could be, if resilience means the ability to improvise with what’s at hand and bounce back.

Innovation: How about innovation? The arts shine as innovators in creating art, but much less so on the organizational side. Most nonprofit arts organizations are structured using a management and financial model that’s been around for a long time. More and more questions have been raised about the model that will eventually lead to some more options. On his great blog The Artful Manager Andrew Taylor frequently writes about these questions including here and here. There are other interesting developments in helping arts organizations to innovate for long-term structural change. The James Irvine Foundation states that “we define innovation as instances of organizational change that stem from a shift in underlying assumptions and provide new ways to fulfill the mission.” Incremental change isn’t enough for arts organizations to confront their long-term challenges.

Adapting to the new normal: I’m not so sure that we ever had an “old normal”, or that change is a new dynamic. Regardless of the current terminology, though, arts organizations are facing deep and sustained changes to their funding sources, audiences, and role in the community. There is a lot to learn about becoming more adept at identifying the questions and leading the necessary changes. The article Leadership in a (Permanent) Crisis describes adaptive leadership as the capacity to sort out and balance the short and long term issues. Facing immediate problems, many managers will hunker down and nibble around the edges of problems.

People who practice what we call adaptive leadership do not make this mistake. Instead of hunkering down they seize the opportunity of moments like this one to hit the organizational reset button. They use the turbulence of the present to build on and bring closure to the past. In the process, they change key rules of the game, reshape parts of the organization, and redefine the work the people do.

The time is critical for many arts organizations to understand their current situation, envision the extent of changes, and learn to truly and continually adapt.

What if? Last week I was sad to read that the Harlem School of the Arts closed its doors. The school was an institution in the neighborhood for over 40 years. The news report paints a case story of their failure to adapt – years of financial, management and governance problems and attempts to address them with short-term cuts, emergency fundraising efforts, and fingerpointing. If we don’t want to see this happen elsewhere we need to learn some new approaches.

Yes, they’re the buzz words of the day, but I can’t argue with the importance of resilience, innovation and adaptive leadership.

This blog was cross-posted at Springboard for the Arts’ Springblog.

While we may all be eager to leave this year behind and hope for more signs of turnaround in 2010, there have been some remarkable highlights. Here is my personal list of the top five reasons for Nonprofits Assistance Fund to celebrate 2009.

1. Real Collaboration: We learned a lot about collaborating to provide some great resources, training, and customized assistance to help nonprofits this year. Collaboration requires openness, communication, and trust. With wonderful collaborators in ArtsLab and the Resilient Organizations Fund, and a partnership with Minnesota Council of Nonprofits to develop Recession-Year Financial Leadership, I learned a new way to work.
2. Enlightened funders: The financial challenges faced by foundations has been well covered by Minnesota Council on Foundations. Many local and regional foundations have been bold and creative in meeting urgent needs to maintain services, re-imagine delivery, and energize community. Special recognition to the Pohlad Family Foundation and the Blue Cross and Blue Shield of Minnesota Foundation for launching special projects this year. And kudos to the Minnesota Community Foundation and the Saint Paul Foundation and other partners who created GiveMN. Every nonprofit needs a boost of both funds and confidence.
3. Information, Opinion, and Inspiration: I needed a lot of all three this year, and found plenty from good journalists and bloggers and from the Twin Cities extraordinary arts community. If you agree that these are important, you need to do three things – subscribe or donate to your news sources, comment on and share blog posts, and buy tickets or memberships for arts events.
4. The resilience and guts of Minnesota’s nonprofits: Wow. What else can we say about the Herculean effort and accomplishment of thousands of nonprofits this year as they helped people and communities make it through one of the toughest years imaginable. The data in MCN’s most recent Current Conditions Report tells the story of both hardship and endurance.
5. The people: The biggest celebration is for the staff of Nonprofits Assistance Fund, who revved their engines this year as never before to deliver advice, guidance, training, and crucial financing to organizations doing important work. We often talk about the good work of our clients. I celebrate the great work of Janet, Sandra, Phil, Michelle, Matt, Ashley, Amanda, Michael, and Steve. What a year.

There are other year-end lists of interest for nonprofits at Nonprofit Quarterly and PhilanTopic. As for 2010, I trust in the leadership, vision, and continued resilience of nonprofits, though I think it will be another hard year. More on that later, I’m sure.

Happy New Year.

As an example, in just the last week:

• I attended two important meetings where key participants were missing in action.
• Three training events and webinars were canceled.
• A professional associate stayed home with his son for several days.

Two days ago we had to scramble to replace the speaker for one of our own training events.  That really brought this home.

Scramble really describes the activities. There were many emails sent looking for a replacement, and the reply often was “I’m already scheduled for another training, meeting, travel…” Fortunately, a replacement was found (who did a great job) and I am grateful for the size and quality of the network of consultants in the Twin Cities.  But it’s clear that none of us have any slack in our schedules anymore. All the reductions in staff and hours in the past year have taken their toll, removing any elbow room (if there ever was any to start with).

Contingency Planning

The whole process got me thinking about contingency planning. This is going to happen again and again this year and we all need to be prepared. We have a Disaster Recovery Plan, but it wasn’t developed to address this situation. We need to have a plan for deciding when to cancel a meeting or training, when to use a backup plan, and who to call on for reinforcements. We might need to look around for some elbow room again by scaling back a little on commitments for the next few months.

How are you adjusting to more and more absences caused by this flu? Do you have a clear agreement on priorities and steps to take when you have multiple staff members all sick at once?  The Nonprofit Risk Management Center has a number of useful resources and tools, including a list of contingency planning resources and a tutorial on business continuity planning.

As with any planning process, agreeing on the priorities and responsibilities is step one. We’re starting today.

Update: Here is an H1N1 Flu Preparedness Toolkit from the National Council of Nonprofits.

The state of Minnesota (including yours truly) is celebrating a playoff berth for a plucky squad of baseball players, assumed out of the running after All-Star slugger and 2006 AL MVP Justin Morneau’s season ended on September 16th.  But contributions came from unexpected places and the Twins went 17-4, winning their last 5 games including last night’s tie-breaker.

Yesterday, looking forward to the game, I started thinking about what nonprofits could take away from this transformation. 

Put On Your Rally Cap

At Nonprofits Assistance Fund, we have been encouraging organziations to consider new ways to generate revenue and/or trim expenses to build a sustainable business model in this economy.

Morneau was a major run producer (or income source).  And even with him in the lineup, the Twins were barely hanging on.  How could the team adjust their strategy (business model) in order to be successful? 

On twitter and facebook, I asked what nonprofits could learn from this turnaround, and here are some responses:

• What about an angle on hanging in there like the Twins tied to [nonprofits] in tough times and tackling new approaches.
• That even superstars need to be surrounded by great teams for success.
• Bench strength rules. Always play hard.
• We shouldn’t be overly dependent on one [income] source.
• Lean…They run that org lean. Plus, they’re great with crisis management aka injury replacement moves.

Here are some additional takeaways:

• Use your lineup: The Twins are carrying three catchers because they think that gives them the best chance to win. What do your staff, board, and volunteers bring to the table? Take advantage of your in house skills.
• Be flexible: I think I’ve seen Nick Punto play every position.  Jason Kubel, the designated hitter,  is now playing full time in the outfield. Are there ways to be flexible with program delivery, fundraising, or communications? Are there expenses that you could defer?
• Play smart defense and don’t commit errors: Make sure that you have the systems in place in order to be successful. Good management systems can prevent and minimize some challenges.
• Swing for the fences: Other players stepped up to produce runs in Morneau’s absence.  Make your case to donors, foundations, and the community.
• Be a good sport: Take a note from Brandon Inge and Jim Leyland when things don’t go your way.  If another organization receives a sought after grant or contract, be gracious. Focus on the good work that will be done in the community, rather than your disappointment.
• Don’t give up.

One last thought, from Harvard Business’s Tip of the Day – 3 Survival Lessons from Small Business:

Planning. Plans are often outdated as soon as they come out of the printer. Small businesses tend to focus more on planning and less on plans. They watch their surroundings and act accordingly.

Let’s play ball.

This blog is cross posted at Nonprofit Harvest.

Here are three examples of innovative and creative ways that nonprofits are raising money online.

1. Modest Needs

Modest Needs offers an online forum to make direct contributions to individuals or nonprofit organizations to address a very specific, and usually modest, request for help. It’s kind of like Kiva’s direct lending model – but with direct contributions instead. Through Modest Needs, donors can see the very direct impact of their gift.

If it sounds too good to be true, I have a testimonial from Susie Brown, Executive Director of Child Care Works that they were able to pay for a capacity building project very quickly with funding through Modest Needs.

2. United Way’s Give 5 Now

You may have already read about the United Way’s Give 5 Now campaign. Watch their YouTube video about the importance of supporting urgent needs now. I hope that you can’t, and don’t, resist the urge to give at least $5.

3. Social Media

Social networks have exploded in the last year. I love Facebook, and was impressed by a recent fundraising campaign that Pillsbury House Theatre launched on their Facebook page. After giving a small amount, the updates and status reports that I received made me feel like a part of the campaign.

Give List uses blogging and Twitter to spread the word that there are ways to give even if you don’t have extra cash. The list starts with 71 ways you can give and then spreads and multiplies through an online community.

Even if it takes a while for online giving to match the dollars of more traditional forms, these example show ways that online strategies are different, fast, and direct.

Don’t be a Scrooge – give online now.

We’re pleased and honored to be featured on Alltop. We’d like to thank our readers for their support and participation – we would not be a part of this exiting project without you. A special thanks to Guy Kawasaki and Nononina, Nedra Kline Weinrich, and everyone else at Alltop for including us in your site.

For more information on the story behind Alltop, to see their full list of categories, or to browse the latest top stories, visit http://alltop.com/.

The phone callers asking about starting a nonprofit tend to fall into categories. One group are of people who are deeply committed to helping their community and they just don’t know about the alternative ways to get involved. A second group are people who are ultimately trying to create a job for themselves and they believe the myth that there are “millions of dollars in grants available for you today!.” I don’t have much patience for them. The last group are those who have already started an informal program or project and want to find a way to get some money or help to continue or survive. These calls are the most complicated and the toughest to help. I can only hope that they have put some effort into the basic research and needs review as described in Dan Kadlec’s article. Otherwise they will confront the harsh reality of funding, boards, and the steep learning curve of a start up.

There are plenty of opinions and experts about how nonprofit organizations “should” do their work and keep the books balanced. I agree with some, disagree with several, and get confused by others. There are a few things I am sure of. First, balancing the mission and money of a nonprofit is hard. It’s also an essential responsibility of executive directors and board members who want to be sure that the community will be served not just this week but also in the future. Secondly, leading a nonprofit is not just like running a for-profit business. While there are some common elements, I see marked differences every day. I came to this work after more than twenty years in community banking where I worked with businesses, entrepreneurs, and the bank’s board of directors. I understood marketing, financial analysis, and management. In my six years leading a nonprofit and working with hundreds of others I’ve learned about the additional complexity and dynamic that comes from balancing community needs and funder requirements, volunteers and paid staff, board members and executive directors, and demands for public accountability, transparency, and measurable results.

My hope for this blog is to expand on the conversations I have with executive directors, staff and board members of nonprofits, with foundation program officers, and with bankers and other businesspeople. Beyond the technical answers to many questions – how to create a budget, read a financial report or build an operating reserve – there are larger issues that impact all of us in the nonprofit world and our larger communities. I’ll be posting about these broader issues from my own viewpoint and with links and summaries of news and research. I’ll also share some of the day to day conversations and lessons we learn together about looking for that balance. You’ll also hear some of my opinions, so be prepared. Please share your own opinions, ideas, thoughts, resources, and questions to the mix.