Nonprofit Harvest

The Center for Nonprofit Management recent hosted a series, “Weathering the Economic Storm.  I encourage you to read the entire post, but their first recommendation really resonated for me:

• Go back to basics: Refresh yourself on your core mission and make sure your organization is only serving that basic principal. If you have to trim, always trim back to your mission.

It resonated because we talk a lot about the dangers of mission creep.  We see many nonprofits that have drifted from their core mission, usually with negative results. During these challenging times, it is especially important to be rooted in your mission.  Our resource article, Managing and Adapting in a Time of Uncertainty, refers to the mission as an organization’s cornerstone:

Step Two: Mission is the Cornerstone

• Spend time discussing your mission and connecting with stakeholders.
• Engage the board and staff in a discussion about the organization’s mission.
  • Ask what has changed in your area or field.
  • Review your mission. Does it still respond to today’s needs and environment?
  • Evaluate each activity or program as it relates to and contributes to the mission.
  • Evaluate the impact and quality of the programs and services you offer:
    • What do you do best?
    • Which programs are of unique value to the community?

The next step is setting priorities and making choices. Essentially, “If you have to trim, always trim back to your mission.”  Here is a chart that we created to help assess your programs and make the tough, but necessary, choices.

Step four is about strategies, with four basic categories:

• Do the same work with less
• Do the same with new funding
• Do less of the work
• Do the work differently

A lot of these suggestions have been made elsewhere (such as CNM’s blog), but I think calling them out is worthwhile.

Do the work differently
Many effective changes start with a new idea or approach.

• Reconsider how programs are delivered.
• Creatively redesign the use of people, resources, and technology.
• Outsource some administrative work.
• Share space, staff, or other overhead costs.
• Develop new revenue sources from contracts or earned income ventures.
• Initiate earned income ventures that fit with your organization’s mission.
• Collaborate with other organizations on programs.
• Ask allied organizations to take over programs that are a low-priority fit with your mission.
• Consider mergers.

These a few examples of what innovation could look like, although there are many others.  What stands out is the idea of boiling your organization down to its essence.  To use a cooking metaphor, creating a reduction.  There may be less volume, but what remains is potent.

(PS. Hat tip, Leatherstocking AEA’s post Ideas from Others: Middle Tennessee Nonprofits.)

• Weekend Link Roundup (November 22 - 23, 2008) from PhilanTopic

• Ease Up on the Restrictions from Philanthropy Potluck

• “Invest in Good Overhead” from Philanthropy 2173

• In This New Economic Reality, Nonprofits & Philanthropy Have to Confront the Fierce Urgency of Now from Perspectives from the Pipeline

• An open letter to MOCA’s board of trustees in the LA Times

• Budget fix in health and human services: Cut rates or cut eligibility from Scott Russell at MinnPost

• What stories do you tell about yourself? from Sasha Dichter
  • While you’re there, check out A NonProfit CEO Manifesto (blame it on Seth Godin)

One of the most common recommendations for organizations during this challenging time is to try to innovate and collaborate. These calls for outside the box thinking are important, but how do you start that process?  Kate offered some suggestions on how nonprofits could initiate these partnerships.  I hope that this blog is another way for the nonprofit community to collaborate.  Social media tools — such as blogs, delicious, and twitter — are a great way to easily gather and share ideas and resources.  They are also a way to strengthen our community and support one another during this challenging time.

Many organizations, such as Nonprofits Assistance Fund, are working to gather and disseminate resources. Our goal is to collect as many of them as possible and post them here.  These posts will be filed under Resource Collections.

Focus on the Economic Crisis

The Foundation Center has created a library of information on the economy.  Their Focus on the Economic Crisis features news items, commentary, research advisories, and blog posts from PhilanTopic. It is an excellent collection of materials, with a focus on research and analysis from thought leaders in the field of philanthropy.

Nonprofit Economy Vitality Center

The National Council of Nonprofits (NCNA) has created the Nonprofit Economy Vitality Center. It is designed as an “ever-evolving resource” with materials on the impact of the economy on nonprofits, statistical data on the nonprofit sector, and coping strategies to help nonprofits continue to deliver services.

The Economy and Philanthropy

The Minnesota Council on Foundations has posted a collection of resources on The Economy and Philanthropy. Although it is geared for grantmakers, many of these resources are useful for nonprofits to gauge the impact of the economy on foundation, corporate, and individual giving.  They also have sections in the side bar of relevant news items and resources for nonprofits.  I also suggest you visit their excellent blog.

Our Call to Action: Building a Collection

I believe that at this time, we have a call to action.  At Nonprofits Assistance Fund, it is our mission to help build financially healthy nonprofit organizations.  Right now, there are many factors undermining our sector’s financial health and viability.  Let’s take advantage of what we do have — tools that facilitate sharing information, as well as savvy and strategic thinkers working to sustain our sector.  I encourage you to connect with me and contribute to this collection.  But I also ask that you work with anyone else who is gathering this kind of information.  For example, you can contact the NCNA and help them keep their collection up to date.  If we are all working in concert to harvest resources, we all have the best chance to make it through the winter.

The economy has impacted the grant-making ability of foundations at the very time their support is especially critical. The Star Tribune published a story today on how Minnesota’s foundations are responding to this challenge.

According to the article: “Grant-making will not be significantly cut — at least for now. But giving is likely to decline or remain flat in 2009, which means it won’t keep up with demand from local organizations struggling for funding.”

Other key points:

• According to Jon Pratt, Executive Director of the Minnesota Council of Nonprofits: Minnesota is more reliant on foundation giving than other communities, “partly because Minnesota is third in the nation in per capita foundation assets.”  There is particular anxiety about next year given local and state government budget concerns.

• John Couchman, vice president of grants and programs for the St. Paul Foundation: “We have less money to give as community needs are bigger than ever.  We’re not alone. Everyone in philanthropy has been hit.”

• Carleen Rhodes, president of the St. Paul Foundation: “The charitable sector is not going to get a bailout, so we need to think about what we are going to do to lift it. All of us need to recognize this is an important part of the economic recovery.”

• Foundation leaders are weighing how they can make the most impact.  According to Bill King, president of the Minnesota Council on Foundations: “We’re asking, ‘What are the most important community needs? What are the best strategies? And where are the gaps [in funding]?”’

These are uncertain times, especially for nonprofits. We are in the challenging position of trying to meet increased needs, while at the same time trying to anticipate what will happen to our, already tight, income streams.  State budgets will likely shrink and the impact on foundation and individual giving is unclear (it has been debated many places, notably here, here, and here).  Where can you find reliable and useful advice on ways to navigate the economic downturn and position your organization for the future?

Nonprofits Assistance Fund is here as a guide.  The web is full of news stories, blogs, and wikis that provide resources and recommendations on nonprofit financial management. We’ll seek out the most useful content and post it here.

Our goal is to post 1-2 times a week.  If you would like up to the minute tips and links, follow @NAFund on twitter or check out our delicious bookmarks.  And you can help us collect information by using the hashtags #npecon and #npfin on twitter or joining our delicious network.  For analysis on the economy’s impact on nonprofits, strategic financial management advice, or other timely insights, please visit our other blog, Balancing the Mission Checkbook.

To get started, here are some resources from Nonprofits Assistance Fund:

• Kate discusses the economy on Balancing the Mission Checkbook. She has identified some strategies for nonprofits, as well as offering advice on on what to be wary of. Here are a few recent posts prompted by the current financial situation:
  • Jittery About Investments
  • Start Your Turnaround Strategies Today
  • This Post Will Not Cheer Your Up
  • It’s 10am, Do You Know Where Your Cash Is?

• Managing and Adapting in a Time of Uncertainty offers a framework to respond to the challenges nonprofits face in this economic downturn and set priorities with mission in mind.
• How financially healthy is your nonprofit? With this Financial Self-Assessment, you’ll have a better idea. Use the checklist to assess your organization’s financial management practices.

There are resource collections, blog posts, podcasts, news articles, and other information that we have found particularly useful. They are a great place to start.

Resource Collections:

• How Charities Cope With a Troubled Economy: Stories, live discussions, and statistics from The Chronicle of Philanthropy

• Economic Crisis Resource Center: A compilation of resources put together by Meyer Foundation.

• Dealing with the Economic Crisis: Resources collected by Donors Forum.

• Opportunities in Lean Times from Fieldstone Alliance

Blogs, podcasts, new articles, and other sources of information:

• Philantopic has done an excellent job collecting news stories on the economy and its potential impact on the nonprofit sector. Their posts are a mix of analysis, provocative ideas, and tangible suggestions to help your organization during this uncertain time.  I suggest reading all of their posts on this topic, and have included a few that I think are especially relevant to nonprofits:
  • Tips for NPOs Threatened by the Financial Crisis
  • A to Z Survival Guide for Uncertain Times
  • Time to Start Preparing for the Unthinkable?
  • How to Survive (and Thrive in) Tough Times
  • Do Foundation Giving Priorities Change in Times of Economic Distress?

• Lucy Bernholz blogs at PHILANTHROPY 2173, where she regularly comments on the future of philanthropy.  Lucy shares some predictions on the possible short-term impact of the economy for foundation and individual giving, as well as ideas for innovating the business of giving.
  • Stirred, Not Shaken
  • Foreclosures, Falling Economies, and the Future of Philanthropy
  • Resetting Philanthropy
  • What Will You Do?

• Philanthropy Potluck, from the Minnesota Council of Foundations, regularly includes resources and news stories on the economy for grantmakers and grantseekers.

• Special Address, On Third-Sector Funding and The Economy, from Tom Suddess

• Greenlights Nonprofit Town Hall Meeting:
  • What the (Near) Future Holds
  • Raising Money in the Downturn

• New York Times
  • Giving Section
  • Facing Deficits, States Get Out Sharper Knives