How to Survive (and Thrive in) Tough Times

(Ted Grossnickle is chairman and Derrick Feldmann is CEO of Achieve, an Indianapolis-based consulting firm that works with nonprofits. This is their first post for PhilanTopic.)

Everyone agrees: The economy is bad, with no relief in sight. From slowing retail sales to tumbling stock markets, it's a scary time -- not only for individuals, but for nonprofit organizations as well. All around the country, nonprofits are asking the same questions: Will donors give less? Will some donors suspend giving all together?

Certainly, those are reasonable questions. But the more pressing question nonprofits should be asking is: "How will we respond to the economy?" Because the way an organization responds will have a much greater impact on its stability than the mind-set of its donors.

First and foremost, nonprofits must defend against crisis-related paralysis by avoiding the following pitfalls:

Blame: Assigning blame for any problem that arises -- financial or otherwise -- on the economy rather than focusing on root causes.

Status quo: Seeking to "ride out" the problems, choosing not to launch anything new or exciting until things get better.

Rash decisions: Making emotional judgments regarding fundraising, programs, and cost cutting.

Donor abandonment: Stopping the practice of stewarding, cultivating, and soliciting donors, assuming they should be left alone in difficult times. This can be the worst mistake.

Communications "freeze": Communicating less with constituents, donors, and the public out of concern that they may be "bothered."

To combat these understandable but ultimately self-defeating responses, leaders of nonprofits must do just that -- lead. Lead and be proactive with your fundraising strategies and nonprofit management techniques.

How do you do that in times like these? By following a few simple steps that can help your organization weather the economic uncertainty and, maybe, even grow.

Perform a financial review. Assess what is truly important. Meet with the best fiscal experts from your volunteer base to review expenses and test your fundamental business model. Confirm your pricing, and make sure everyone on your staff is contributing to the bottom line. Defend against panic and emotion by focusing on real information and making data-based decisions.

Be proactive. Address constituents' fears about the economy directly and openly. Say, "Here is how we plan to address this crisis." Don't wait to be affected; look ahead and try to anticipate what you can do to be a stronger and more efficient organization. Use the inevitability of change to drive the change that you probably already suspected was needed.

Refine your message. Now, more than ever, you must make sure the community, donors, and prospective donors understand the role you play in the community. Refine your message. Be sure to clearly articulate your value to the commnity. Ask yourself, "What fundamental message must our constituents and donors remember about us?" Be specific.

Cultivate. Bring potential supporters into your organization's circle. Focus on the one resource they can afford to give: time. Provide opportunities for constituents to see the work you do and meet the people involved as a way to build relationships that yield long-term support.

Communicate. Tell people about changes or adjustments you have made and they'll be much more likley to get involved or make a gift. Get your story out and show that you're being proactive.

Keep fundraising. Visit your donors. Then, visit them again. In fact, you want to see them as often as possible in times like these. You can count on other organizations making the worst mistake of all -- cutting off contact with their donors. Recognize that as the opportunity it is and try to build stronger relationships with donors and friends. Cultivate even if you don't think you should solicit. Experience teaches us that people might give less, they might defer a decision, but they will give.

Find answers. If you see a decline in program participation or fees for services, don't automatically shrug it off as a by-product of the economy. Analyze the problem to see what is happening and how long it has been happening. You might discover something that helps you redefine and improve your programs and services.

Partner. Consider partnership opportunities with other organizations that provide similar services. Not only can it help you cut costs, it's an opportunity to show the community how collaborative you are. Remember to partner for mutual benefit, defining the benefits you wish to obtain first before committing to the partnership.

Define a work plan. Make sure your organization has a clear plan of work for the next six to twelve months (i.e., a strategic plan).  If it doesn't, work with your board to develop a plan that helps the organization stay on track and meet its objectives.

Executing on these strategies will help your organization get through these tough times and come out stronger on the other end. Be proactive. Get out in the community. Connect with donors and stay positive. Communicate your belief that your organization continues to do incredible work in the community.

An old saying counsels that each individual decides what his or her attitude is going to be in life. You can choose to be happy or sad, productive or unproductive. The same applies to organizations. Your organization's actions and attitude in these tough times will be observed -- and adopted -- by many.

So, why not make the best of it? Look beyond simple survival. Choose to stay strong and grow stronger. You might just be amazed by the opportunities that come your way.

-- Ted Grossnickle and Derrick Feldmann