Anyone who knows me knows that I'm one of the last people they'd expect to make a bullish case for a quick or V-shaped economic recovery. And that's not what I'm going to do here.
But a short essay ("The Case for Optimism") in the August 24/31 issue of BusinessWeek is a nice reminder that even the darkest cloud has a silver lining. Or, as George Harrison might have put it, all things must pass, and this recession is no exception.
How does BusinessWeek make the case for "rational optimism" in the current economic environment? Well, their case has two components:
First, recessions such as this one, painful as they may be, can set the stage for future growth. As economist Joseph A. Schumpeter wrote in 1942, "creative destruction" shakes loose people from old, dying businesses and forces them to figure out new ways to be useful. Second, ingenuity is additive. Equipping one or two billion more of the world's people with higher education and better technology over the past couple of decades has increased humanity's ability to solve hard problems. The next world-changing breakthrough may come from China, or India, or Eastern Europe....
True, these are broad macroeconomic arguments and not entirely germane to what is happening on Nonprofit Street. But there's enough of a correlation between conditions in the nonprofit sector and the broader economy to allow one to argue that the sector will come out of this downturn stronger and better positioned to effect change than it was before it all hit the fan:
- A lot of nonprofits will be forced to shut their doors, but those that survive will be stronger for it. This is the "arbitrary winnowing" scenario laid out in Paul Light's "Four Futures" paper. "In this scenario," writes Light, "some nonprofits will fold, while others will prosper as contributions flow to the most visible and largest organizations as well as to those most connected and influential with their donors." I'm not as pessimistic as some, in that I don't believe the "winnowing" will be that arbitrary. In this environment, weak and ineffective organizations are more likely to fail than stronger organizations able to demonstrate their effectiveness.
- Ingenuity IS additive. And, thanks to the Internet and inexpensive (and free) communications tools, it has never been easier for nonprofits to collaborate, share best practices, and access creative, innovative thinking in any field or discipline.
- Expectations have been reset. In the Reset Economy, the nonprofit or foundation job-for-life is an artifact of the past. And that means a lot of incredible nonprofit talent is going to be available for a very reasonable price.
- Gen Y and the Millennials are here. Remember, once upon a time, before any of us knew what a 401(k) was, how we dreamed about changing the world? Well, that's what Gen Y and the Millennials dream about. Let's give 'em the tools and encouragement they need to make those dreams happen. I expect we'll be pleasantly surprised.
I know, this is a quick gloss on a serious topic, but I hope some of you will join me in discussing it further. In the meantime, let me just repeat a bit of advice from the BusinessWeek article offered by Paul J.H. Shoemaker, founder of a consultancy that advises companies and organizations on their decision-making strategies: Avoid the tendency to assume you fully grasp future risks and opportunities. Ask people not just what they know, but what they don't know and what they're not sure about. And, if you want to know what's coming down the pike, learn how to look everywhere at once.
Your thoughts? Use the comments section below....
-- Mitch Nauffts
