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A Recipe for Tough Times: Something Old, New, Borrowed, and...

November 20, 2008

(Michael Seltzer is a regular contributor to PhilanTopic. His recent posts include the A to Z Survival Guide for Uncertain Times and the A to Z Grantmakers' Guide for Uncertain Times.)

Recession4Yesterday, the Foundation Center, the New York Regional Association of Grantmakers, United Way of New York City, and Citi joined together to host a timely roundtable forum on the economic crisis. More than three hundred representatives of foundations, corporations, local government agencies, and the nonprofit sector gathered to discuss the implications of the current recession on the most vulnerable in our midst, the nonprofits who serve them, and how the sector might best respond in the weeks and months to come.

An Economic Hurricane

Natalie Abatemarco, the director of North America Community Programs at Citi, opened the discussion by noting how the people served by those gathered are among those who "will be hit first and hardest" by the downturn in the economy, and that the people in the room, collectively, comprise society's "first responders." Brad Smith, the Foundation Center's new president, referenced how the United Nations had coined the term "human security" a decade ago after the Asian financial crisis, and how relevant the concept is today. Human security focuses on shielding people from pervasive threats and empowering them to take charge of their lives. It demands creating genuine opportunities for people to earn enough to meet their basic needs and live in safety and dignity.

The event's keyonote speaker, Geoffrey Canada, president and CEO of the Harlem Children's Zone, echoed the prevailing sentiment that we are facing an "economic hurricane," and predicted that we will see a dramatic upsurge in "the new poor" (i.e., the recently unemployed) as well as the "old poor" as conditions for the most vulnerable worsen over the next few years.

"This is a time where leadership matters," added Canada. "We have a few months perhaps to prepare for the next two years. Nonprofit leaders must raise their voices with government officials at every level, especially on the federal level, which must invest money on the local level to preserve the vital human service infrastructure in our cities."

Throughout the morning, there was a shared sense of urgency but also of opportunity. One speaker referenced a comment by a member of the incoming Obama administration: "You never want a crisis to go to waste. It is an opportunity to do important things that otherwise we might avoid."

Action Steps

Specific suggestions included:

  • Be bold and courageous;
  • Build stronger relationships with core supporters;
  • Carefully manage your cash and liquidity;
  • Collaborate and partner with kindred organizations;
  • Engage in financial scenario planning;
  • Get close to donors and keep sending the message that your organization matters;
  • Innovate, generate new ideas, and maintain extraordinary faith in the "possible";
  • Keep leadership focused on people and services;
  • Make your organization attractive to both young people and "business sector jumpers";
  • Share administrative functions with other organizations;
  • Utilize technology in new ways.

Several speakers called on foundations to do more, especially in regards to providing general operating and/or capacity-building support. Others cautioned against viewing foundations as the main answer to the problems we face.

Indeed, Clara Miller, president of the Nonprofit Finance Fund, shared an observation made recently by Patty Stonesifer, who is stepping down as chief executive officer of the Bill and Melinda Gates Foundation: If the Gates Foundation spent down its $33 billion-plus in assets, as well as the $37 billion or so promised it by Warren Buffet, the sum would barely equal two-thirds of California's public school budget for a single year.

By the end of the summit, the paramount message was clear: Like Christopher Columbus, we are all in uncharted waters and our final destination is months, if not years, away.

-- Michael Seltzer

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Posted by Ron Smith  |   January 22, 2009 at 03:16 AM

This economic downturn will affect so many sectors that there will be no way to determine the effect ,I do not believe we have seen anything to compare it to reasonably.

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