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37 posts from January 2009

More Good Advice for Nonprofits

January 06, 2009

(Carl Richardson is the owner, president, and chief bottle washer at Richardson Development. This post first appeared on our PND Talk message board, a vibrant online community for development professionals. You can e-mail Carl at carl@cvrdevelopment.com.)

Recently, I had the opportunity to offer a workshop on building a "fundraising board." While preparing the talk, I asked the sponsor if he wanted me to speak to the current economic environment and he said, "Someone might have a question or two about it. Yes." After I prepared my last slide, I realized that these statements were my best advice for any board, in any climate. They are not new or earth-shattering or pie-in-the-sky. They're simply true.

1. Be grateful for what you have. Things can, and often do, get worse; but for right now, you have what you have, and with that you can make a start.

2. Grow your mission. Many nonprofit organizations that were founded between 1929 and 1935 are still in existence. Focus your attention on growing your mission. If you focus on excellence, money will follow. If you focus on money, excellence never happens. As in the best of times, let your mission dictate management decisions.

3. "Dance with the ones who brung ya." Even as you explore all possible sources of revenue, pay special attention to your loyal donors. Be committed to maintaining old relationships while developing new ones. Have "friend-making" be a criteria for success this year. If loyal donors are forced to cut or reduce the size of their gifts, be gracious and genuinely grateful. When good times return, your donors will remember your integrity and flexibility during the dark days. Re-evaluate all gift goals and budgets accordingly.

4. Base organizational decisions on policy, not fear or personalities. Strong policies will protect your organization regardless of the state of the economy. Charismatic, strong-willed board members or CEOs do not always know their way out of the woods; often, they're just listening to the sound of their own voices.

5. Focus on planning your next three years. You need time to let the dust settle. Strategic planning will give you that time while keeping you busy with a task, planning, that is essential to moving forward. Be deliberate about your actions by planning them first. A caveat: Do not base your plans on what is; base them on what will be. Conceive how your organization might realistically grow and plan to realize that vision.

6. Actively hope. Know that things change. Hope always leads to action, action always causes change, and change either leads the way out or teaches us to take a new path.

7. Stop worrying. The act of worrying is a lot like teaching a pig to sing -- it wastes your time and annoys the pig. Focus on finding solutions rather than more ways to stress.

8. Take the next step. Leaders are people who can review options, make a decision, and, above all else, take action. Action always leads to another decision, which will lead to another action in turn. By putting one foot in front of the other, you can walk your organization out of the woods.

I'm curious whether any of these resonate with you. For me, they are concrete, tried-and-true approaches that must be cultivated every day. What do you think?

-- Carl Richardson

More Advice for Nonprofits in Tough Times

January 05, 2009

Blueavlogo72dpi_2As a nonprofit leader trying to navigate stormy economic times, you're probably open to any advice you can get. But too often, says Jan Masaoka, director and editor in chief of Blue Avocado, a bi-monthly online publication for community-based nonprofits, the "advice from the philanthropic-consultant industrial complex is enough to make a person depressed or even angry." Writes Jan: "I heard a well-known nonprofit guru tell an audience, 'And when we were really stuck about what to do, I picked up the phone and called my friend Al Gore.' I felt like throwing a shoe at him! How is this a replicable, usable strategy?"

Masaoka knows something about replicable, usable strategies -- she was executive director of CompassPoint Nonprofit Services for fourteen years and wrote the widely read Board Cafe newsletter -- and in the current issue of Blue Avocado she offers five concrete, and somewhat contrarian, ideas to help nonprofits get through these tough times:

1. Declare an emergency.

2. Schedule worrying for later.

3. Do less with less.

4. Ask for help, even if you don't know what would help.

5. Call a community summit on your behalf.

You'll have jump over to the Blue Avocado site to get the rest of Jan's excellent advice. But before you do, I have to share her parting thoughts from the current issue:

A colleague once told me his "Four Commandments": a) Show up. b) Pay attention. c) Do your best. d) Let go. What more can any of us do, really?

What more, indeed.

-- Mitch Nauffts

2009: A Few Predictions

Crystal_ballThe Economy: Those expecting a quick rebound will be disappointed. The Fed will use every tool in its arsenal to re-inflate the massive credit bubble it allowed to form over the past twenty-five years -- to no avail. Housing prices will continue to fall on their way to non-bubble levels of affordability, while credit to all but the most credit-worthy will remain constrained. Government-reported unemployment will jump to more than 9 percent, consumer confidence will fall further, and, after an early year bounce, equity markets will re-test their November '08 lows by the end of March. After falling by as much as 25 percent from where they opened the year, the Dow, S&P and Nasdaq will all end the year down 10 percent, with investors thankful it wasn't worse.

Politics: President Obama will sign legislation creating an Office of Volunteer Service within three months of his inauguration. After an initial burst of excitement, enthusiasm on Nonprofit Street will turn to disappointment as it becomes increasingly clear that there is no money to fund expanded nonprofit initiatives.

Congress will leave the payout rate for private foundations unchanged at 5 percent but will look closely at imposing new rules on tax-exempt nonprofit hospitals and higher education endowments. Any legislation intended to alter the status quo will be tabled as the economy deteriorates and Congress turns its attention to more pressing concerns.

Fundraising/Giving:  2009 will be a batten-down-the hatches kind of year for nonprofits. Giving (adjusted for inflation) will be flat, with individual giving up slightly (thanks to the intergenerational transfer of wealth), foundation giving flat, and corporate giving off 2 percent to 4 percent. The number of nonprofits will level off and fall slightly, while the number of foundations will increase (the intergenerational transfer of wealth again). Expect, as well, to see fewer dollars going to international causes/NGOs.

Environment: A series of extreme weather events around the globe will re-focus public attention on the issue of climate change. By the end of the year, the Obama administration will announce, in partnership with California, a dozen New England and Mid-Atlantic states, Google/Google.org, and half a dozen major foundations a comprehensive plan to address it.

Media: Revenues and readership for print newspapers will continue to fall. The New York Times will sell the Boston Globe, the Los Angeles Times will be sold to private investors, and bankruptcy court will take the Chicago Tribune from Sam Zell.

The mass audience will continue to fragment as social media platforms target ever-smaller niche audiences. Facebook will expand its dominance in the social media space among boomers, Gen Xers, and professionals, but cash-flow problems will force founder Mark Zuckerberg to sell a major stake to a mainstream media conglomerate by the end of the year. XM/Sirius Radio will file for bankruptcy. Yahoo will throw itself into the arms of Microsoft, Twitter will be bought by Google, and Apple will begin its search for a new CEO.

Blogs will become an increasingly important organizing/communications tool for nonprofits. For all their talk of transparency, major foundations will be slow to join the conversation.

Okay, nothing earth-shattering here, but then I'm new at this. What about you? What do you think 2009 has in store for nonprofits, foundations, and the country? Don't be shy.

-- Mitch Nauffts

As the New Year Begins...

January 04, 2009

Kind of says it all:

Pessimism_2

(Hat tip: Prieur du Plessis, The Big Picture blog)

Congrats, Michael!

January 03, 2009

Congratulations to regular contributor Michael Seltzer for authoring a post that became the basis for one of the five most popular Give & Take (Chronicle of Philanthropy) items of the year. Michael's post, "When Wall Street Catches a Cold," appeared in PhilanTopic on January 22 and, as the Chronicle notes, was one of the first posts anywhere to talk about the effects of a prolonged economic downturn on nonprofits and the nonprofit sector. As Michael wrote at the time:

Nonprofits could feel the impact [of a downturn] in a variety of ways:

  • Individual companies, especially in the financial sector, are already reporting major hits to their profits. When profits are down, corporate charitable giving declines.
  • When markets decline, returns on foundation endowments -- and, eventually, grantmaking budgets -- follow suit.
  • When unemployment and economic insecurity rise, individuals cut back on their charitable contributions.
  • As economic activity slows and tax receipts fall, local and state governments are forced to cut social services and expenditures on health and education.

All of which came to pass. In his post, Michael suggested that nonprofits were accustomed to wearing their "belts snugly." But, experienced sector vet that he is, he also offered plenty of advice and food for thought in the months that followed. Here's a sampling of his posts from the year just past:

Thanks, Michael. Looking forward to more advice and wise counsel in 2009!

-- Mitch Nauffts

Hasta La Vista, 2008!

January 02, 2009

Nice graphic from yesterday's New York Times. The title says it all.

(click for larger image)

01numbersgobig_4

And here's a link to the accompanying article.

Quote of the Day (January 1, 2009)

January 01, 2009

Quotemarks"Apart from 'cleaning up Dodge', so to speak, and from issues of collective character-and conscience-in-office, I worry that the avalanche of troubles already ongoing will overwhelm Mr. Obama and his people. It's also well worth worrying whether they will pursue policies similar in kind to the ones pursued by Bush, namely throwing money at everything and anything, and it sure looks like they are planning to do just that. I am especially concerned about an 'infrastructure stimulus' project aimed at highway improvement at the expense of public transit. This would be the epitome of a campaign to sustain the unsustainable. We need to begin planning right away for a transition away from automobiles, not in order to be good socialists but because Happy Motoring is at the core of our unsustainability trap. The car system is going to fail in manifold ways whether we like it or not, and it will fail due to circumstances already underway. For one thing, it will cease to be democratic as the remnants of the middle class find it impossible to get car loans, or pay for fuel, or insurance, and that will set in motion a very impressive politics-of-grievance setting apart those who are still able to enjoy motoring and those who have been foreclosed from it. Contrary to what you might make of the current situation in the oil markets, we are in for a heap of trouble with both the price and supply of petroleum. And there is no chance in hell that any techno rescue remedy to keep all the cars running by other means will materialize...."

-- James Kunstler, curmudgeon, author (The Long Emergency, The Geography of Nowhere)

Quote of the Week

  • "[L]et me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...."


    — Franklin D. Roosevelt, 32nd president of the United States

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