Musings on nonprofit management, funding, fund-raising, technology, and policy from Peter Brinckerhoff.
Thursday, June 25, 2009
Online Donations and Payments
No more, and Wild Apricot, one of my favorite blogs, has broken down the great options, whether from Google, Amazon or other online payment processors. Here's a terrific post on online payment options, and then a second one on Amazon's new program for nonprofits.
Finally, a big shout out to the nonprofits who made the list of the Cone Nonprofit Power Brand 100, particularly Goodwill Industries International, on whose board I sit. Goodwill came in at #5 on Cone's list, but being on the list at all is a big, big deal.
Saturday, June 20, 2009
Listening to your customers (and line staff) in a recession
It's from the New York Times and discusses how big retailers are shifting strategy in the recession.
I know, I know, who cares, right? OK, trust me, read the article. You'll see these organizations listening to line staff (something they should have been doing for years) making small changes that appeal to customers (the anecdote about dress demand in Pittsburgh and Salt Lake City), or reducing "seasons" since people are buying what they need now, and not buying ahead. Small changes that make a big difference.
The other issue from this article to remember is that the stores are making long put off changes since they assume that, even when the recession is over, the new normal will not be like the old normal.
Wednesday, June 17, 2009
Building better websites
Thus a key to nonprofit success is a great website. But where to start?
TechSoup (again) to the rescue. Here's a great article on Designing or Redesigning an Great Nonprofit Website.
Every nonprofit manager should read this, and then look at your own website!
Sunday, June 14, 2009
Hidden in the new 990...
Oh, if you are the person who emailed me from the room in Hartford itself--my email crashed at the airport and I lost my inbox (actually two YEARS worth of inbox!). So, it's not that I'm ignoring you, it's that I don't have your email--shoot me another one and I'll get back to you.
Friday I was in Dallas, for a second go round with the American Dietetic Association's annual Leadership Development Conference, talking about Generations. Again, enthusiastic people and fun questions.
Speaking of follow-up questions, I got one yesterday that led me to something we all need to remember-that the new IRS 990 form is not just about the form. It also requires some updating of many nonprofits' management and governance practices. Here's a great article on that topic. If you wait to get at these issues until you are filling in the form at the last minute, you may have some problems.
Monday, June 08, 2009
Friday, June 05, 2009
Good day, good ideas
One theme (starting with Kim's opening address titled, "The Best Of Times") that I completely agree with is that the current economic downturn is an incredible opportunity for nonprofit leadership to reshape our organizations to be stronger when the recession ends. This is so, so true, if we think strategically, and not simply about the day to day problems we have. I know that's easier said than done, but it's still true.
Many thanks to everyone at the Center, but particularly to Ann Marie, Peter, Cathy and Gina. You made my time there very easy and enjoyable.
Sunday, May 31, 2009
Our rules are pretty straightforward. First, we want to build a set of innovation engines that are replicable, scalable and usable in a variety of environments.
Second, none of the ideas (or innovation engines) that come through our project will need attribution--they will be open source and free to everyone.
Third, we're going to use the best in crowdsourcing to generate more innovation. This, to us, means at the local organization, community and national level.
Fourth, we don't care where the ideas come from: from the nonprofit world, the business community, students, private citizens. It doesn't matter.
The problems nonprofits face are hard ones to solve, so we need as many neurons as possible on the job to come up with new ideas and new approaches.
In related information, take a look at this article from on Lessons from Nonprofits on Innovation, then spend some time reading this article on crowdsourcing high end solutions from Wired. The first makes me happy to see someone acknowledge the innovation in our field, and has some good rules for all of us to follow. The second is flat awesome, with LOTS of lessons on the wisdom of crowds.
Expect more on innovation here soon, and often.
Monday, May 25, 2009
Lest we forget
It's easy to just go on with our lives and forget those who do, and who have, served us so well. And we should never forget. So, two things.
First, today's highlighted nonprofit is the Wounded Warrior Project. A terrific program started a few years back to fill the (inexcusable) holes in care for our vets. Great, great stuff and worth your support.
Second, if you don't already, start doing this, and not just today: when you see someone in uniform, walk up and say thanks. They appreciate it more than you know.
Sunday, May 24, 2009
If you only have time to read two books this summer...
This includes, for me, fiction and non-fiction, since I try to read both in about equal amounts. Regular readers know I ran a book club for CEO's and one for Emerging Leaders for years and recommend such clubs highly as methods of personal growth as well as organizational leadership development and improvement.
We all know that, of all the summers of the past few years, nonprofit staff have less time than ever to read; we've cut back employees and are scrambling to fill funding holes. But even in a financial crisis, we need to be thinking about new ways of doing things, of methods to improve employee morale, of how to grow our next generation of leaders.
So, of the more than 50 management/leadership books I've read in the past three years I want to give you a short summer reading list. One book is for you, and one for your organization. They are both from proven authors who have a long, long reading list if you like the book listed here.
For Your Organization: The Three Signs of a Miserable Job, by Pat Lencioni
This book is a business fable (like all of Lencioni's work) and thus an easy read, even for people on your team who don't like books, or are severely time limited. There is more organizational improvement wisdom here in than in most other books ten times the length. Actually, if you only read one book this summer, make this the one.
For You: If you are a Senior Leader (CEO/COO, VP): Developing the Leaders Around You
If you are an Emerging Leader: Developing the Leader Within You
both by John Maxwell. All of Maxwell's books are excellent, with good writing, well thought out examples and diagrams, and good solid leadership philosophy behind them.
Enjoy your reading, and if you have other books you'd like to share with nonprofit leaders here, post a comment.
Saturday, May 23, 2009
Mission-Based Management 3.0
The first change was to add a tenth criterion to my Characteristics of Successful Nonprofits. Readers of either of the first two editions will remember that these characteristics laid the foundation for the rest of the book. The new characteristic, listed second after "A Viable Mission" is "Ethical, Accountable and Transparent". In the chapter on this subject I talk about not only the expectation for transparency and high values, but also how ethics, accountability and transparency begin inside the organization, between staff, between volunteers and between staff and volunteers. Placing this second after Mission, and before characteristics dealing with board, staff, marketing, technology, controls, strategy or finance, is intended to emphasize the importance of these issues in today's nonprofits. As I say in the book,
"The mission is why you do what you do. Your values are how you do it."
The second change is to ramp up the chapter on technology, and not just the content to catch up to changes since the Second Edition. Rather, I try to convey my deeply held belief that the future of philanthropy is in the successful merging of technology and mission. Thus, instead of just getting better at tech, instead of accepting that tech is here to stay, I labeled this characteristic
"Embracing Technology for Mission." And, that's what its going to take.
More on both of these issues in future posts, and I'll be previewing the entire book in posts starting around Labor Day.
Speaking of holidays, if you are here in the US, enjoy yours and remember those who have, and do, serve us so well.
Thursday, May 21, 2009
A great idea worth our support
I read people's attitude about the recession and their nonprofit as very concerned but not terrified, as they were in January. I can't tell if this is because the talking heads on TV are working so hard to find a light at the end of the tunnel, or simply because the severe downward spiral seems to have slowed.
What nonprofit managers are in constant need of, however, is good people, for their boards, their staff and their volunteers. I'm going to start a series on finding and retaining good people here over the next few weeks, interspersed with other postings, as I get back on a more regular schedule.
Let's start with a biggie. Jobs for Change "seeks to spark a nationwide movement toward careers in the nonprofit, government, and social enterprise sectors." This is a project of Change.org, and no matter what your political affiliation, deserves a look and careful consideration. There are hundreds of job listings in the nonprofit sector, some good advice for people who are interested in working in our sector, and the cost of listing a job is currently free and will eventually be less than Monster.com.
The site is currently in beta, so check it out and post any ideas you might have on how to make it better. Having a place where the best and brightest can find a way to work for the common good is awesome, and I wish them huge success.
Monday, March 30, 2009
Great new information on what makes a good website for donations
Donor Usability on your website. A must read for anyone who is seeking to increase online donations...and who isn't?
Thursday, March 12, 2009
The people were predictably great, and their stories fascinating. In general, Australia has not suffered as bad an economic spin as the US and Europe, although today it was announced that the AUS unemployment rate was at a 4 year high....still nothing like our 20 year high in the U.S.
One significant difference here is that nonprofits here hardly ever require their board members to do any significant fund raising (good for them). Other than that, their issues sound surprisingly familiar.
So, Chris and I are off tomorrow to Auckland to see our daughter for 10 days. Our sons will arrive Saturday. It will be good to be together.
Thursday, March 05, 2009
I'm really looking forward (professionally) to meet nonprofit staff and board members from both countries and to hear their stories and challenges.
Personally, I'm looking forward to seeing Caitlin, and to having her brothers down with us as well. It will be a fun time, just being together. And, I've never known anyone who traveled to NZ or AUS who didn't both love the people in both countries and have amazing stories to tell.
At least some of mine I'll share here.
Tuesday, March 03, 2009
What to do now, Part V
In this final post, we'll look at a list of leadership questions. As the leader of your organization in a crisis, you have to make sure you're doing the best possible job of leading, not just being there. Here's my leadership checklist.
1. Am I asking the hard questions?
You need to be asking questions such as these: "Am I looking at all possibilities, even those I don't want to contemplate, such as merger, closing a program, laying off staff? Am I questioning things that have been assumed for years, like our business model, or if there's another nonprofit that can do what we do better in this situation?" These are hard, hard questions, but in a crisis, everything is on the table to keep producing mission.
2. Do I have the information I need?
Probably not enough of it, or as much as you would like.....and here's the rub: you need to share information, ask everyone their opinion (see below) but then it's your job to decide--remember in the last posting I said you needed "drop dead dates" after which you act? Well, waiting for "just a little more information" is often the death of organizations in crisis. Get as much information and input as you can, but on deadline day--decide.
3. Am I sharing information widely?
John Chambers, the CEO of Cisco has this great line---"No one of us is as smart as all of us." While I cautioned you earlier to only share what you KNOW, not what you THINK, getting as much input into your key decisions as possible will only help. Don't take all the responsibility on yourself. Ask for others' ideas.
4. If staff take a pay cut, am I taking a bigger one?
In some cases, you may go to staff and ask for everyone to take a 5 or 10 or 15% pay cut to save jobs. If that happens (and it's really tricky) and you possibly can, take a bigger cut yourself. I know everyone is in a different place financially, but the leadership value of this is unbelievable. And here's the best part: Don't tell anyone. Why? In most organizations, they'll figure it out. And if they don't you'll know what you did, and it will help assuage the guilt most ED's feel when they ask people who are already probably underpaid to take even less. Think about this.
5. Am I putting mission first?
As I said when we started this series, surviving a financial crisis is not about having the least change, the lowest job loss, the smallest disruption...it's about providing the most high quality mission possible AND coming out of the other end of the crisis in the best shape possible to continue doing that. I often hear boards or ED's say---"No matter what, we don't want layoffs". Well, neither do I, but if 80% of your expenses are related to your staff......
Mission first. Use it as your beacon, your rallying cry, your ultimate metric.
6. Am I listening to everyone?
Remember John Chambers, and then remember this: There's a big difference between listening and waiting your turn to talk. Get out among your staff, let them have opportunities to talk, share, ask questions, and focus on them. Don't be checking your crackberry, or gazing off into space. Listen. They need that now, and guess what? You might hear a great idea!
7. Am I taking care of the leader?
It's really easy to stop exercising, or eating right, or sleeping at night. Although it may seem egotistical and self-centered in a crisis--you have to take care of you. That's a decision that can save your mission--so schedule you time, however it works the best. For me, in the two horrible financial upheavals I've gone through, what helped me was always one of two things-going for a run and being able to clear my head, or spending time with my kids, and having to focus on them. What works for you?
Use this checklist as you work your organization through the coming months. It will help you make sure you're doing the best you can in a tough, tough time.
Monday, March 02, 2009
Are you Visible and Transparent?
Of course, when any donor looks at you, you want to have nothing to hide. You need to be as transparent as possible....letting people see you fully, and in the best possible light. It's kind of like having company--you want people over to your house, but you also want to straighten up a bit before they arrive.
This month's Mission-Based Management Newsletter is about Visibility and Transparency. Take a look for some ideas.
Tomorrow, we'll talk about the Leadership Checklist in the fifth installment of our series on What to do Now?"
Sunday, March 01, 2009
What to do now, Part IV
Most readers will say "FINALLY!" since we all want to start with tactics in a crisis. As managers, CEOs, Executive Directors or board members, we want to fix stuff and fix it now. But, as we noted in the first three parts of this series, you have to stop, breath, think through your strategy first.
That was then...and this is now, so let's talk tactics. Here are my things to consider doing once your strategy is in place.
1. Form a task force of board, staff, and even an outsider or two that is charged with thinking through the crisis. This group is formed now (not earlier) since the strategy evaluation should be done by the entire board.
2. Run cash flow projections every week. I'm assuming you're taking a (perhaps big) financial hit. Cash=Oxygen. Run a six month cash flow projection (Receipts versus disbursements) on a two week basis revised every week. So, if you do this on a spreadsheet, you'd have two columns for each month (May 15, May 31, June 15, June 30) and lines for every kind of receipt and every kind of disbursement. At the bottom, you'd have a running "cash on hand" total. I understand that the further out you get in time the less accurate the cash on hand will be, but what you're looking for here is trends and early warnings. In terms of tactics, this is the single most important tool you'll have. Do this.
3. Inform the staff, board and service recipients early and often. Communications is key in a crisis. Tell people as much as you can as early as you can, but only what you KNOW, not what you THINK, fear, or have heard through the grapevine. Facts, not conjecture. If you say "Well, we don't want to, but there's a small possibility that we may have to cut salaries or staff down the road" in an effort to be upfront with your employees, what staff will hear is "WE'RE ALL GOING TO BE FIRED TOMORROW!!!!"
The rumor curve is your worst enemy. Just the facts. ma'am.
4. Read your contracts. Actually, have the task force ALL read ALL your contracts. Find out what your lease says, your funding obligations are, etc. Know where you are flexible and where you aren't. Can you cut your lease or if you do is there a big penalty? What if you end one program that is city funded....does that impact funding for a second program?
5. Develop best-case, worst-case, middle-case scenarios. And be conservative.
If the best case shows you need to cut staff or programs now, do it. Now.
In bad situations you have to have deadlines (commonly called "drop-dead date"--a terrible term, but there it is) that are something like "If we don't have a check from funder x by this date, then ____ happens." As you develop these, you have to stick to them---and that's hard. We all want just a bit more time, a little more information. But waiting will only make things worse.
Trust me-I've been in this situation and waited far, far too long.
6. If layoffs are contemplated, check state labor laws. If you are like most nonprofits, with more than 80% of your costs related to staff, some cutbacks, either in FTE's or salaries, are probably inevitable. Thus, you want to know what your limitations are, and what's the best practice in the areas of layoffs, or salary cutbacks. Remember: while "white-collar" workers may be able to take a % cut, you can't cut a minimum wage (or living wage) worker's pay.
7. Communicate your plans with vendors and creditors. Once you have a plan, let the people you owe, and the people who sell you things (landlords, office supply firms, banks) know your plans. If you have to stretch payments, let them know, but....let them know. ANY creditor would rather hear that you are going to pay something every month (even if its much less) than not hear anything at all. Communicate. Let them know you have a plan.
8. Lead optimistically. I know you're concerned, scared, terrified, exhausted and probably all of those emotions at least ten times per hour. But you have to lead now. And, leading optimistically does not mean being a Pollyanna. Telling staff:
"I know this is scary. I'm scared too. But I believe in our team, I believe in our mission, I believe in all of you and we're going to get through this the best way possible." ,
is not Pollyanna. And, be around to talk to staff, out where they are. Don't hide behind your open door policy. Let them see you, talk to you. You're the icon now, so lead from the front.
Speaking of leaders, in our final post on this topic, I'll give you a leadership checklist.
Sunday, February 15, 2009
Taking Credit cards online
Here's the skivvy from Techsoup.
#4 in a series of 7: TechSoup's special series of Nonprofit New Year's Resolutions continues with another common challenge and a technology solution. Since many of you are making commitments to go green in 2009, we're including simple ways to be more environmentally-conscious without breaking your budget.
Boost Donations by Accepting Credit Cards
When someone calls your nonprofit, signs up at your conference, or stops by your charity event, do you make it easy for them to donate?
Your nonprofit or public library might think it can't accept credit card payments because of the cost. Or, you might be confused by all of your options for credit card processing, especially for donations that happen in-person or over the phone. Thanks to a generous discount from NPC, however, credit card processing is now within your reach and TechSoup also has articles to help you.
When you place a request at TechSoup, your organization can access discounted rates on credit card processing hardware and services from NPC. There are no monthly minimum transaction fees and you can freeze and re-start your service from month to month, a great benefit for minimizing your service costs. Your organization can also rent (at reduced rates) or purchase (at wholesale costs) card readers for in-person transactions.
Combined with your other fundraising efforts, this discounted offering from NPC could be just what your organization needs to attract new donors and more contributions this year.
DISCOUNTED PRODUCT TO HELP YOU: For a $30 admin fee, eligible nonprofits and public libraries can access NPC's reduced rates -- on both processing services and equipment -- only available through TechSoup. (Eligibility details)
GREEN BENEFIT: Holding a large fundraising event, while fun, uses many natural resources: electricity to light the banquet hall, gas for everyone to get there, and water to wash all those dishes. Make fundraising easier for you and the environment by scaling back on big events and letting donations come to you in the form of credit card contributions. Find additional tools and tips for greening your nonprofit through TechSoup's GreenTech Initiative.
LEARN MORE AT TECHSOUP: Learn more about your options by reading TechSoup's articles A Few Good Methods for Processing Credit Cards and Getting the Best Prices for Processing Credit Cards.
Monday, February 09, 2009
What to do now, Part III
To refresh our discussion--you have to start with strategy in any crisis. Stop, breath, think. Then, and only then, do. And in doing, start with the big issues, the big questions. I know you want to get down in the weeds and fix stuff....but strategy first. Here are some actions to begin with:
1. Review your mission and organizational values. What do these core guiding documents have to tell you about your path from here? Going back to mission, reminding everyone of what the point is, that's the place to start.
2. Review your strategic plan. What does it say about priorities, SWOT, etc.? Use the tools you've already developed. It will help you avoid knee-jerk responses.
3. Review your marketing plan. Who are your priority service recipients, your most important funders, your key donors? Again, this tool should tell you.
4. Talk to peer organizations. Are there group responses to your cuts that are appropriate or useful at this point? And, what are other groups doing to cope?
5. Talk to your state trade association or association of nonprofits if you have one. Again, what are other organizations trying to weather this storm.
6. Big question once those are answered: Given what you know, and what you predict, is there a need for long-term, strategic restructuring? This might mean casting off services (hopefully to another organization), or partnerships, or sub-contracting certain functions (payroll, HR) out, or even partial or full merger. Now is the time to start thinking about this, or to revisit it if you've considered it before. A crisis motivates boards and staff to do things that have been put on hold in the past.
Remember, mission, mission, mission. The point of any actions to take has to be to do as much high quality mission for as many people for as long as you can.
In Part IV, we'll talk tactics, and then in Part V look at a leadership checklist.
Hang in there.
Saturday, February 07, 2009
Good website challenge
Wednesday, February 04, 2009
Different Generational Cultures
"If your organization is like most nonprofits, you've been working on diversity for a long time. You've tried to make sure that your staff, your board and your non-governing volunteers look like your community. For some nonprofits this has been a pretty easy accommodation to better practice, while some are still struggling. But diversity is good: It gives us a better range of perspectives, a richer set of ideas, and a closer connection to the community we are in business to serve.
So, here's the question: what about diversity by age? Fact: Most board members in the U.S., Canada and the UK are Boomers, but our generations served range from Greatest Generation to post Gen@. Are your board, your management team, your non-governing volunteers representative of your community in terms of age? If not, why not? And, to be fair, you may be asking, who cares? It's just age, not ethnicity. What's the big deal?
The big deal is this: our different generations are really different cultures, so different that we see life at its most basic levels differently, we attack problems differently, we seek solutions differently, we manage differently, we look at work and the rest of our lives differently. And, as much as those of us who are Boomers hate to admit it, every day we're a smaller and smaller percentage of the workforce as more and more younger employees come on board. If we want to lead well, we have to understand what it takes to lead younger employees. If we want to attract donations, volunteers, board member from younger generations, we have to understand what motivates them and to do that we need their perspective; we have to embrace age diversify....."
To see the entire issue, including Marketing and Tech Tips on the subject as well as recommended reading, go to www.missionbased.com/newsletters/feb09.htm.
And, if you like the newsletter, you can scroll down and see four years of past topic-specific issues and/or subscribe for free.
I'll get back to the "What to Do Now" series next posting.
Tuesday, February 03, 2009
What to do now, Part II
I'm working on a third edition of Mission-Based Management, which was my first book in 1993 and had a second edition in late 2000. My preface (and lots of the contents) talk about being a nonprofit in a booming economy with no federal deficits in sight, etc., etc., hahahaha, sob.
Of course there are a lot more changes than just that, particularly in technology, marketing and best practices (think SOX). But the big change is economic.
As an aside, I'm nearly done with the full rewrite, then I have to read it all again word for word, edit one last time and then I ship it to Wiley, and you get to see it in nine months to a year, after THEY edit it, I see it again, they set it, I see it again, and then they actually print the thing. As you can imagine, after all this back and forth, I'm so sick of my own words I never actually look at any of my books after they come out for at least a year.
But, most importantly, the writing and review has shocked/ saddened/appalled/terrified me as I see how far down we've come since 2000.
So let's get to it, and talk more about what you can do in the economic downturn. In Part I, I showed you signs of trouble that could be lurking in your nonprofit. In this post, we'll talk about initial strategic actions that should be taken, and then in Part III we'll look at some more strategic responses before we get to tactics.
Strategy first, though. Yeah, yeah, yeah, you say. Strategy, Schmategy. I want to DO something, not just ponder.
I understand. As managers, and particularly as CEO's we are action oriented. We want to fix what's broken, get our hands on the problem and wring its neck, not sit back and think. But just as our management level jobs usually don't let us provide direct services, (and some of us miss doing just that), our responsibility in a financial crisis is to think first, then act.
Hence the strategic thought process outlined here.
1. How bad is our projected (or immediate) shortfall And, how bad it is really? The italics are there to underscore a key problem--people tend to believe what they hear and rumor abounds when things get tough. You hear from a peer CEO that the state is cutting everyone 25% and before you check it out with the state (and find it's "only "15%", you go to your board and staff in a panic.
Don't. Think like a journalist--it's not true until you have confirmation from two sources.
2. Is this shortfall short term or long term, systemic or incidental. Many arts charities in New York got a lot of their funds from Lehman Brothers, both the firm and the partners. The firm is gone and most partners are unemployed. That's a systemic long term hit. Was your charity golf tournament sponsored by the now defunct Circuit City? That's a long term problem. A large donor moved to warmer climes and you can't find her? More a short term, solveable problem.
Having said this, do not, repeat do not fall into the trap of believing that our current economic mess is short term. It's not. This recession (let's hope we don't get to depression) will last years, not months. SO you've got to think long term for most things.
3. Is your organization's viability at risk? Most organizations can cut back (if painfully) 10%, 15%, perhaps even 20%, and still provide some services. But at some point, and only you know where that is, it becomes impossible to for you to provide even minimum services and pay the bills. You lose too many staff, or cut too many services and you go into a domino decline. So, ask this question now. If the answer is truly yes, then the motivation to act now is even higher for everyone. Paul Light has said that at least 100,000 nonprofits in the US could fail this year and next--don't let yours be road-kill.
4. Are services at risk? This is a subset of #3. Will a 10% cutback cause you to eliminate any services completely? If so, you need to look at your strategic and marketing plans and see what they say about priority markets and established high priority mission.
5. Are there legal and contractual responsibilities in play? In some cases, eliminating service X means that you are no longer meeting the requirements of the contract for service Y or Z. Some contracts and grants link capabilities, accreditions, etc. Some disabilities groups have CARF accreditation, an expensive and time consuming process (and one that I fully support, by the way).But in a downturn, it's easy for someone to say--"Let's cut CARF!" and save some bucks. Except that having and maintaining CARF is a requirement of many government funds. Check the contracts you currently have now. Refresh your memory about what's in those contracts, leases, and other obligations.
Think these things through carefully and with your key staff and board. In Part III, we'll look at some strategic responses, then we'll move in Part IV to tactics.
Friday, January 16, 2009
What we lose in a downturn......
Actually, we do predictable things. I've been called in to help dozens of nonprofits in financial crises over the years, and when I get there the process of cutting is usually well under way.
Here's what normally goes first:
1. Travel and training. Easy to cut. No services get hurt, and nothing is lost--at least that's the theory. As I said in my last post, when you cut training, you hurt services, staff morale and staff retention all in one nice bundle. Cut travel? It depends on the organization, but training? There are so many inexpensive options. Look for choices before you cut this line.
2. Innovation. We certainly don't want to try anything new, since it might fail and we don't have the cushion we did when finances were better. Again, bad idea. Lack of regular innovation (some of which can be very cheap) is a sure way to lose the people you serve, donors, funders, volunteers and staff, and certainly the best volunteers and staff, who thrive on new challenges.
And, while we're on the subject of cutback mistakes, I always seem have this conversation with the boards and ED first when we start working together during a fiscal crisis:
Them: "We want to do everything we can to avoid cutting staff." (note: this sentence nealry always comes before anything else, including mission.)
Me: "Really? Why?"
Them: (looking at me like they've made a big mistake in securing a consultant) "Why? Because they're great people, doing great work. We're loyal to our staff. Cutting staff has to be the last thing we consider."
Me: "Well, it seems to me that the first thing and last thing you should be concerned about is the people you serve, not the people you employ. If you're like most nonprofits 80-90% of your expenses are related to staff. If you have to cut back more than 10% of your expenses, some of that HAS to be personnel. I have no doubt your employees are great, and dedicated, and hard working. But unless you're a jobs program....well, you're not a jobs program."
Them: (unhappily) "Oh."
Understand, I've been an exec, had financial crises, and avoided cutting staff until far, far too late. I wanted to save everyone, too. But in a service organization we usually can't.
We'll talk more about this in the "Tactics" post in a few days. But suffice it to say here that you are in the business of providing mission first, last and foremost. Keep that front and center as you confront your financial challenges.
Thursday, January 15, 2009
What to do now? Part 1
Times are tough, or worse, for many nonprofits. I just finished the current issue of the Chronicle of Philanthropy and was depressed all over again. Then I read through the economic news on Google News and felt worse. As I've said before here, we're in for a loooonnnngggg haul. My longstanding view is that, at best, things will only get worse through 2009 and that we may see a leveling in 2010, with a beginning of a recovery late that year or early 2011. At best, could be worse.
So, if you aren't already cutting, strategizing and re-thinking, you need to be. The economy is NOT a short term problem.
Today, we'll start with organizational signs of trouble for nonprofits. Next post, we'll look at strategic things you can do.
Signs of trouble are things that I see in my consulting role that are indicators of less than optimal performance or warning signs of impending crises for any nonprofit. We start here because you want to make sure that your basics are in shape for the downturn for your nonprofit.
Look for these issues and fix any you can now:
No (or insufficient) financial reporting. Sounds dumb--of COURSE you're going to report, right. You'd be amazed. Anyway, keep the financial reports coming, and definitely develop a six month cash flow projection and update it every week. Every WEEK, not every month. More about this when we get to tactics.
Excessive staff turnover. This is less of a problem in a steep recession/depression, but look at organizations like FedEx. Everyone took a pay cut rather than lay people off. Hmmm.
Excessive board turnover. You need to keep your board on board now. So, keep them informed, use them as resources. Don't scare them off by lack of information or involvement.
No new programs or methods of provision. Keep trying new stuff. Really. I know your dollars are tight, but keep innovating in program provision, fund raising etc. You may not be able to do BIG innovations, but you can still do lots of small ones. These keep staff energized and show the community you are moving forward.
No regular and repeated Asking. You gotta ask. Keep your staff, board, funders and the people you served involved. Ask them what they want, ask them for ideas on how to weather the storm (notice I did NOT say "cut back"), ask what's critical to them about your organization. Ask, ask, ask. It's cheap and essential.
No Staff continuing education. Ooooh, easy to cut right? Non-essential, right? Wrong. When you cut staff training you cut the quality of service, reduce staff morale, hurt services. I know you can't send everyone off to a conference, and perhaps not anyone can go out of the area to a meeting this year or next. But there are still book clubs, local training, online options, etc. Get creative, and DON'T stop pouring new ideas into your people's brains.
Out-of-date internal policies. I know, I know you're in a crisis. But life (and good management) goes on. Make sure you regularly update your HR, financial and QA policies. These are essential and help prevent distractions and problems down the line. You're keeping your insurance, yes? Keep your policies up-to-date, too.
No Strategic Plan. Again, I know you're in a crisis. But the most important time to have a strategy is now, not when thing. More on this in the next post when we talk about strategies.
Little or no sharing of information internally. Regular readers know I'm a zealot about this. Use all your staff's minds, not just some of them. Same with your board and volunteers. To do that you HAVE to share information, like budgets, plans, contingencies. You need people's ideas more than ever. You need them to have a sense of contribution to the problem. No matter how smart you are, you don't have all the ideas or all the solutions. As John Chambers, CEO of CISCO says: "No one of us is as smart as all of us". I could not agree more. We'll come back to this in our tactics post.
Inadequate marketing materials/website. Focus focus focus in your materials and website. Too big an issue to cover here, but suffice it to say that this is a great time to look over your marketing materials and website and to make sure they focus on your current priorities, and that they reflect the current economic times.
Poor use of technology. See the last two issues above? They beg for better use of technology, as does more asking and more sharing of financial situations. USE your tech to help you through this. Whether with staff wikis to hone ideas, or special online editions of your newsletter to keep people informed, push your tech. Ask your young staff how to best do this--they know!
And, don't panic. Ever.
Scared? Me, too.
Panic? Not a useful leadership response.
You need to go home and scream into a pillow? Good. Do that. At home. Not at your nonprofit.
As my Dad (an engineer and attorney) used to say, "Don't angst, work the problem." I agree. The people we serve need us to FOCUS on still getting the most high quality mission out the door as possible.
Think about these, and next post we'll look at some strategic responses you can start with.
Tuesday, January 13, 2009
But, in general, the early prognosticators have been wrong, primarily regarding their assumptions that Boomers would retire on schedule at 60 or 62 or 65. We want to work forever...and then there's the economy.
Over the weekend, a couple of friends and I had in interesting g-chat about this. We all agreed: in terms of a need for more talent than there is a supply: That's SO 2008. This is primarily the case because of the economic meltdown. We spun the issue for a bit and came up with these conclusions:
First, most Boomers who were thinking of retiring in one, two or three years have put that on hold since their 401k's have shrunk 30-50%. The few exceptions are people who have a working spouse, a spouse with an actual pension, or are independently wealthy. Thus, many of the nonprofit management teams that were heading for the door are (to mix metaphors) hanging in for another lap or two around the racetrack.
Second: The economy is ruthless on new and recent grads. Lesson? We in the nonprofit sector may be able to get great young talent that would have gone to the for-profit world if the economy were healthy.
Third: Those of us who do have job openings (and some nonprofits do) should remember: It's an employers market--you can get better people (of all ages) for the same price. Lesson? Take your time when hiring. I talked to four HR people at medium to large nonprofits this week said they were averaging 75-100 resumes per week. Normal? 5-10 tops.
I know many readers are not in the position to hire: you're just hanging on. More about that in tomorrow's post, when I start a series of posts on Mission-Based Management in Tough Financial Times.
Sunday, January 04, 2009
Is transparency just for outsiders?
Transparency should not simply be for "outsiders". It should not stop outside the organization's door. It should also thrive inside your organization. Each staff member and volunteer, each committee and work group, every manager and senior manager should be open, available and accountable to others. Why? Because when organizations are internally transparent there is more engagement, more employee satisfaction, more good ideas thrown at problems, and less gossip and paranoia about what's going to happen.
You may think your organization is transparent now. If so, good, but answer the five questions below before you pat yourself on the back. You make be surprised.
1. In your last strategic plan update, did you share the draft plan with everyone in the organization (all staff and volunteers) for comment? (Same question for your marketing and tech plans, of course.)
2. Are all staff invited to every board meeting? (They should only be invited as observers, not participants.)
3. Are the minutes of every board and board committee meeting as well as every staff meeting available online in the staff section of your website?
4. Do you share your draft budget with every staff member to get input?
5. Do you encourage ideas from staff on how to improve service or solve problems?
If the answer to any of these questions is no, my question to you is why not? What do you gain by not sharing information? How does your organization, your mission, benefit by keeping information close to the vest?
Here's the truth: it doesn't......
For the rest of the newsletter and some tech and marketing tips, go to the full newsletter.