Just a quick break in the "What To Do Now" series of posts with a headsup about the February, 2009 Mission-Based Management Newsletter". The topic this month is about Different Generational Cultures. Here's some of the Management Tip:
"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.
Wednesday, February 04, 2009
Tuesday, February 03, 2009
What to do now, Part II
This is Part II of a series on what to do now. We'll get to that in a minute, but I have to mention the irony of my current big project, the one that kept me from posting for two weeks.
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.
STARTING QUESTIONS:
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.
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.
STARTING QUESTIONS:
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......
When things get bad financially in our nonprofit what is our tendency? What do we do when money gets tight?
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.
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
On my last post, I promised I would start a series on What To Do Now?, based on the chapter in my book Nonprofit Stewardship entitled "Stewardship in Good Times and Bad".
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.
Nervous? Fine.
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.
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.
Nervous? Fine.
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
Employee Shortage?
I just read an article by an exec search firm referring to the society wide need for more nonprofit "talent". Of course there has been much said (including by yours truly) about generation change in the nonprofit sector as well as in society as a whole.
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.
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?
The January Edition of the Mission-Based Management Newsletter is up, and in it I ponder a bit about transparency and how we tend to focus on just the "outsiders" and forget that transparency is for the people inside the organization as well. Here's a brief part of what I say:
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.
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.
Monday, December 29, 2008
Video, video and more video
I've been increasingly harping in my speeches to nonprofit managers about using video on their websites to tell their story. YouTube has brought down the required quality of video (which doesn't mean that you don't have to give it any thought), and that video is a, if not the, key communications tool to get and hold people's attention.
Like any other marketing tool, you need to focus your message: Who are you appealing to? Why? Is the video for donors, or to recruit the best volunteers? Does it tell you story to the press, or inspire people to seek employment with you. Just as in the case of written materials or website pages, one size does NOT fit all. Focus, focus, focus.
Here's a good starting how-to from Third Sector New England focused on fund-raising videos.
Here's another good article from TechSoup.
GoodEye Video works solely with nonprofits on video production.
Check out what's possible at DoGooderTV.
Cautionary tale: About four weeks ago, I was in Sarasota and met a staff member of the Dattoli Cancer Treatment Center. Went to their website and was really impressed with the story telling that the opening set of videos provides. Click on each of the vertical bars (such as "About our Team") to see more of the staff and hear about the center. For something like cancer treatment, this rocks: you see the people and hear more about the process. Bottom line: I loved it.
Then, I showed it to my two techie sons. Neither were impressed. One jumped on his iPhone to show me that when he went to the site, NOTHING came up---the page has not been configured to work with hand-held devices. My other son looked at the site and asked, how do I navigate AWAY from the video for more information? It was not intuitive for him.
Lesson: Make sure your video is useful on all parts of the web, and don't get so focused on its Wow! factor that you forget to make basic navigation easy.
All that aside, video rocks....why? It tells stories. About people. In ways that get to us.
Proof? Watch this: it's from an Easter Seals/ARC in northern Indiana. Tell me that this didn't affect you.
And, if you have videos you want to share, shoot me a note and I'll post them.
Like any other marketing tool, you need to focus your message: Who are you appealing to? Why? Is the video for donors, or to recruit the best volunteers? Does it tell you story to the press, or inspire people to seek employment with you. Just as in the case of written materials or website pages, one size does NOT fit all. Focus, focus, focus.
Here's a good starting how-to from Third Sector New England focused on fund-raising videos.
Here's another good article from TechSoup.
GoodEye Video works solely with nonprofits on video production.
Check out what's possible at DoGooderTV.
Cautionary tale: About four weeks ago, I was in Sarasota and met a staff member of the Dattoli Cancer Treatment Center. Went to their website and was really impressed with the story telling that the opening set of videos provides. Click on each of the vertical bars (such as "About our Team") to see more of the staff and hear about the center. For something like cancer treatment, this rocks: you see the people and hear more about the process. Bottom line: I loved it.
Then, I showed it to my two techie sons. Neither were impressed. One jumped on his iPhone to show me that when he went to the site, NOTHING came up---the page has not been configured to work with hand-held devices. My other son looked at the site and asked, how do I navigate AWAY from the video for more information? It was not intuitive for him.
Lesson: Make sure your video is useful on all parts of the web, and don't get so focused on its Wow! factor that you forget to make basic navigation easy.
All that aside, video rocks....why? It tells stories. About people. In ways that get to us.
Proof? Watch this: it's from an Easter Seals/ARC in northern Indiana. Tell me that this didn't affect you.
And, if you have videos you want to share, shoot me a note and I'll post them.
Saturday, December 27, 2008
Upcoming Newsletter Topics?
As we head into 2009, I'm planning out my newsletter topics for the Mission-Based Management Newsletter. Here's what I have so far:
January: Organizational Transparency Revisited
February: Different Generational Cultures
March: Organizational Visibility and Reputation
April, May, June, etc. ?????
As you can see, I've drawn a blank on good topics. If you go here, you can see all the past topics of the newsletter. Some, I revisit occasionally (like transparency, since SO much has changed since June, 2004). Others I tweak, drilling down a bit into the topic the second time.
Anyway, I'm looking for suggestions. Post them here in a comment, or email me. Any and all ideas will be considered---and be expansive in your suggestion: why do you think the topic is important and why now? I'd love to hear from you.
And, if you want to subscribe to the newsletter, shoot me a note at subscribe@missionbased.com.
January: Organizational Transparency Revisited
February: Different Generational Cultures
March: Organizational Visibility and Reputation
April, May, June, etc. ?????
As you can see, I've drawn a blank on good topics. If you go here, you can see all the past topics of the newsletter. Some, I revisit occasionally (like transparency, since SO much has changed since June, 2004). Others I tweak, drilling down a bit into the topic the second time.
Anyway, I'm looking for suggestions. Post them here in a comment, or email me. Any and all ideas will be considered---and be expansive in your suggestion: why do you think the topic is important and why now? I'd love to hear from you.
And, if you want to subscribe to the newsletter, shoot me a note at subscribe@missionbased.com.
Thursday, December 25, 2008
A Christmas role model....
Over the years, I've been highly critical of many funders, but none more than the United Way. To their credit, I've seen individual UW organizations make great, great progress in their work, and know many terrific people who believe fervently in the organization, but overall it seems like a business model whose time and come and gone.
That said, I am really, really impressed with this story
http://www.bizjournals.com/washington/stories/2008/12/22/daily44.html
You probably saw it somewhere, but the United Way of the Capital Area (DC) has cut their administrative fees so that the fund recipients can get more direct funding.
Good for them. That's what they should do.
Now, what other funders are willing to match the United Way's focus on mission? Who's going to step up?
That said, I am really, really impressed with this story
http://www.bizjournals.com/washington/stories/2008/12/22/daily44.html
You probably saw it somewhere, but the United Way of the Capital Area (DC) has cut their administrative fees so that the fund recipients can get more direct funding.
Good for them. That's what they should do.
Now, what other funders are willing to match the United Way's focus on mission? Who's going to step up?
Wednesday, December 24, 2008
Green for the holidays...
No, not money--I know your nonprofit needs more green of that kind. But since we are in the middle of the holiday season, I thought I'd post some ways your nonprofit can save money and give a gift to everyone: greening your nonprofit.
This is, like so many things, the right thing to do and the smart thing to do.
Example: Chris and I moved into a 1992 vintage house in August of '07. Lots of energy drain due to poor maintenance from the prior owner. We've done the normal stuff--changed to florescent lights wherever possible, caulked, etc. So far, so good. Then, in August, our main heat pump failed (we have one for the main living area and a second one for the smaller guest area on the second floor.). We bought a highly energy efficient one. So far, in first four months of use, our BTU consumption for the house is down over 20%. And we know we can do better. It's one of our 2009 goals.
And, here's the thing: 20% is not an unusual savings nonprofits (and businesses). Look at your organization's energy costs for 2008. How would you like to save 20% of that to use for other mission needs? I'm sure most of you have started greening in your nonprofit. Good for you. Keep going. And, here are some resources to help you:
I wrote the April edition of the Mission-Based Management Newsletter on "Greening Your Nonprofit".
TechSoup has a list of 10 Resolutions to Green your Technology.
TechSoup also has a longer to-do list on greening your nonprofit.
A set of great ideas from The Nonprofit Center in Boston.
So, think about the gift that keeps on giving. Pushing the green envelope helps you in three ways: You help the planet (the right thing), you save money (the smart thing), and you steward your valuable resources to be able to do more mission (the best thing!).
A win-win-win.
This is, like so many things, the right thing to do and the smart thing to do.
Example: Chris and I moved into a 1992 vintage house in August of '07. Lots of energy drain due to poor maintenance from the prior owner. We've done the normal stuff--changed to florescent lights wherever possible, caulked, etc. So far, so good. Then, in August, our main heat pump failed (we have one for the main living area and a second one for the smaller guest area on the second floor.). We bought a highly energy efficient one. So far, in first four months of use, our BTU consumption for the house is down over 20%. And we know we can do better. It's one of our 2009 goals.
And, here's the thing: 20% is not an unusual savings nonprofits (and businesses). Look at your organization's energy costs for 2008. How would you like to save 20% of that to use for other mission needs? I'm sure most of you have started greening in your nonprofit. Good for you. Keep going. And, here are some resources to help you:
I wrote the April edition of the Mission-Based Management Newsletter on "Greening Your Nonprofit".
TechSoup has a list of 10 Resolutions to Green your Technology.
TechSoup also has a longer to-do list on greening your nonprofit.
A set of great ideas from The Nonprofit Center in Boston.
So, think about the gift that keeps on giving. Pushing the green envelope helps you in three ways: You help the planet (the right thing), you save money (the smart thing), and you steward your valuable resources to be able to do more mission (the best thing!).
A win-win-win.
Monday, December 22, 2008
2009 Nonprofit Accounting Software Review
Here's a terrific holiday gift for those who are thinking about updating their accounting software: a great review of nonprofit-specific accounting software from Anna Sheets at the CPA Technology Advisor.
Eleven different products are reviewed in depth. If you are thinking about investing in new software in 2009, this is for you.
Thanks, Anna!
Eleven different products are reviewed in depth. If you are thinking about investing in new software in 2009, this is for you.
Thanks, Anna!
Thoughts while driving.....
I picked up my daughter Caitlin at college Saturday. She's leaving for 6 months abroad in Auckland in just over a week, so we had to bring all her stuff home. That required me driving 1,600 miles up to Boston and back mostly in snow. The benefit of all of this was I got 14 hours in the car with her to really catch up....I rarely get that amount of one on one time with her any more. So, it was great, and the 800 miles on the home leg zipped by.
On the other hand, going up, I was racing the storm, and alone with my Ipod, so I had time to think. As a nonprofit nerd, my thoughts turned to the sector. As a 56 year old, my thoughts turned to what I want to do for the sector before I retire in 5-10 years. Of course, all my aspirations for nonprofits are tempered to a great degree by our current economic crunch...one that I believe will extend well into the next decade.
But, here's what I want the sector to look like by the time I leave:
1. I want nonprofits to always focus first on mission, but use all the business tools they can to get the most mission out the door in the most effective, efficient way possible.
2. I want the sector to embrace (not accept, but embrace) technology in a way that accelerates mission but does not exclude people. There is so, so much that tech can do to improve and expand the way we solve problems.
3. I want funders of all kinds (foundations, corporations, government, individuals) to accept the fact that when they fund nonprofits, they purchase services, they don't get to control the nonprofits in ways that don't benefit the mission. This means much less silly micromanagement.
4. I want everyone to be more transparent, both inside and outside their organizations. This means nonprofits with their staff, nonprofits with their communities and also foundations and government with all of us.
5. I either want foundations and government to stop worrying about administrative percentages or start living by a 10-12% admin share themselves.
6. I want the media to stop assuming that the nonprofit sector is rife with corruption and look at the facts.
7. I want nonprofits to embrace the best staff involvement practices: we'll get more from our people if we just ask.
8. Finally, I want society to acknowledge that what the sector does is worth paying a fair price for, and to realize that asking people who are good at arts, or human services, or housing, or environmental protection to also be good at begging for every dollar is counterintuitive and unproductive.
What would you add to this list?
On the other hand, going up, I was racing the storm, and alone with my Ipod, so I had time to think. As a nonprofit nerd, my thoughts turned to the sector. As a 56 year old, my thoughts turned to what I want to do for the sector before I retire in 5-10 years. Of course, all my aspirations for nonprofits are tempered to a great degree by our current economic crunch...one that I believe will extend well into the next decade.
But, here's what I want the sector to look like by the time I leave:
1. I want nonprofits to always focus first on mission, but use all the business tools they can to get the most mission out the door in the most effective, efficient way possible.
2. I want the sector to embrace (not accept, but embrace) technology in a way that accelerates mission but does not exclude people. There is so, so much that tech can do to improve and expand the way we solve problems.
3. I want funders of all kinds (foundations, corporations, government, individuals) to accept the fact that when they fund nonprofits, they purchase services, they don't get to control the nonprofits in ways that don't benefit the mission. This means much less silly micromanagement.
4. I want everyone to be more transparent, both inside and outside their organizations. This means nonprofits with their staff, nonprofits with their communities and also foundations and government with all of us.
5. I either want foundations and government to stop worrying about administrative percentages or start living by a 10-12% admin share themselves.
6. I want the media to stop assuming that the nonprofit sector is rife with corruption and look at the facts.
7. I want nonprofits to embrace the best staff involvement practices: we'll get more from our people if we just ask.
8. Finally, I want society to acknowledge that what the sector does is worth paying a fair price for, and to realize that asking people who are good at arts, or human services, or housing, or environmental protection to also be good at begging for every dollar is counterintuitive and unproductive.
What would you add to this list?
Thursday, December 18, 2008
Good online tools for your nonprofit
As regular readers know, I am telling audiences all the time that the future of philanthropy is inextricably linked to better use of technology. Those nonprofits that capture that perfect interface of mission and tech will thrive. Those that don't, won't.
Here are a few tools that can help you move this along.
Discussion lists: Crowdsourcing works, and younger staff, volunteers and donors all want more input into decisions. TechSoup has some guidance and ideas for you on using discussion lists.
Social Networks: There are big ones, like Facebook, and smaller ones that serve a specific purpose, like LinkedIn. I love Ning, which allows you to set up your own private social network in about 5 minutes...and its free. Think about a network for your board, or staff, or volunteers. If they are younger, they are very comfortable in this environment.
Here is some good information from Wild Apricot, posted on TechSoup, about getting started on Facebook
Speaking of Wild Apricot, their Nonprofit Technology Blog is a must read if you are into tech and charities.
Here are a few tools that can help you move this along.
Discussion lists: Crowdsourcing works, and younger staff, volunteers and donors all want more input into decisions. TechSoup has some guidance and ideas for you on using discussion lists.
Social Networks: There are big ones, like Facebook, and smaller ones that serve a specific purpose, like LinkedIn. I love Ning, which allows you to set up your own private social network in about 5 minutes...and its free. Think about a network for your board, or staff, or volunteers. If they are younger, they are very comfortable in this environment.
Here is some good information from Wild Apricot, posted on TechSoup, about getting started on Facebook
Speaking of Wild Apricot, their Nonprofit Technology Blog is a must read if you are into tech and charities.
Wednesday, December 17, 2008
A great pair of posts.....
There are two posts linked below--one inside the other. They perfectly reflect my thinking about Madoff, the SEC, and the fact that if the IRS or an attorney general had had the same amount of "headsup" about ANY nonprofit that the SEC did for Madoff, the feds would have had everyone and their cousin looking into the nonprofit's management. But Madoff? He skated. And took a bunch of nonprofits down with him.
Read this for an ironic laugh...and show it to your board, too.
Read this for an ironic laugh...and show it to your board, too.
Tuesday, December 16, 2008
A great idea.....giving at Christmas
In our family, (when I was little, and now as an adult) part of Christmas has always been about giving to charities. Often we send out of town family and friends notice that we gave in their name to a charity, or Kiva credits (well, not when I was little). Sometimes we send a check with a note: "Give this away to a local cause." Seems more like the point of Christmas to me.
Of course, we didn't start this idea, but neither did we spread the word enough--and now someone has taken up the slack on that. Check out Redefine Christmas. Well done website, with the right balance of messages. Take a look--and pass it on to your family, friends, co-workers, board members.
And think beyond just Christmas and Hanukkah. What about Birthdays, Anniversaries, wedding gifts (I love people who ask not for gifts but for donations to charities).
We need our charities. Right now, LOTS of people need our charities and the charities need us.
Of course, we didn't start this idea, but neither did we spread the word enough--and now someone has taken up the slack on that. Check out Redefine Christmas. Well done website, with the right balance of messages. Take a look--and pass it on to your family, friends, co-workers, board members.
And think beyond just Christmas and Hanukkah. What about Birthdays, Anniversaries, wedding gifts (I love people who ask not for gifts but for donations to charities).
We need our charities. Right now, LOTS of people need our charities and the charities need us.
Monday, December 15, 2008
Another blow....
Another day, another blow to the nonprofit community from the financial world. First, Lehman Brothers, et. al get their greed comeuppance and the result is that many New York nonprofits have their donations cut in half or worse. Then the banks: same thing for the nonprofit community---less support immediately and over the next two or three years.
The stock market tanks: Foundations lose 40-50% of their endowments and can't make as many grants. Some grants are canceled in mid-stride. Cynical side note: anyone suggesting that in such dire times the foundations should explore merging? Or is this only a good idea for poor nonprofits? Hmmm.
Friday, it was Madoff. While we only know the very, very, very slimmest part of the story, and more is coming out by the hour, many nonprofits are suffering, some to the point of closing.
In hard times the poorest suffer first, most, and longest. It seems that is playing out with nonprofits now. And it's our fault. We (and by we, I mean all of us: funders, donors, media, government) have kept nonprofits poor, fussed at nonprofits when they have cash reserves, hassled them when they had "too much" administrative cost. Now, when the community needs the nonprofit world the most (1 in 10 americans is now on food stamps), they have insufficient resources to ride out the cutbacks, and will fail in large numbers.
Paul Light noted a month or so ago that 100,000 US nonprofits could fail in the current recession/depression. What would that number be today?
And, I wonder what the news will bring tomorrow?
The stock market tanks: Foundations lose 40-50% of their endowments and can't make as many grants. Some grants are canceled in mid-stride. Cynical side note: anyone suggesting that in such dire times the foundations should explore merging? Or is this only a good idea for poor nonprofits? Hmmm.
Friday, it was Madoff. While we only know the very, very, very slimmest part of the story, and more is coming out by the hour, many nonprofits are suffering, some to the point of closing.
In hard times the poorest suffer first, most, and longest. It seems that is playing out with nonprofits now. And it's our fault. We (and by we, I mean all of us: funders, donors, media, government) have kept nonprofits poor, fussed at nonprofits when they have cash reserves, hassled them when they had "too much" administrative cost. Now, when the community needs the nonprofit world the most (1 in 10 americans is now on food stamps), they have insufficient resources to ride out the cutbacks, and will fail in large numbers.
Paul Light noted a month or so ago that 100,000 US nonprofits could fail in the current recession/depression. What would that number be today?
And, I wonder what the news will bring tomorrow?
Sunday, December 14, 2008
Good wiki tool
I'm involved in a new project with the Kellogg Action Lab, and one of the things that was needed right out of the chute was a way for a few people to share ideas between face-to-face meetings. Only two of us are working on this project now, but more are expected soon. Obviously we can work on documents together, particularly if we use Open Office (which I swear by).
But we really just need a place to post ideas and clean up/edit others' thoughts in a common format.
Enter a wiki. Thanks to my son Ben for reminding me that when he and his business partner were in the early stages of their startup, they used this great tool. So, I went out and did about a 10 minute search and check and choose ClearWiki. It's easy to set up, easy to use, includes WSIWYG editing, and is free for up to ten users. Works for us. One feature I really like is the "Move" feature-as I figure out the best hierarchy for this emerging project, I can instantly move one page to be under another topic thread.
But don't just take my word for it. Lots of other wiki providers are out there. Here's a list from (appropriately) Wikipedia.
Here's a set of nonprofit wiki stories from TechSoup. Take a look at the wide variety of uses, and remember this tool. It works.
But we really just need a place to post ideas and clean up/edit others' thoughts in a common format.
Enter a wiki. Thanks to my son Ben for reminding me that when he and his business partner were in the early stages of their startup, they used this great tool. So, I went out and did about a 10 minute search and check and choose ClearWiki. It's easy to set up, easy to use, includes WSIWYG editing, and is free for up to ten users. Works for us. One feature I really like is the "Move" feature-as I figure out the best hierarchy for this emerging project, I can instantly move one page to be under another topic thread.
But don't just take my word for it. Lots of other wiki providers are out there. Here's a list from (appropriately) Wikipedia.
Here's a set of nonprofit wiki stories from TechSoup. Take a look at the wide variety of uses, and remember this tool. It works.
Wednesday, December 10, 2008
Difficult times now and in the future.
No eureka about the title of this post, I assume. Everyone (at least everyone who is paying attention) knows that we are screwed economically, and for a long time to come.
The past few weeks, I've fielded a dozen questions from audiences about how long the current recession/depression will last: "How far down the tunnel is the light?" "How long until fundraising turns around?" etc.
Here's my answer, with the understanding that I'm not an economist, just a mission-based business guy who tries to pay attention to the signals out there.
1. Don't believe anyone who is telling you the market is "bottoming". These people are NOT out in the country with the rest of us. They are in New York or the DC Beltway, and are playing "market model" games rather than looking around. I heard one say two days ago that: "Historically, recessions last 13 months, and we've been in this one 13 months, so things will turn around soon." What drivel. Also, many of the talking heads have a "horse in the race" ....for personal or political reasons, they need to be optimistic.
2. We're a long, long way from the bottom of the economy. Some small factoids from recent news: 40% of mortgages in the US are "under water" that is, the house is worth less than the debt on it. Has never happened--since the 1930's. 10% (yes, that's one in ten) Americans are either on or applying for food stamps. Never happened before ---there were no food stamps in the 30's.
3. Ask yourself--even if you haven't lost any income in your family---have you put off buying ANYTHING you would have a year ago? A toaster, a lawnmower, a night out on the town, a weekend getaway. Yeah, me too. Everyone is doing that, and that level of fear and inertia takes a LONG time to turn around. At the business level, no one is hiring if they can put it off (except health care and public schools), expansions are on hold....same symptom, just bigger bucks.
4. All the money the feds have pumped into the system hasn't loosened credit, or encouraged hiring. There are tons of profitable businesses who can't get loans, and thus are stalled, not hiring, not making donations to their regular charities.
I went through my list of observations on this a couple of days ago in Florida, and someone asked, "aren't you optimistic about anything in the economy? What about the price of gas?" My answer was no, $1.30 gas, while nice in the short term (and, understand, I'm REALLY happy about gas prices for people who are on the economic edge) is really an indicator that the recession is global--and will thus take even LONGER to turn around.
So, no. I don't see any light right now at all. Even Obama's infrastructure plans (which I fully support) will take 18 months to really have an effect. A good friend told me last night that he was at a board meeting of his firm in NYC this past week and that the economists presenting to them all agreed that the earliest the economy "might show some life" is the second half.....of 2010. And then the presenters added "but really, that's a guess. No one can really see a bottom to this yet."
OK, so it's bad and getting worse. What should you do at your nonprofit? There's a lot of things you can do now, and you need to start very, very soon.
First, get your board and staff together and review your mission....and its meaning. What does your mission tell you about your priorities, your focus, who you need to help the most. It all starts with mission, so start there.
Second, look at your income array. What percentage comes from large donors, or small, from foundations or government? Talk now (yes, get on the phone) with funders to keep on their radar and get a sense of what they know. Don't be offended if they don't tell you much, and remember that they are just as nervous as you are. Most people (most foundations, most governments) don't have a clue right now of how all this will shake out. But by calling, and being sympathetic to their plight, you stay on their minds in a good way.
After these calls give do some math. Look at your income array and play percentage games. Your result might look like this. The percentages are what you expect might be cut
This is just a sample to get you the idea. What you REALLy need to do is a best case, middle case, worst case scenario. And, here's the key BE CONSERVATIVE.
Then you can run both a budget and a cash flow for each scenario, and see where you are.
Speaking of cash flows, as people who come to my trainings know, CASH=OXYGEN. You need to run bi-weekly cash flow projections out six months, and update them every week or so. You HAVE to be on top of your cash position and projection in tough times.
NOW you have the information you need to start talking about cutting back, if your finances show that need, and for most of us, they do.
Remember, some cutting is symbolic, some not so much. No matter what your budget shows, cutting some small things (or, not spending what is perceived as unnessessary) is key. Thus, holiday parties right now should be tabled, or severely reduced. Some subscriptions or memberships might be cut, raises might be put on hold, etc. If you haven't already, start now with some reductions. It will help later on, both financially and politically.
Before I show you some resources, one more note: nonprofits spend about 85% of their funds on their staff. Thus significant cutbacks are always going to be about people. Always. This is very, very hard stuff. If your nonprofit is like 98% of the 501(c)(3)'s in the US and Canada, you are NOT overstaffed, and the people you employ are nearly always great people, people with families to feed, homes to pay for etc. This sucks. It will tear your heart out. Been there, done that, HATED it.
But remember this: Your job as a manager is about the organization's mission. You have to make tough choices to preserve as much well-provided mission as possible. So, start soon, and know I'm thinking about you.
Resources: My newsletter in September (doesn't that seem like a quaint, idyllic time already?) was on Budgeting in a Recession.
My Decision Tree to help you make good, mission-based decisions, is free here.
In Nonprofit Stewardship, there is an entire chapter on leading in Tough Financial Times.
Here's an excellent piece from About.com. Thanks to Joanne Fritz.
Finally, remember this is a marathon, not a sprint. Start now, keep at this, and keep focused on the people your mission serves as your ultimate inspiration.
And, keep checking back here for more ideas as we move forward. If you have great resources you want to post, let me know and I'll share them.
The past few weeks, I've fielded a dozen questions from audiences about how long the current recession/depression will last: "How far down the tunnel is the light?" "How long until fundraising turns around?" etc.
Here's my answer, with the understanding that I'm not an economist, just a mission-based business guy who tries to pay attention to the signals out there.
1. Don't believe anyone who is telling you the market is "bottoming". These people are NOT out in the country with the rest of us. They are in New York or the DC Beltway, and are playing "market model" games rather than looking around. I heard one say two days ago that: "Historically, recessions last 13 months, and we've been in this one 13 months, so things will turn around soon." What drivel. Also, many of the talking heads have a "horse in the race" ....for personal or political reasons, they need to be optimistic.
2. We're a long, long way from the bottom of the economy. Some small factoids from recent news: 40% of mortgages in the US are "under water" that is, the house is worth less than the debt on it. Has never happened--since the 1930's. 10% (yes, that's one in ten) Americans are either on or applying for food stamps. Never happened before ---there were no food stamps in the 30's.
3. Ask yourself--even if you haven't lost any income in your family---have you put off buying ANYTHING you would have a year ago? A toaster, a lawnmower, a night out on the town, a weekend getaway. Yeah, me too. Everyone is doing that, and that level of fear and inertia takes a LONG time to turn around. At the business level, no one is hiring if they can put it off (except health care and public schools), expansions are on hold....same symptom, just bigger bucks.
4. All the money the feds have pumped into the system hasn't loosened credit, or encouraged hiring. There are tons of profitable businesses who can't get loans, and thus are stalled, not hiring, not making donations to their regular charities.
I went through my list of observations on this a couple of days ago in Florida, and someone asked, "aren't you optimistic about anything in the economy? What about the price of gas?" My answer was no, $1.30 gas, while nice in the short term (and, understand, I'm REALLY happy about gas prices for people who are on the economic edge) is really an indicator that the recession is global--and will thus take even LONGER to turn around.
So, no. I don't see any light right now at all. Even Obama's infrastructure plans (which I fully support) will take 18 months to really have an effect. A good friend told me last night that he was at a board meeting of his firm in NYC this past week and that the economists presenting to them all agreed that the earliest the economy "might show some life" is the second half.....of 2010. And then the presenters added "but really, that's a guess. No one can really see a bottom to this yet."
OK, so it's bad and getting worse. What should you do at your nonprofit? There's a lot of things you can do now, and you need to start very, very soon.
First, get your board and staff together and review your mission....and its meaning. What does your mission tell you about your priorities, your focus, who you need to help the most. It all starts with mission, so start there.
Second, look at your income array. What percentage comes from large donors, or small, from foundations or government? Talk now (yes, get on the phone) with funders to keep on their radar and get a sense of what they know. Don't be offended if they don't tell you much, and remember that they are just as nervous as you are. Most people (most foundations, most governments) don't have a clue right now of how all this will shake out. But by calling, and being sympathetic to their plight, you stay on their minds in a good way.
After these calls give do some math. Look at your income array and play percentage games. Your result might look like this. The percentages are what you expect might be cut
- State funds:
- Program a: 20% within 60 days
- Program b: 50% within 90 days
- Program c: No change---entitlement funds
- Foundation 1: No renewal for the third year
- Foundation 2: 0% cut over the next 6 months, then who knows?
- Donations: Already down 10%, expect another 10% over the next 6 months
- Membership: Down 20% for the past three months, seems stable now.
This is just a sample to get you the idea. What you REALLy need to do is a best case, middle case, worst case scenario. And, here's the key BE CONSERVATIVE.
Then you can run both a budget and a cash flow for each scenario, and see where you are.
Speaking of cash flows, as people who come to my trainings know, CASH=OXYGEN. You need to run bi-weekly cash flow projections out six months, and update them every week or so. You HAVE to be on top of your cash position and projection in tough times.
NOW you have the information you need to start talking about cutting back, if your finances show that need, and for most of us, they do.
Remember, some cutting is symbolic, some not so much. No matter what your budget shows, cutting some small things (or, not spending what is perceived as unnessessary) is key. Thus, holiday parties right now should be tabled, or severely reduced. Some subscriptions or memberships might be cut, raises might be put on hold, etc. If you haven't already, start now with some reductions. It will help later on, both financially and politically.
Before I show you some resources, one more note: nonprofits spend about 85% of their funds on their staff. Thus significant cutbacks are always going to be about people. Always. This is very, very hard stuff. If your nonprofit is like 98% of the 501(c)(3)'s in the US and Canada, you are NOT overstaffed, and the people you employ are nearly always great people, people with families to feed, homes to pay for etc. This sucks. It will tear your heart out. Been there, done that, HATED it.
But remember this: Your job as a manager is about the organization's mission. You have to make tough choices to preserve as much well-provided mission as possible. So, start soon, and know I'm thinking about you.
Resources: My newsletter in September (doesn't that seem like a quaint, idyllic time already?) was on Budgeting in a Recession.
My Decision Tree to help you make good, mission-based decisions, is free here.
In Nonprofit Stewardship, there is an entire chapter on leading in Tough Financial Times.
Here's an excellent piece from About.com. Thanks to Joanne Fritz.
Finally, remember this is a marathon, not a sprint. Start now, keep at this, and keep focused on the people your mission serves as your ultimate inspiration.
And, keep checking back here for more ideas as we move forward. If you have great resources you want to post, let me know and I'll share them.
Monday, December 08, 2008
What was I thinking?
Apparently, that I would get back to the blog "shortly". That must be the same "shortly" that is used by nurses when they leave you half naked in a physician's waiting room and utter those infamous words: "The doctor will be in shortly." and you know you may be waiting until after your next birthday. The day after day "shortly excuse turned into a quarter of a year. Apologies.
Thanks to the people who wrote asking if I was healthy. I am, and I've been buzzing around the country, mostly doing sessions on Generation change, but also working on strategy issues with some very interesting client organizations. I've also been doing a lot of sessions on "Mission-Based Management in Tough Financial Times". No surprise. Just think, when I last posted, your 401K had probably 30% more money in it.....ugh.
So, to get back on track, some reading suggestions. First, read "The Three Signs of a Miserable Job" by Pat Lencioni. The book, which is a fable, is essential reading for any manager in this market, or any market, for that matter. Get it, read it, and then post your comments. Trust me, it's worth your 4 hours....yes, it's that short.
I also just finished "Hot, Flat and Crowded" by Tom Friedman. I'm a big fan of all of Friedman's books and his column in the New York Times. This book is, in turn, terrifying and inspirational. It's about economics/climate change/energy/biodiversity and their linkage. Really well done, and if you want a glimpse of our next 10 years, read this book.
My son, Ben has strongly recommended "The Black Swan The Impact of the Highly Improbable", by Nassim Taleb which I just ordered before writing this post. Ben notes that managers need to look at random events as well....although I'll be interested to see how you actually do that in the real world.
One more catchup headsup. My last three newsletters (October, November, December) have been:
Disaster Planning
Staff Recruitment and Retention
Measuring Mission
Check them out.
And, no fear: I have a bunch of postings in mind for the next few weeks. Trust me----I won't get to them "shortly".....
Thanks to the people who wrote asking if I was healthy. I am, and I've been buzzing around the country, mostly doing sessions on Generation change, but also working on strategy issues with some very interesting client organizations. I've also been doing a lot of sessions on "Mission-Based Management in Tough Financial Times". No surprise. Just think, when I last posted, your 401K had probably 30% more money in it.....ugh.
So, to get back on track, some reading suggestions. First, read "The Three Signs of a Miserable Job" by Pat Lencioni. The book, which is a fable, is essential reading for any manager in this market, or any market, for that matter. Get it, read it, and then post your comments. Trust me, it's worth your 4 hours....yes, it's that short.
I also just finished "Hot, Flat and Crowded" by Tom Friedman. I'm a big fan of all of Friedman's books and his column in the New York Times. This book is, in turn, terrifying and inspirational. It's about economics/climate change/energy/biodiversity and their linkage. Really well done, and if you want a glimpse of our next 10 years, read this book.
My son, Ben has strongly recommended "The Black Swan The Impact of the Highly Improbable", by Nassim Taleb which I just ordered before writing this post. Ben notes that managers need to look at random events as well....although I'll be interested to see how you actually do that in the real world.
One more catchup headsup. My last three newsletters (October, November, December) have been:
Disaster Planning
Staff Recruitment and Retention
Measuring Mission
Check them out.
And, no fear: I have a bunch of postings in mind for the next few weeks. Trust me----I won't get to them "shortly".....
Sunday, September 07, 2008
Sunday Miscellany
I've had the luxury of nearly two weeks here in late summer, which has been terrific, made all the better by visits from two of my three kids, great weather and lots of boat time.
But, I set the time aside to have consistent focused time to work on the 2008 set of nonprofits that are participating in the Generational Readiness Assessment Project funded by the Foellinger Foundation. Nine nonprofits from the Allen County, IN. area are participating and I've spent much of the last ten days mulling over their data. I'm due to get them their reports and recommendations in the next few weeks, and I'll try to post the areawide findings if it's OK with the people at Foellinger. Interesting project.
In other news, Heather Carpenter at the Nonprofit Leadership 601 blog has included me in her list of "The (50) Next Generation Nonprofit Leaders You Should Know."
Thanks, Heather---and you're right, I don't quite know if I fit in "The Next Generation" or the last one! But I appreciate the thought, and I'm certainly in good company--it's quite a list.
Most importantly, check out the new Communique from The Listening Post at Johns Hopkins.
Titled "A Nonprofit Workforce Action Agenda" it makes some great suggestions on recruiting and retaining the best young people into our sector. Thanks, Lester, for yet another great contribution.
But, I set the time aside to have consistent focused time to work on the 2008 set of nonprofits that are participating in the Generational Readiness Assessment Project funded by the Foellinger Foundation. Nine nonprofits from the Allen County, IN. area are participating and I've spent much of the last ten days mulling over their data. I'm due to get them their reports and recommendations in the next few weeks, and I'll try to post the areawide findings if it's OK with the people at Foellinger. Interesting project.
In other news, Heather Carpenter at the Nonprofit Leadership 601 blog has included me in her list of "The (50) Next Generation Nonprofit Leaders You Should Know."
Thanks, Heather---and you're right, I don't quite know if I fit in "The Next Generation" or the last one! But I appreciate the thought, and I'm certainly in good company--it's quite a list.
Most importantly, check out the new Communique from The Listening Post at Johns Hopkins.
Titled "A Nonprofit Workforce Action Agenda" it makes some great suggestions on recruiting and retaining the best young people into our sector. Thanks, Lester, for yet another great contribution.
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