Tools You Can Use: Finding Opportunity in Crisis
TOOLS YOU CAN USE
Finding Opportunity in Crisis
An executive director of a leading national advocacy organization captured the conflicted mood enveloping the nonprofit community: “I feel this wonderful optimism about new political openings mixed with a great sense of anxiety about the economy.” On the one hand, social justice leaders want to take full advantage of the ripe political environment created by the new Administration and Congress. On the other hand, they’re feeling increasing pressure to tighten their belts in the face of the deepening recession – and, at the same time, fear that cutting back will limit their capacity just when they need it most.
Leaders are asking themselves:
How can we responsibly deal with the repercussions of the economic crisis while at the same time take maximum advantage of the new political opportunities to advance our mission and goals?
To address this question, many nonprofits are stepping back to think critically and strategically about how to allocate their budgets and magnify their impact, despite anticipated losses in revenue. This often requires reclaiming or redefining their most core and essential work and refocusing their resources accordingly.
For some organizations, the impact of the recession has provided the impetus to deal with long-standing organizational issues such as eliminating tangential programs that are taking resources away from core work, addressing under-performing staff, modifying good programs to run more efficiently to meet increased demand or adjust to decreased funding, strengthening weak management, or tightening up the organizational culture. For other organizations, the downturn is forcing them to make tough choices, like cutting spending, scaling back or eliminating programs, and reassigning or reducing staff.
Consequently, leaders are being called upon to ensure that the choices they make today are not only best for meeting the organization’s current challenges but also for assuring its long-term success and viability.
The downsides of the economic crisis are obvious. What is less clear are the opportunities it opens up to strengthen your organization and get more bang for the buck. To illuminate these possibilities and help guide you in managing through these financially difficult times, MAG offers the following checklist of strategic questions to consider.
CLARIFY WHAT IS CORE AND ESSENTIAL
Start by asking yourself if you and your organization are clear and aligned around the answers to the following set of strategic questions. Wherever you lack clarity, seek it out.
Articulate Core Purpose, Strategic Approach, and Goals
- What is your organization's core purpose or ultimate aim?
- What is the main methodology, or “signature approach,” that your organization relies on to achieve its purpose?
- What core work is your organization identified by that differentiates it from other groups?
- What are the major long-term (10-20 years) outcomes that must occur to fulfill your organization's purpose?
- What are the most critical things your organization must achieve in the next three years to move it closer toward realizing the long-range goals?
Analyze the Field
- What political and economic trends are affecting your organization and its field, issue, movement, or constituents?
- What are other organizations in your field/movement doing and doing well? What is your organization’s special niche in the field/movement? What are the areas where your organization can have a uniquely valuable impact or play a role that no other group can play?
- Are there areas of duplication in the field/movement from which your organization might step away? Are there areas where your organization might partner with other organizations to maximize efficiency and effectiveness? Are there areas where your organization has taken on more than it can deliver and should make room for another group to step forward?
Establish Short-Term Priorities
- What activities are most critical to undertake in the next year to advance your organization’s three year goals? Prioritize those that meet the following criteria: 1) the activity is vital to the achievement of at least one of the core goals, 2) the organization will make a special contribution or play an important role that no other group could do as well, 3) there is a realistic chance of making progress toward the goal, and 4) your organization has or can probably raise the necessary resources.
- How much of an organizational investment will be required to advance this priority area? Do you need to be in the lead and devote a significant portion of your resources, staff time, and organizational capacity? Would a more limited strategic strike be sufficient?
IDENTIFY OPPORTUNITIES TO STRENGTHEN AND FOCUS YOUR ORGANIZATION’S OPERATIONS
Align Resources with Priorities
- Are you concentrating staff and financial resources on your highest priorities? Examine your allocation of budget and staff time in light of your priorities and target your resources to ensure that top priority work is accomplished. If fulfilling the obligations of restricted grants is preventing your staff from spending enough time on top priorities, have frank conversations with your funders to explore whether they might renegotiate grants and allow their funds to be redirected to activities that are most critical in the new political environment. Just piling new priority work on your staff without adjusting the existing load is a recipe for staff burnout, reduced effectiveness, and disappointed funders.
- Are you using financial reports as management tools? Ask for monthly financial reports, comparing actual to budgeted income and expenses, as well as monthly cash flow projections, to keep you grounded in reality and make any necessary adjustments.
- Have you fully examined the hidden costs of continuing side projects that drain and distract from core work? Not all money is good money. Money that comes in for projects that divert staff from the most essential work often cost you more in the long run than they bring in. If these side projects cannot be eliminated due to restricted funding, work toward phasing them out by negotiating with foundations to use the restricted grants for your core work or delay certain projects for a year or two to focus on essential activities.
- Do you see opportunities to eliminate what hasn't been working? Sometimes our best ideas fail to produce results. Now is the time to investigate struggling programs and determine whether they can be turned around, put on hold, or eliminated all together.
- Do you have the right staff? One of the hardest jobs for any executive is to let go of staff who are good people but a poor fit for the job at hand. As you shift or refocus your priorities, you are likely to find that your staffing structure must be altered and job responsibilities changed or clarified. This can create both opportunities to elevate staff that have been doing excellent work as well as deal with staff who are performing poorly or who simply don’t have or can’t develop the needed skill set. No one wants to lay off staff in a tough job market, but keeping people who’re not carrying their weight can lead to frustration, resentment, and unfair burdens on others.
- Are we articulating a bold and compelling vision to funders that shows how we are seizing the current opportunities and meeting the challenges? Tell funders about your organization’s goals for the next three years and how it has adjusted its plans to be maximally effective in these times. Emphasize the increased need for your work and why your specific role is important. Show the results you’ve produced, and don't complain about how bad the economy is. For more specific ideas, check out the 20 Emergency Funding Sources for Nonprofits article by Fieldstone Alliance.
- Have we focused our fundraising efforts strategically? Examine your current fundraising strategies and reassess. While you may be drawn to funding opportunities for non-core activities, be willing to say no to them in order to keep focused on your highest-level priorities. Deepen relationships with current donors and funders; they are your best bet for continued funding. Take the time to build relationships with new prospects to prepare the ground work for future asks but don’t expect money now.
Adjust Leadership and Management
- How effectively am I communicating with the staff and board? During times of change, staffs and boards look to their leaders to articulate an inspiring vision, set a clear direction, manage the change process, and calm anxieties. It is important for staff and board to have a strong sense of the direction to know that difficult choices are being made, and understand the reasoning behind them. Transparency gives them a greater sense that they know what to expect and are more equipped to handle the upcoming challenges.
- How am I managing my own stress? How you take care of yourself during stressful periods has a noticeable influence on your ability to lead your organization through turmoil and change. It is important to take responsibility for your well-being and stress levels in whatever form works for you. To expore this further, read MAG's Weighed Down by Stressful Times? article.
- Are you and your managers supporting and developing the staff to work at their optimal levels? Now is the time when strong management is most needed – as staff strive to focus on priorities, do more with less, and respond to fast-breaking developments. You may find you need to meet with staff more, help your managers to grow, and provide more guidance and support during these unpredictable times.
Solicit Other's Wisdom and Support
- How can the board help to support the executive director in making tough decisions and staying focused? Strong board members can often provide executive directors with valuable perspectives and advice on hard decisions. Don’t sugar coat problems or avoid discussing financial difficulties or programmatic changes. If board members don’t understand how urgent your needs are, they’re unlikely to step up and intensify their efforts to raise money or take responsibility for your organization's financial health. Even uninvolved boards often rise to the occasion during difficult times. This might provide you with an opportunity to reengage and revitalize board members and reset expectations for a partnership between the board and the staff.
- Could external support help you strengthen your leadership, make these tough decisions and strategically implement them? You might find an independent sounding board, such as a consultant or coach, helpful in defining focus and priorities, developing discipline, confronting long-standing organizational challenges and dynamics, and managing the additional strain on you.
As organizations struggle with less, leaders will need to ensure every effort and resource feeds into their top priorities. This means sticking to those goals and saying no to whatever may interfere with furthering them. This allows organizations to hone in on new political opportunities and continue to creatively advance their mission and long-term vision.