Five Nonprofit Conversations Needed Now
As we face the end of what can only be described as a hurricane force year, nonprofits continue to struggle with the combined effects of the politics of division, slashed federal funding and infrastructure support, as well as economic winds of inflation and job cuts that place substantial pressure on donors. On top of that the cuts to social services increase the demand for nonprofits serving those marginalized by federal policy. This results in institutional philanthropy having to triage “ancillary services” like youth development, animal welfare, arts and culture to the bottom of funding priorities. At best, many nonprofits are forced to batten down the hatches and in the worst case scenarios, struggle not to be pulled under the crashing waves. Does this resonate? Feel like your frenetic actions and surge of fear adrenaline are burning out you, your staff, and board of directors? Perhaps it is time to focus and follow the old adage, “slow down, you will go faster.”
I have been there. Board meetings are consumed with reports and the most urgent of burning fires, staff get anxious attending meetings because they are doing the work of one and a half staff members and meetings take time out the day, and squeezing in things like “safety training” squeezes out time for thoughtful conversations and planning. Planning, especially strategic planning, is a pathway of its own but I would like to urge nonprofit leadership and board members that there are five critical conversations needed now.
What is Our Theory of Change and Impact? This is the starting place at times of uncertainty and crisis. Reminding yourself why you exist. Whether it is dragging out the logic model you use in your grant writing or an elaborate visual of how your program creates change in the community, revisiting the reason you exist ground you in the “why.” But having a purpose means little unless you also have honest conversations about your impact. Connecting your impact data to your theory of change is essential. If you say that you are working on helping to reduce food insecurity, how are you measuring it? If the only data you have is pounds of food or number of food boxes distributed, you might be addressing immediate hunger but addressing food insecurity requires a deeper understanding of how your food boxes are changing the behaviors of clients. The importance of this conversation is critical. If you have a strong theory of change but weak anecdotal evidence, your agency will be at a disadvantage in attracting new revenues, staff and volunteers, relative to an agency with stronger outcome data. Until there is a shared understanding of your impact, you cannot assess the strength of your organization’s foundation.
How Healthy is Our Revenue Model? The second conversation needed now is to ask how healthy your revenue model is. As all nonprofits move beyond start-up and small nonprofit scale, patterns of fundraising emerge. A conversation about the health of your revenues includes but is not limited to the internal benchmarks you set for each revenue category. A revenue health conversation also includes exploring the strategy and direction of your revenues. Nearly fifteen years ago the Bridgespan Groups developed a nonprofit revenue typology (1) and even further back Jon Pratt developed a model of revenue autonomy and reliability (2, 3). Looking at your revenue model through the lens of typology, autonomy and reliability give a basis you think about the health of your revenue model, how it can be strengthened and how much future revenue risk your agency might have. For agencies with significant government contract concentration and less autonomy may be in for a rougher time than an agency with a more nimble revenue model. Understanding the health of your revenues allows you to intervene using prevention or intervention strategies and for those organizations requiring tertiary care, the conversation allows for even more frank conversations.
How Strong is Our Board? A third conversation needed now is the uncomfortable conversation about board composition and competency. Too many Boards are weak and ineffective by either giving full authority to an Executive Director or by micromanaging behaviors of the Executive Director. Nonprofit Boards must understand their role based on the maturity of the nonprofit. When I was consulting full time, over a decade ago, training on roles and responsibilities beyond the ten essential responsibilities (4) was one of the most requested services. Every board needs to understand what is required of them at the stage of development of the nonprofit. The board of a start up nonprofit has radically different responsibilities than a mature organization, wrestling with scope and sector leadership. Misaligned board responsibilities is almost as bad as the problem of under involvement or micro-managing by board members. Role clarity of the board is a persistent challenge for every successful nonprofit. Once board roles are clear, then recruiting for a high functioning board becomes easier and the focus of board performance emerges.
What is Our Current Strategic Focus? A fourth conversation needed now is about strategic focus. Strategic focus is not the same as strategic planning but the conversation starts with reviewing your plan. —Wait. What? You don’t have a board approved strategic plan? That’s another conversation. Call me. Assuming you have a strategic plan you need to ask questions about progress on implementing the plan, the durability of continuing to implement the plan, or the need to pivot. What is strategically needed now may be radically different that what is needed for the long-term and linear implementation of your strategic plan. Such conversations require the exploration of agency (can you do what needs to be done based on the autonomy of your funding), board and leadership’s agility, ability to manage risk and create opportunity. Such conversations may pause your strategic plan, revise your strategic plan or scrap it all together.
Do We Have a Right to Exist? The previous four conversations are not sequential but could structure a board and staff retreat. However, the four conversations ultimately lead to the most challenging conversation at all. If your nonprofit has a weak theory of change, supported by little data, you're struggling to create revenues and a board capable of leadership, and your current strategy feels like it is one step forward and one (or more) steps backwards, it is time to ask, do we have a right to exist? At some early point in your nonprofit’s journey, those in leadership intentionally or unintentionally wrestled with the question: are we a program or an organization? Does our work belong in another organization or do we have the right to build one of our own? That question of organization relevancy is important for many nonprofits to revisit in this turbulent environment.
Many nonprofits have likely done their best to prepare for the massive storm we are in. You have put plywood over windows and sandbagged entries as you could. The five conversations outlined above are strategies to mitigate the unfolding damages that are occurring in spite of the best preparation. Investing in conversations now, will help in the future reconstruction after the storm. Yet even as I write these words, I understand that many nonprofit leaders and board members have difficulty confronting hard conversations that could reshape their nonprofit organization but as the gale force winds increase, it will be even more difficult as agency fundamentals erode.
History has taught the nonprofit sector that we will survive even as a new landscape emerges. The question remains for each nonprofit organization is whether they help shape their place in that future landscape or arrive there by chance. Having strategic conversations and acting now increases the chances of your future destiny.
(1) William Landes Foster, P. K. & B. C. (Spring 2009). Ten Nonprofit Funding Models. Stanford Social Innovation Review.
(2) Pratt, J. (2015, July 6). The dynamics of funding: Considering reliability and autonomy. Nonprofit Quarterly.
(3) Pratt, J. (2015b, July 10). Analyzing the dynamics of funding: Reliability and Autonomy. Nonprofit Quarterly.
(4) Ingram, R. (2015) Ten basic responsibilities of nonprofit boards. BoardSource.
I have spent my career building connections and supporting collaborative work. I was fortunate enough to be introduced to systems thinking as part of my graduate work in public health and have used community development skills in virtually every position I have held. If you need a meeting facilitator, trainer or someone to help design a process, the reach out and connect.
