November 04, 2011

Tips on Coping With the Slow Recovery

The economy’s slow recovery has prompted many nonprofit leaders to wonder how to prepare for what could be an even tougher and longer road out of the recession than anybody expected. While concerns about the possibility of a double-dip recession come and go, it is probably wise to follow the old adage to prepare for the worst and hope for the best.

Here’s what it means to prepare:

Shore up the revenue and find your weak spots

Don’t assume that because you have always received a grant from a particular donor that you will continue to receive one next year.  Reach out to your longtime grant makers, arm them today with real information about the value of your work. Do it now even if your annual report is not due until December. Look for reasons to remind them why your work—and hence their money—is essential.

Listen and try to understand how your grant makers are thinking about this crisis; it affects them, too. Virtually every foundation has gone through a reduction of sorts. Sharing is helpful and builds different kinds of bonds.

Seek out information that can be helpful, which means asking your grant makers and your clients for constructive feedback.

If you are not measuring your results, start now. Don’t worry about being perfect or starting a rigorous 10-year longitudinal study. Push yourself to move beyond the anecdote. Jim Collins, the author of Good to Great and other books, had it right:  "It doesn't really matter whether you can quantify your results. What matters is that you rigorously assemble evidence—quantitative or qualitative—to track your progress. If the evidence is primarily qualitative, think like a trial lawyer assembling the combined body of evidence. If the evidence is primarily quantitative, then think of yourself as a laboratory scientist assembling and assessing the data. ... What matters is not finding the perfect indicator but settling upon a consistent and intelligent method of assessing your output results and then tracking your trajectory with rigor."

Take advantage of networks you have but don't use.

Think broadly about your networks. Look at your competitors as comrades-in-arms and find ways to complement and enhance your work through partnership. Don’t just say you’ll collaborate because you’re supposed to.

Think of your trustees as spokesmen rather than check writers. If you didn't recruit someone specifically as a donor, don't expect that person to turn into one—even if he or she has the financial ability to do so. Everyone should contribute something so you have 100-percent participation (something grant makers like to see).

Board members who can articulate their support for your work, describe the mission, and be eloquent about your advances are as valuable as big donors. Ask them to "talk you up" socially, especially during the holiday giving season.

Get clients and others your organization serves to understand what you need. Staff members are already talking to these people, so this is low-cost and easy.

Spend less and save as much as you can.

Quell the urge to start new things.  It’s expensive and it’s risky.  Unless you have money expressly for this purpose, any extra cash is your rainy-day fund and you will probably need it.

Be purposeful about what you choose to take on and make sure you have a contingency plan in case you have a major cash-flow or other problem.