Take Charge of Your Destiny
The consensus of panelists and participants at the Jan. 21 Governance Matters Roundtable, How Did Others Take Charge of Their Destiny During the Recession?, could be summed up in the words of Rahm Emanuel who was quoted several times during the discussion:
You never want a serious crisis to go to waste ... [It is] an opportunity to do things you thought you could not do before. The current economic crisis has forced nonprofits to recommit, reassess, and realign: that is, do things they should have been doing all along.
Some examples given by the panelists:
- Organizations have recommitted to their core missions and reassessed programs to ensure that they are on-mission.
- The importance of strategic planning has become glaringly apparent.
- Boards have reassessed their roles, both as individuals and as a governing body.
- The roles of staff and board have been realigned to take advantage of all skills.
- The value of good staff and support for staff has been re-emphasized.
Recommitment
Nonprofits and the foundations that fund them have been reviewing their missions and cutting out programs that don't really fit. "Mission creep" has been unfunded as organizations focus on what they set out to do in the first place.
This shedding of non-mission roles has, for the most part, followed cuts in discretionary spending and across-the-board belt tightening. It has also followed the board's assessment of its mission and its goals, best done, according to the panelists, by using a strategic planning process.
A good, current strategic plan makes program assessment and cost-cutting easier. A strategic plan should not be ignored but it can be "jiggered with" to respond to external and internal changes.
The second aspect of recommitment is the personal recommitment of individual board members to their tasks. The economic crisis has forced board members to take their governance jobs seriously. Not necessarily a bad thing, the panelists agreed.
To accommodate board members who don't want to be deeply involved, some agencies have put into place advisory or emeritus boards through which people can continue their connection to the organization without the work commitment.
For other board members, their recommitment to the mission has led to greater in-kind services, whether financial, legal, web-design skills or planning events for young leaders. After all, a budget can be bolstered by cutting outside costs as well as by bringing in more donors.
Restructuring
Some agencies have undergone drastic restructuring, consolidating the work of committees and departments to offer more streamlined, less costly services to clients.
Others have done away with discretionary spending but have increased spending on development activities, communication (especially web-based), and investment in areas that need to grow for the agency to survive long-term.
Nonprofits have traditionally skimped on such things as staff training, software upgrades, and indirect costs such as fundraising. But with the economic crisis has come the realization that funding such capacity-building makes an organization more efficient in the short-term and able to grow when funding allows and demand for services requires.
Stumbling blocks to capacity-building remain, among them the agencies that rate nonprofits; staff members who balk at spending on infrastructure rather than the programs to which they are devoted; and government agencies, which do not provide money for operating costs.
Realignment
Organizations are now more careful when filling board vacancies, several people at the Roundtable noted. Not just anyone will do. New board members should bring to the board skills the organization needs, not just money. To do that, the Nominating or Governance committee needs a clear idea of what skills each current board member has and what the organization lacks.
Some agencies are focusing on Human Resources in an effort to retain strong employees while asking them to do more. No organization can be successful without building its staff. Moreover, staff has a good idea of what needs to be done, both to cut costs and to keep programs going. Respecting and listening to the opinions of staff will help retain them.
Others have found opportunity in the downturn in the real estate market and acted on plans that will facilitate future expansion.
If board members are well-informed, they'll make better decisions, according to the experience of those in attendance. This may mean letting the board know the effects of cutting, say, the IT budget.
Executive directors are often reluctant to share this information with their boards, thinking it is too much detail and too much board involvement. It isn't about micro-managing, the panelists agreed; it's about knowing the actual consequences of choices, both short- and long-term.
Funders can help by asking more questions without making decisions for their grantees. By pushing grantees to think ahead and to furnish interim financial reports, funders can help grantees to see recognize weak areas and address them.
(Questions to ask grantees are the focus of the Good Governance Guide.)
And funders need to underwrite capacity building, to streamline current operations, take advantage of new technology, and lay the groundwork for future growth.
The panel was moderated by John Brothers, principal in Cuidiu Consulting, and senior fellow with the Support Center for Nonprofit Management. Panelists included:
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