April 13, 2020

How to Futureproof Your Nonprofit: Preparing for Unimaginable Change

Lessons from the 2008 financial crisis and what you can do now to ensure your organization can withstand today’s challenging economic times.

By Samantha Sadiv, Staff, Managed Services & Consulting & Lauren Weinstein, Manager, Managed Services & Consulting

How to Futureproof Your Nonprofit: Preparing for Unimaginable Change Managed Human Resources Services

Fundraising will be affected, but many grantmakers will rise to the occasion to contribute.

During the Great Recession, charitable giving to nonprofits across all sectors dipped by approximately 13% between 2007 and 2009 (Stanford). In each year following 2009, however, the cumulative sum of donations to nonprofits rose by several percentage points, and in 2015, giving reached an all-time high of $373.25 billion (Giving USA). While nonprofits in most service sectors saw a decline in revenue, some organizations actually benefitted. For example, health and human services organizations increased their incoming contributions by 15.2% from 2007 to 2010, as they attracted donors who answered the urgent call to help.

Kathy Reich, a funder at the Ford Foundation, shared her perspective on how grantmaking is shifting to respond to current needs in the age of COVID-19. In a recent Chronicle of Philanthropy article, Reich discussed how funders need to provide flexible, unrestricted funding for nonprofits to allow for organizations to address challenges that affect staffing and service delivery, among other obstacles.

We are already seeing numerous organizations pledge relief funds in response to the COVID-19 outbreak, including Global Impact, Park City Community Foundation, and United Way of the National Capital Area.

Organizational goals must be recalibrated during the next strategic planning process.

A healthy nonprofit organization should revisit and update its strategic plan every three to five years to ensure its vision, mission, and strategic goals continue to address the needs of the community it serves. During and after an economic downturn, the planning process should clarify the mission so that donors, community members, and partners understand that your organization is committed to its focus area. Revamping your strategic planning during uncertain times and being creative about reaching the people you help most will ultimately help provide long-term sustainability and guide day-to-day operational decisions.

The Denver Foundation, upon seeing the how economic hardships affected its city after the 2008 economic crisis, reset its strategic plan a year ahead of its five‐year planning cycle to refocus its commitment to creating opportunities for families to create a basic quality of life. During the strategic planning process in 2010, the foundation sought feedback from the community and learned how to provide for families following the loss of so many jobs. A dramatic change in the economy (and society as a whole) will certainly affect the needs of the community you serve – proactively revisiting your strategic plan and using it as a tool to guide you into the future is helpful.

Partnerships and other forms of collaboration can be a lifeline.

Nonprofits can benefit from collaborating with like-minded organizations, where options for partnership range from sharing resources to merging 501(c)3s. In an economic downturn, or times of uncertainty, collaborating with other nonprofits across the industry helps to reduce competition and creates more opportunities to share resources to help each organization thrive. In 2008, during the economic downturn, while many organizations had to close their doors, many others found creative ways to thrive. For example, the Benjamin Rose Institute teamed up with coalitions and similar organizations to create sustainable service delivery models and advance its research, product development, and programs for aging communities. In Washington, DC, N Street Village and Miriam’s House, complementary organizations, merged into one organization to alleviate financial stress and to strive towards a common mission of providing housing for women in need of shelter.

While an economic downturn can create an overwhelming sense of stress and uncertainty, taking proactive steps to fortify your organization’s operations will help it to sustain a crisis. Just remember – you can’t save your organization single handedly! Learn about the funding, programmatic, and partnership opportunities that exist in your sector around your service community. Anticipating an economic recovery will allow your organization to succeed in the future.

If you have any questions about this article or how Marcum LLP’s Search, Transition & Planning team can help your organization with strategic planning or executive search, please contact partner Karen Schuler

at karen.schuler@marcumllp.com.