Many people start each new year with a new set of resolutions and goals on how they will do things differently this year! But these resolutions to do better often do not last very long. In fact, research has shown that by January 12th, most people have begun giving up on their New Year’s resolutions. So now that all that New Year, New You stuff is behind us, it’s time to get serious. It’s time to Think Money First!
For the Social Sector, 2017 was a very reactionary year. Rather than moving the needle forward, we were locked in questioning our next move. “Is this really happening?” “What’s next?”
While the surrounding circumstances were quite a bit different in 2017, there were definite similarities to 2009 and 2010. At that time, the world as we knew it was rocked by economic tribulations; the Great Recession was upon us, whether we realized it or not. For most nonprofits, “riding it out,” became the best way of dealing with their monetary constraints. They rationalized this approach by considering how Barack Obama had just come to office and likely would turn things around with his newly proposed stimulus package. So, operations went on as usual.
But this wasn’t the approach that everyone took. Others looked around and realized, there was something bigger going – the old way of doing business was fundamentally shifting. They took steps right away and made some hard decisions. Programs were scaled back, staff were let go, and fundraising efforts intensified. Homeboy Industries in Los Angeles laid off 300 staff in May 2010 and began a campaign to restructure and reorganize the organization. The American Red Cross’s New York chapter laid off 25 percent of its 186 staff members. And many organizations did likewise. Fast forward a few years and we find many of these organizations thriving. While still rebuilding, Homeboy Industries has staffed back up, expanded programs and ended 2015 with $2.3M in cash in the bank according to the audits on their website.
But for those nonprofits that tried to ‘ride it out’, we saw a different story. We saw the Federated Employment and Guidance Services (FEGS), a $250M social service agency serving 120,000 people a year in New York, shut its doors in 2015. And in 2016, we saw the DC Children and Youth Investment Trust Corp in Washington, DC, the Tumbleweed Center for Youth Development in Phoenix and the Silicon Valley Ballet all declare bankruptcy and many other organizations significantly reduced their programs. Continuing to operate as normal in a world that is anything but normal, was not a ready recipe for success.
Since President Trump’s election, I have seen similar reactions from multiple nonprofits. Some organizations are trying to ‘ride it out’ and hoping that the mid-term elections in 2018 will bring back a sense of normalcy and we can get back to doing what we do best. But others are realizing that regardless of what happens in 2018 or 2020, the world has fundamentally shifted again—and they need to adapt. I am working with a number of organizations that are restructuring, developing new strategic directions, and making the hard calls now. They are not just thinking about how to survive 2018, they are building operating budgets and fundraising strategies for 2023 and beyond. That is what Think Money First! means. That is how leaders with a sustainability mindset react.
To Think Money First! means to understand that we need to equip organizations with the capacity, resources and human capital for a sustained and hard fight. In our new normal, nonprofits must have even greater professional talent, adopt cutting edge technology, and be even more flexible, responsive and innovative than ever before. You don’t get there by starving your organization. And you don’t get there by just riding it out.
As Paul Shoemaker writes in Can’t Not Do, “The problems are complex, the politics murky, and the players innumerable.” Our solutions need to rise to the challenge.
In 2023, how will you look back on 2018? Will it be a year of missed opportunity? Or will it be a turning point towards a more sustainable and high-performing organization? Make 2018 a year of action. Make 2018 the year you break the rules, forget about overhead rates, and abandon the scarcity mindset.
Make 2018 the year you unleash the potential of your organization and own your vision of a more sustainable, just and equitable world. Let this be the year you Think Money First!