Summary: The pandemic has forced nonprofits to think differently about their mission and how to achieve it. Nonprofits usually focus on their mission, achieving that mission, the founders of the mission, and the staff doing the work. Nonprofit leaders are now navigating remote work, changes to tax benefits from the cares act, moving to virtual events, adapting human services, the mental health of their staff, etc. With shutdowns and social distancing, commutes and childcare are more difficult for nonprofit staff.
COVID 19 resources and coronavirus aid have helped, but so much in the world has changed. Fundraising events have changed drastically, front line workers are at constant risk, food banks had to close down or modify, small businesses shut down. With all that change and more, COVID 19 has nonprofit leaders questioning how to achieve their mission and ensure long term sustainability.
Summary
Crisis Management While Continuing Nonprofit Mission
A former podcast guest discussed the different triage stages when reacting to change or something as drastic as coronavirus pandemic. The comparison was to an ER room where one is trying to stabilize the patient and prioritize what is most important. The first step is to stabilize, and then figure out changes and next steps. Decision making looks different in each step during uncertain times.
Within these past few months, David has seen most nonprofits coming out of an initial 
triage stage, but that it’s an ongoing process even after the initial coronavirus response. Nobody is quite sure where it’s going to end or how it’s going to end and are constantly surprised by new things, shocking the nonprofit sector. In David’s experience with nonprofits, change is not foundational. They have a mission. They have a focus. They have their fundraising each year. Maybe a nonprofit organization has to adapt to different funders and maybe some changes in the ecosystem, but for the most part, it’s sort of keeping with what is working.
In fundamental crisis management, there are four stages. The first stage is to assess where the organization is and what is going on. The second step is to deal with or contain challenges. This triage phase is where a nonprofit asks how to stabilize and that might mean getting into cash reserves or taking out a line of credit or taking advantage of coronavirus aid to keep services going. The third step is to explore where the nonprofit might go next and how to move back to sustainability. Nonprofits in this stage might be changing their fundraising events to virtual events, asking community foundations for fewer restrictions, and engaging with funders more intimately. The fourth and final step is for nonprofit leaders to execute on that plan for sustainability and that is the step where the containment or triage phase is absolutely dead.
As new information continues to come out, nonprofit organizations are continually re-triaging as they adapt to that new information in these uncertain times. News stations, social media, podcasts, webinars have all been citing the latest guidance from the CDC or updated facts and figures from places like Washington DC, Los Angeles, New York, or Florida. Right now nonprofits and nonprofit leaders are asking how can they ensure their mission survives during all this, and how can they continue that mission.
Nonprofits are designed to have a mission, have a focus on what they are doing, and then workers in service of that. Sometimes it becomes more about the organization itself then necessarily about the mission. The staff, community being served, and funders are all important stakeholders with influence on the nonprofit and its direction. During the pandemic, the staff has become a significant influence within decision making. The triage forces executives and board members to take a step back and reiterate the importance of placing the mission first as a driving force for the nonprofit.
The People who serve the Nonprofit Mission
It can be much more difficult for nonprofits to let go of its staff since there is such an intimate connection between the mission of a nonprofit and the people working to serve that mission. Most people working at nonprofits could potentially make more money doing similar work in the for-profit sector and instead, they choose to work at a place with a mission they care about.
Despite nonprofit staff’s devotion to their charitable causes, unfortunately, the only way the organization survives is if it focuses on its own viability. A major challenge in COVID-19 has been making decisions so the nonprofit can exist long-term. Several nonprofit workers were furloughed and kept slightly engaged or let go completely. In these situations, nonprofits were trying to find the right balance during tough times to keep all their people or re-examine how they operated as business models all have been forced to change.
Blueprint for Nonprofit Mission Success
When creating a blueprint for mission success, the first thing is to be realistic with where the nonprofit is and how long the various stakeholder groups might be willing to support the nonprofit. Understanding the different stakeholders is important – so the staff and community being served, but also the funders. Some funders invest in the organization for a particular purpose with a particular outcome, and now it’s important to go back and ask what is important to them with current circumstances. David has been amazed by how many funders have come back and lifted constraints or restrictions on their donations. Several funders are more willing to trust nonprofit organizations with doing the right thing and what’s best for the organization with their donor dollars.
Part of this initial assessment is to obtain data and start managing cash flow on a more intentional and short-term basis. With this information and assessment, the nonprofit can then move to the second piece – looking for opportunities to operate differently or more efficiently. Some cost-saving suggestions from David were service delivery changes, cost-sharing with other organizations, or outsourcing to reduce fixed costs.
Meaningful partnerships with other organizations are a possible growth opportunity. One partnership idea is to work with another nonprofit to fundraise since both are in the same area, but don’t really need to compete and can tap into each other’s funders one way or another.
The next step is ultimately figuring out on a long-term basis what will be the best point of sustainability. For some organizations, that might mean mergers and for others is might mean right-sizing the business model.
When the Mission is No Longer Achievable
David has seen some nonprofits where they realized in step one the mission was no longer achievable. The pandemic has forced several nonprofits to actually take a hard look at their organization and their mission.
Instead of changing missions that might be determined to be unachievable, several nonprofits are redefining what their mission means, but not necessarily completely changing their mission or going in a completely different direction with their mission. They re-evaluate the needs in their specific market and perhaps focus their work or emphasize the parts of their mission to align with the new needs of the market.
Nonprofit Mission Clarity
Mission clarity is vital for any nonprofit for mission success. In the past, nonprofits might have only reviewed the mission once a year or during strategic planning sessions. Typically, everyone knows and understands the mission and in a lot of cases, that same mission has existed for a long time. Now there is more focus on the mission, with clarity of that mission more important than ever.
David believes it is ok for an organization to might not necessarily know how they will achieve the mission, but they need to be clear on what it is they seek to achieve. Funders want to see that clear focus needed to direct staff energies in the right way to achieve the mission. The nonprofit board really owns the mission and should revisit it regularly. It is an absolute must that the board of directors takes responsibility for leading the process or co-leading the process with the nonprofit’s executive director to revisit the mission.
The board is ultimately left holding that mission and must co-create with the nonprofit executive director because that executive director is the one responsible for executing the mission.
When revisiting the mission achievability and long-term nonprofit sustainability, the first step is between the board chair and the executive director. Part of that is taking a step back from the current mission and rethinking how the nonprofit can have the most impact going forward and put itself in a position of sustainability.
The Main Take-Aways
David provided a few main take-aways for ensuring the mission survives COVID-19 crisis.
1.Nonprofits should evaluate if the mission is still achievable.
2.Know the data that will help with sound financial decisions like cash flow and numbers associated with expenses and revenues.
3.Identify different opportunities for cost savings or growth.
4.Clarify, and possibly redefine the mission.
David mentioned that mergers and connecting with other nonprofits is another consideration for nonprofits looking to achieve mission sustainability during these times. Nonprofits can examine if they can gain critical mass by becoming part of something bigger, further giving that nonprofit a much higher probability of survival and growth. This type of landscape analysis is one that David typically does on a regular basis as funders are beginning to question why they should spread out their monies to different organizations doing similar work.
David’s opinion is that one challenge nonprofits have is they’ve traditionally not been good at change, whereas their for-profit counterparts adapt better. Executive Directors really do need to think about change management and at some of the models of how to affect change in the organization. How to bring people on board to be inclusive, how to really communicate a plan, and then how to pursue that plan change. If a nonprofit executive can get good at all that, they can survive almost anything.
Conclusion
If you like today’s podcast, please feel free to share it with a friend and also subscribe on your favorite podcasting ap. If you liked today’s podcast please give us a review on your podcasting ap to help us get the word out, and of course, if you are looking for a Line of Credit for your nonprofit, you can call us at 862-207-4118 or visit our website at www.nonprofitmbapodcast.com.
To reach David Harris, his email is [email protected] and their website is https://interim-exec.org.
About the Guest David Harris, Interim Executive Solutions
The guest for this episode is David Harris from Interim Executive Solutions. David Harris has extensive experience working with nonprofit organizations to develop and implement strategies to improve operations, marketing, board governance, and leadership team effectiveness.
He has served as co-chair of Community Action Partners, a consulting organization that provides services to Boston area nonprofits. In that capacity, David has led projects with a diverse set of organizations including YouthBuild Boston, the Benjamin Franklin Institute of Technology, Commonwealth Land Trust, and the Cambridge Center for Adult Education.
David recently held interim positions as Executive Director of the Springfield Empowerment Zone Partnership and President of The Landing School in Maine. Previously he spent five years as Deputy Director of Teachers21, a professional development service provider, where he was responsible for strategic planning, business development, finance, and operations. He also provided coaching and consulting services to school and district leaders on business strategy and organization.
Before earning an MAT from Simmons College and entering the education field, David spent 20 years as a senior executive, product marketing director, and strategy consultant in various computer software and retail organization.
David holds an MBA from Harvard Business School and a Sc.B. in Biochemistry from Brown University.
About The Host Stephen Halasnik, Financing Solutions
Stephen Halasnik is the host of the popular, The Nonprofit MBA Podcast. The Nonprofit MBA podcast’s purpose is to help nonprofit leaders. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to nonprofits and small businesses.
Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik is a best selling Amazon author and is considered a leading authority on building great, purpose-driven businesses. Mr. Halasnik lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.
About Financing Solutions Nonprofit Line of Credit
Financing Solutions, an A+ and 5 stars rated BBB company since 2002, is a direct lender that provides lines of credit to nonprofits and small businesses.
Financing Solutions nonprofit financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.
Nonprofit Organizations use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding)
Please feel free to fill out the no-obligation, 2-minute nonprofit line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.
Note: Financing Solutions donates 10% of its profits to various nonprofit charities
