MOST NON PROFITS EXPERIENCE BAD PATCHES. A few bumps in the road. It’s to be expected. So how does one handle the bad bits without ending up closing the store? Well first off, don’t panic. To quote Winnie the Pooh’s Eyeore: it’s what would ‘appen. Think of it as a management problem. So often cash flow (lack thereof) can be the crisis precipitator. While we will concentrate on the cash issue here, the general advice we can offer about organizational crisis is this: a) assess the situation; b) make a plan; c) do the whole Teddy Roosevelt thing in responding … be vigorous … act; d) communicate with your stakeholders (especially staff); and e) be appropriately concerned and at the same time be cool, be in charge.
If money is your problem (and these days who isn’t having that kind of trouble) remember that as a non profit you’re not supposed to make money. The dollars coming in the door quite often equal the dollars going out the door. The margins are pretty skinny. And if they weren’t, well, theoretically a for-profit organization would want in on your business. It might not be too hard to answer this question but one does need to figure out exactly why cash flow is an issue. It could be as simple as the fact that a grant has come to the end and whoever was in charge before you didn’t plan for a transition to other funding. Shame on them. Maybe you have a special event that is reaching the end of its life cycle. Maybe you are experiencing a sudden rise in your costs. Whatever the reason, you have to nail it becuase you may have some explaining to do … like to your Board, some of your big funders, and prospective donors.
REDUCE COSTS, INCREASE REVENUE. Of course, the next reasonable question everyone is going to ask you is this: What are you going to do about it? Staff and your Board are looking to you for leadership. Sit down with your books and think in two directions at once. Is there any place where you can save money and what fund development opportunities have you not examined. If you are not in the Major Gifts development arena just yet, this is probably not the moment to think about going there. You don’t have time (we’ll be more specific about crisis fundraising in a moment). It’s important that you cobble together a plan of action and begin communicating it to your stakeholders in order of importance (first, staff; second, Board; third, important funders; fourth, prospective funders; fifth, you get the idea).
Why is it important to be vigorous like Teddy Roosevelt? At a time like this, your staff and others associated with your mission are going to be watching you like a hawk. They’re going to be checking your pulse every day. They want it to be high but not off the charts. You have to arrive early and stay late. Spend a lot of time on the phone and even more time out of your office seeing people who can help you. You need to delegate anything you can. Do not allow yourself to get sidetracked so easily with the reassuring stuff of every day. You have to lead the charge. Your staff are more than willing to follow and want to do anything they can to help you succeed. The word has got to get to your Board that you are on the case and working it hard. You are going to need their help and your credibility with them is more important now than ever.
CRISIS FUND RAISING. If you are so fortunate to have a development professional on your staff, this is a really good time to become extra responsive to their direction. Very, very responsive. Almost invariably your fund development professional is trying to get you to do more things than you feel you have time for. If they are good, they are forever prioritizing the things they want you to pursue. Now will be a great time to tell them … BRING IT ON. Their pitches right now must, of course, be focused on the problem at hand. They can’t stop working on other things they need to do to raise budgeted dollars. But you can ask them to task you with actions aimed at your immediate challenge.
What does crisis fund raising look like? Maybe like a mini-capital campaign. Get key people involved but no more than are needed to help you solve your immediate problem. Your Board always has to have the inside skinny. You may want to call an emergency Board meeting to sort things out. Then quickly create a kitchen cabinet consisting of volunteers who are highly involved with your non profit — select Board members, business leaders, key funders, influential service recipients. People who care deeply about your mission. Get them into a room and start reviewing lists. Who can they/you go see about your time of need? It is good right now to think about foundations and corporations. If you present your case correctly some of these entities might be persuaded to provide you with “bridge” funding. It will be important to let them know how much and for how long. They might like to know your plan for assuring this won’t happen again in the immediate future (you don’t want to be like the boy who cried wolf).
OPPORTUNITIES. Every event in the life of a non profit presents opportunities and this is no exception. A funding crisis provides opportunities to look at and reaffirm your mission and importance to the community you serve. You may decide it’s time to make a few adjustments. Keep in mind that the philanthropic marketplace votes with dollars on the importance of your work. This situation might bring to your attention something you are missing. It also gives you an opportunity to energize your base, maybe recruit support from places you hadn’t thought of before. Finally it gives you a chance to practice aspects of the Major Gifts development process — like seeing individuals and asking for larger gifts.
BULLY!