Reimagine Your Nonprofit to Survive the Crisis

Reimagine Your Nonprofit to Survive the Crisis

by Steve Zimmerman - June 01, 2020

In the age of Covid-19, nonprofits are seeing donations drop, doors close, and cash reserves dwindle. Together with the uncertainty and demands the pandemic has forced on us, that makes it a worrying time. But it’s also a time of opportunity. It might well be the time to reimagine who you are and what you do and to make your organization better in the process.

Reimagining an organization is hard, especially during a crisis. Leaders who are overwhelmed with day-to-day surprises, urgent short-term demands, and a gnawing sense of uncertainty often don’t feel able to take on another challenge. But the job is possible - and frequently necessary.

For years I’ve worked with community-based nonprofits on strategy, financial management, and their business models. In the course of that work I’ve learned that to properly reimagine an organization, you need to focus on four important and interconnected areas: impact, people, finances, and the community. Let’s explore them one by one.

Impact

Nonprofits exist to have impact. So the first step in reimagining your organization has to be clearly defining what you want that to be.

Gather input as broadly as possible - from staff, the board, volunteers, and others. Hearing from a diversity of voices at this early stage in the process will allow you to build an inclusive organization from the ground up.

Consider designing a survey that asks such questions as:

• If we went away today, who would it matter to and why?
• What difference are we trying to make in our community?
• Who are our core constituents?
• What impact do they need us to have?

The more specific you can get in your answers, the better able you’ll be to determine your priorities and ensure that they guide your strategy.

Focusing on impact has to go beyond setting your big-picture organizational direction. It has to involve candid, data-driven discussions about how current programs will deliver impact in a new environment. Program evaluations, focus groups, and reports of constituent and leadership experiences all should be taken into consideration. Stakeholders naturally feel that every program has value, but priorities can shift dramatically during times of change, and not all programs will retain their value or deliver a similar impact as you move forward. So as you imagine your future, try ranking your programs into tiers A, B, and C according to their likely future impact. This will help you prioritize the mix.

As we’ve seen during the pandemic, crises force organizations to think creatively about new ways to engage and serve constituents. Take stock of what you’re doing right now to solve the problems of the moment and ask yourself: Do any of these temporary new programs and delivery methods show promise for the future? Might they contribute more to the organization’s overall impact than some current activities do? During the pandemic, for example, Jewish Family Services of Milwaukee had to offer its mental health services online. That move, made by necessity, has turned out to be so effective in serving clients that the agency is planning to stick with it after the lockdown is over, as a way to increase its reach.

By focusing on impact in these ways, you can generate a shared understanding of your organization’s goals and how you are positioned to deliver on them in a new environment.

People

Reimagining your organization gives you a chance to build a diverse and inclusive organization that’s genuinely in touch with its staff and reflects the people it serves.

Start by thinking deeply about how to include as many people as possible in the reimagination process. Who needs to be involved? How will staff have a voice? Is the board meaningfully engaged in discussions? Are constituents represented in the leadership? Rather than assume what constituents and staff want or need, invite them into the process and build the organization with them. If everyone has a voice in defining success and impact, you’ll end up with a much more diverse and inclusive organization - which will mean a more cohesive and resilient organization that’s better able to survive the next crisis.

This is also a moment to explore whether your personnel practices are equitable. As programs shift, will you be able to maintain a personnel structure and compensation practices that are in keeping with your values? Often during business model exercises, organizations omit or delay discussions of personnel policies to make room for “more-urgent” issues. That’s a mistake. Be sure to review and update your personnel policies and compensation structure so that they reflect your core values and demonstrate that people are your most important asset.

Additionally, identify the skills or capacities your people must have to be highly effective as you change. Do they correspond with the ones your people now have? If not, where are the gaps? Identifying them will present you with an opportunity to help your people develop the skills they - and you! - need to succeed in the future. If you can prioritize professional development and continuous learning, you’ll be much more able to adapt as the world around you continues to change.

Finances

Needless to say, in reimagining your organization you’ll need to determine how much it will cost to do what you want, and you’ll need to develop an intentional revenue strategy.

Start by making sure you know the true costs of your programs. Take both direct and indirect expenses into account. If you know the fully allocated costs of whatever programs you imagine running, you’ll be able to clearly communicate the cost of impact and seek the right level of funding to deliver it.

In too many organizations, a small subset of the board and senior management focus on finances. This, too, is a mistake, as it doesn’t provide the support you need at this moment. Ensure that as many people as possible have a firm grasp of your finances. Only then will you be able to engage your people meaningfully in the process of reimagining and identify ways to deliver new programming that’s properly aligned with financial realities. This will help not only with strategic decision-making but also with fundraising efforts, because staff will be able to explain to donors how their support is used.

As the cost of impact becomes apparent, consider how you plan to pay for it. Long-term sustainable revenue strategies align with an organization’s impact, produce flexible income, and leverage the organization’s capacities. So ask yourself: Beyond our direct constituents, whom do we benefit? Be specific. Does your organization have the relationships and infrastructure necessary to reach those groups? Do you have the capacities to achieve your desired impact? If you can align your capacities and your impact, you’ll create a virtuous circle: As you deliver impact, your investors or donors will see the benefits of their contributions and will be more likely to continue providing funding.

In a struggling economy, it’s hard to generate revenue from both earned income and philanthropy. Your best hope of overcoming this problem is through intentionality and focus. Fundraising can’t be only transactional. What helps nonprofits survive during times of crisis are authentic and deep relationships with trusted partners. As you reimagine and rebuild your organization, make sure you create the time and space to cultivate those relationships. To be financially viable no matter what the future brings, you’ll need to invest appropriately in revenue strategies built on those relationships -even if that means delaying or sequencing program delivery.

Community

To effectively reimagine your organization, you also need to focus on the larger system in which you operate: your community. It’s made up of several groups that need constant attention.

Core constituents. These are the central direct beneficiaries of the organization’s efforts. How might they change in your reimagining? What are their needs and interests? Where else are they turning to meet them? Your success depends on knowing the answers to these questions and acting accordingly.

Other beneficiaries and funders. In the nonprofit world, those paying for services are generally not the same as those receiving them. This creates what’s known as a “muted market,” in which the groups involved don’t properly understand or appreciate one another’s needs and interests. Facilitating and enhancing understanding among these groups has to be a priority in any reimagining of what you do.

Other organizations. Make sure you know the full landscape of the other nonprofits and the for-profits with whom you might compete and collaborate. Who else in your community is serving your current or potential constituents, and how does their impact overlap with yours? How might you work together for greater impact?  Figuring this out should be a priority so that you don’t duplicate resources.

Coming out of the 2008 recession, Lutheran Social Services, an Indiana-based organization that provides youth, mental-health, and job-training services, used these steps to reimagine its programming. After taking stock of what its constituents most needed, what other organizations in the community were doing, and what it could do best, it decided that its time would be best spent on counseling and workforce-development programming. But facing a budget deficit, it couldn’t do both, so it made the difficult decision to focus just on workforce-development programming. That was a wise move. The gains achieved soon had a demonstrable impact in the community. This allowed the agency to raise more money, which allowed it to restart its counseling services.

Conclusion

Reimagining your organization is never easy. But the devastating nature of the current crisis is forcing many organizations to do so. The challenge can feel overwhelming, and some of the changes will be painful. Nevertheless, this moment also represents an opportunity for you and your nonprofit: to reinvent who you are, to better focus on your mission, and to better serve your constituents. The best way of doing so is to focus on the four areas outlined above.

Steve Zimmerman is the Principal of Spectrum Nonprofit Services, specializing in nonprofit sustainability and strategy. He is the co-author of The Sustainability Mindset (2014).