Printable Version
Leading in the Lean Years: Organizational Survival Strategies
The Horizon Foundation and its strategic
partner, the Association of Community
Services,
hosted a March 4 conference - Leading in the
Lean
Years: Organizational Survival
Strategies. The event drew over
300
participants, including nonprofit board chairs
and senior executives and governmental
leaders from a four-county area.
The
conference focused on
challenges faced by the nonprofit community.
The perspective was strategic and
forward-thinking. Horizon Foundation President
and CEO Richard Krieg opened the
conference, held at the Ten Oaks
Ballroom in Clarksville, Maryland. Pointing to
the gravity of this recession, he
emphasized that it is essential to plan and
take action. He said that the Horizon
Foundation- Association of Community Services
partnership was an innovative way for two
organizations to support each other
strategically. In addition to program
collaboration,
the partnership includes space sharing, back
office support and the joint management of
common initiatives.
Simple cutback management is not good enough, said Mr. Krieg. He encouraged the attending organizations to lose old mindsets that aren't survival oriented. Stop, step back and check the long view, looking at strategic actions first - then tactical. He stressed that organizations should involve the most knowledgeable, creative and mission-savvy people to consider wide-ranging options. Another point is to test and re-test your assumptions. Accurate information is critical. Above all, relentlessly pursue opportunities.
Alice Rivlin, currently a Senior Fellow at the Brookings Institute, was the founding director of the Congressional Budget Office. She has also served as vice chair of the Federal Reserve Board and as Director of the White House Office of Management and Budget in the first Clinton Administration.
In her remarks, Ms Rivlin said that the current recession differs markedly from previous downturns in the post-World War II period. This recession began with the collapse of the international financial system. In previous downturns, that system provided the mechanism for restarting the economic engine. At the root of the financial meltdown, Ms. Rivlin said, was a faulty assumption made by Americans and their banks that real estate values would continue to rise in perpetuity. When real estate values began to plunge in 2007, they brought the financial infrastructure down with them.
Financial institutions must begin functioning normally, if we are to come out of the recession. The federal government's success in stabilizing the financial sector will determine how long and deep the recession will be. The recent stimulus bill, while important, will not have the desired effect if banks and other lenders do not begin lending again.
Ms. Rivlin noted that the Washington region was less vulnerable to the downturn than other parts of the country. She said that in this period nonprofits would play a critical role, in helping ameliorate the impact of the recession.
Chuck Bean, Executive Director of The Nonprofit Roundtable of Greater Washington described how the Roundtable pivoted from its traditional coalition building activities to focusing on the recession's impact on nonprofit survival. The group conducted a successful advocacy program to preserve Fannie Mae and Freddie Mac grantmaking and then convened a conference of nonprofits in the region entitled "Nonprofit 911." Mr. Bean identified three strategies that nonprofits should pursue in the coming years: find new ways to raise revenue through fundraising and advocacy, reduce expenses through cooperative buying and volunteer recruitment, and look for new ways to collaborate.
Ray Wacks, the Budget Director for Howard County Government provided an overview of the Howard County budget and the State budget, noting how different revenues streams for the two levels of government affect how they react to an economic downturn. State sales tax receipts, which Mr. Wacks described as the "fighter plane of revenues", react much more quickly to changing economic conditions than other taxes. Personal income taxes, which fund both County and State operations also respond to the economy, albeit slower than the sales tax. The primary source of revenue for the County is the property tax, which reacts more slowly to economic downturns, but also lags behind when economic activity picks up. Mr. Wacks noted that in the downturn the County is reducing budget outlays and concentrating on core County missions.
Sandy Jacobsen, principal consultant from the Fieldstone Alliance (based in Minnesota) chaired a panel of local nonprofit leaders: Henry E. Posko, Jr., President and Chief Executive Officer of Humanim, Inc, James Smith, President of the Community Action Council of Howard County and Dawn Fisk Thomsen, Manager of the Community Service Partnerships program in the Howard County Department of Citizen Services.
Ms. Jacobsen emphasized the importance of strategic thinking for nonprofits in responding to the crisis, and outlined a series of options including cost cutting, tapping into new funding sources, and modifying an organization's mission, structure and culture. She introduced the conference to Rosabeth A. Kanter's concept of "kaleidoscope thinking", looking at old problems in new ways, with new insights, both from within and from outside the organization.
Henry Posko talked about how Humanim has responded to the crisis. Key to its survival has been its ability to move quickly in response to changing circumstances, to try new things, and to involve both the Board and staff in early stages of strategic planning and course adjustment.
James Smith presented information on the North Laurel Community Center, which has created a powerful partnership of its stakeholders. He described how the different partners have been able to bring new information, synergies and contacts to the table to insure success.
Dawn Thomsen emphasized the importance of nonprofits reviewing their core values and mission and not to lose sight of their true role and value to the community.
Anne Towne reported on the results of the survey distributed to nonprofits in the County prior to the conference. The survey was designed to capture trends in how organizations were responding to the negative economic climate. Beginning in FY 2008 most organizations have reduced and/or frozen paid staff positions. At the same time, nonprofits have expanded core services to meet growing need in the community. The respondents indicated that these trends are continuing into the current fiscal year.
Nonprofits in the County are evenly divided in whether they would explore new collaborations over the next year, but none of the respondents are considering consolidation. Almost all the organizations are using volunteers as part of their operations, and a majority will expand their volunteer operations this year.
According to the survey, nonprofit boards are reviewing their fundraising strategies, and most are revising or reducing expenditures. When asked where they need assistance, the survey respondents stated they needed access to resources, including funding, direct staff assistance, and capacity building.
Following Ms. Towne's presentation, the attendees conducted a table top exercise. Participants in small groups explored strategies for collaborating, fundraising and maintaining operations.
Rich Krieg summarized the key points made during the day. He emphasized the gravity of the current situation, brought to light by each of the speakers. For most nonprofits, there is a need for decisive action to shore up agency operations. This needs to be done with great integrity to the values the organization represents. We need to consider the entire service delivery system in addition to simply focusing on individual organizations. Now is a time to assess overall community needs and how organizations can join forces to meet them. For example, he said, other communities have been relatively more active in seeking meaningful ties between organizations, including mergers. Howard County can justifiably point to inclusive and effective community planning. The current financial crisis may require more of us in terms of more creativity and examining solutions that have not yet been seriously considered.
Simple cutback management is not good enough, said Mr. Krieg. He encouraged the attending organizations to lose old mindsets that aren't survival oriented. Stop, step back and check the long view, looking at strategic actions first - then tactical. He stressed that organizations should involve the most knowledgeable, creative and mission-savvy people to consider wide-ranging options. Another point is to test and re-test your assumptions. Accurate information is critical. Above all, relentlessly pursue opportunities.
Alice Rivlin, currently a Senior Fellow at the Brookings Institute, was the founding director of the Congressional Budget Office. She has also served as vice chair of the Federal Reserve Board and as Director of the White House Office of Management and Budget in the first Clinton Administration.
In her remarks, Ms Rivlin said that the current recession differs markedly from previous downturns in the post-World War II period. This recession began with the collapse of the international financial system. In previous downturns, that system provided the mechanism for restarting the economic engine. At the root of the financial meltdown, Ms. Rivlin said, was a faulty assumption made by Americans and their banks that real estate values would continue to rise in perpetuity. When real estate values began to plunge in 2007, they brought the financial infrastructure down with them.
Financial institutions must begin functioning normally, if we are to come out of the recession. The federal government's success in stabilizing the financial sector will determine how long and deep the recession will be. The recent stimulus bill, while important, will not have the desired effect if banks and other lenders do not begin lending again.
Ms. Rivlin noted that the Washington region was less vulnerable to the downturn than other parts of the country. She said that in this period nonprofits would play a critical role, in helping ameliorate the impact of the recession.
Chuck Bean, Executive Director of The Nonprofit Roundtable of Greater Washington described how the Roundtable pivoted from its traditional coalition building activities to focusing on the recession's impact on nonprofit survival. The group conducted a successful advocacy program to preserve Fannie Mae and Freddie Mac grantmaking and then convened a conference of nonprofits in the region entitled "Nonprofit 911." Mr. Bean identified three strategies that nonprofits should pursue in the coming years: find new ways to raise revenue through fundraising and advocacy, reduce expenses through cooperative buying and volunteer recruitment, and look for new ways to collaborate.
Ray Wacks, the Budget Director for Howard County Government provided an overview of the Howard County budget and the State budget, noting how different revenues streams for the two levels of government affect how they react to an economic downturn. State sales tax receipts, which Mr. Wacks described as the "fighter plane of revenues", react much more quickly to changing economic conditions than other taxes. Personal income taxes, which fund both County and State operations also respond to the economy, albeit slower than the sales tax. The primary source of revenue for the County is the property tax, which reacts more slowly to economic downturns, but also lags behind when economic activity picks up. Mr. Wacks noted that in the downturn the County is reducing budget outlays and concentrating on core County missions.
Sandy Jacobsen, principal consultant from the Fieldstone Alliance (based in Minnesota) chaired a panel of local nonprofit leaders: Henry E. Posko, Jr., President and Chief Executive Officer of Humanim, Inc, James Smith, President of the Community Action Council of Howard County and Dawn Fisk Thomsen, Manager of the Community Service Partnerships program in the Howard County Department of Citizen Services.
Ms. Jacobsen emphasized the importance of strategic thinking for nonprofits in responding to the crisis, and outlined a series of options including cost cutting, tapping into new funding sources, and modifying an organization's mission, structure and culture. She introduced the conference to Rosabeth A. Kanter's concept of "kaleidoscope thinking", looking at old problems in new ways, with new insights, both from within and from outside the organization.
Henry Posko talked about how Humanim has responded to the crisis. Key to its survival has been its ability to move quickly in response to changing circumstances, to try new things, and to involve both the Board and staff in early stages of strategic planning and course adjustment.
James Smith presented information on the North Laurel Community Center, which has created a powerful partnership of its stakeholders. He described how the different partners have been able to bring new information, synergies and contacts to the table to insure success.
Dawn Thomsen emphasized the importance of nonprofits reviewing their core values and mission and not to lose sight of their true role and value to the community.
Anne Towne reported on the results of the survey distributed to nonprofits in the County prior to the conference. The survey was designed to capture trends in how organizations were responding to the negative economic climate. Beginning in FY 2008 most organizations have reduced and/or frozen paid staff positions. At the same time, nonprofits have expanded core services to meet growing need in the community. The respondents indicated that these trends are continuing into the current fiscal year.
Nonprofits in the County are evenly divided in whether they would explore new collaborations over the next year, but none of the respondents are considering consolidation. Almost all the organizations are using volunteers as part of their operations, and a majority will expand their volunteer operations this year.
According to the survey, nonprofit boards are reviewing their fundraising strategies, and most are revising or reducing expenditures. When asked where they need assistance, the survey respondents stated they needed access to resources, including funding, direct staff assistance, and capacity building.
Following Ms. Towne's presentation, the attendees conducted a table top exercise. Participants in small groups explored strategies for collaborating, fundraising and maintaining operations.
Rich Krieg summarized the key points made during the day. He emphasized the gravity of the current situation, brought to light by each of the speakers. For most nonprofits, there is a need for decisive action to shore up agency operations. This needs to be done with great integrity to the values the organization represents. We need to consider the entire service delivery system in addition to simply focusing on individual organizations. Now is a time to assess overall community needs and how organizations can join forces to meet them. For example, he said, other communities have been relatively more active in seeking meaningful ties between organizations, including mergers. Howard County can justifiably point to inclusive and effective community planning. The current financial crisis may require more of us in terms of more creativity and examining solutions that have not yet been seriously considered.