An episode of SpongeBob SquarePants highlights a trend that seems to envelope the nonprofit sector during the economic downturns. Best I can tell this change is driven by the fear of revenue/fundraising shortfalls. I have watched well designed and competent organizations throw away their trusted playbook and ‘strategically’ address the economic crisis with the same appearance of a Kindergarten class scattering across a playground at the start of recess.
Back to my epiphany as I watched Sunday morning cartoons and I took in the management styling of Eugene Krabs, CEO of the Krusty Crab who becomes mesmerized with the sudden appearance of a single patron at the Chum Bucket (home of Mr. Krab’s evil enemy and ineffective proprietor Plankton). The Krusty Crab is functioning with its usual base of customers and apparently meeting a basic level of profitability as Mr. Krabs continues to employee SpongeBob and Squidward. The appearance of a new customer who develops a taste for the fare at the Chum Bucket causes Mr. Krabs to abandon his business plan and attempt the usual assortment of hilarious antics to win-over the Chum Bucket’s sole customer. I will not give away the ending for those of you lucky enough to be casual observers of SpongeBob but the results are predictable.
Although the comic version is humorous and entertaining in the eyes of the intended audience, sophisticated nonprofit organizations seem to posses a uncanny ability to reproducing the plot of this Nickelodeon show as if they bought the production rights to the script. Fundraising plans are abandoned, strategic plans are tossed (if they are not already covered in dust), board votes are ignored or overturned within days of their approval. The reports of fundraising goals being missed by 20, 40, 60% in the past month or quarter are encouraging a new type of planning- one presented to me as the ‘burning platform’. Apparently, years ago an oil platform caught on fire in the North Sea. Workers on drilling platforms are trained to never abandon the platform. The reason being that jumping hundreds of feet off the platform into the North Sea is considered deadly and survivors of the fall will succumb quickly to the near freezing waters. With fire reaching the crew cabins the choice was to stay and face the inferno or to risk death by jumping into the sea. A sole survivor made the jump but obviously against all training and only with flames at his back. Many nonprofits find themselves headed into a year-end fundraising campaign and wonder if they should pay for the mailing or just start holding out a hat by their front door and save the stamp. This is truly a moment when nonprofit boards and staffs can come together and make wise decisions or run a bucket brigade worthy of a Three Stooges episode.
Borrowing from the comedic mantra of well know performer, I suggest that you might be showing signs of being a dysfunctional nonprofit organization if:
• Your organization starts to chase the ‘big money’ even when they have no existing relationship with a major funder. Organizations seem to gather the annual reports of other nonprofit organizations in the community and start looking for anyone of capacity not on their current donor list. Desperation is usually not a driving force for donors and in a year like 2008 you have plenty of competition. Holder your existing donors close, be transparent, communicate actively, share the difficult decisions you are facing and make them aware of the great decisions you have made already. Few donors and funders are going to be surprised by your request to maintain last year’s giving level but few will respond to the panic of an unknown organization (think the recent bailout debate taking place in the corporate world).
• Abandon all principals within the strategic plan. If your vision, mission and core values reflect what your organization does best in the world then they should be celebrated and serve as lighthouses during the storm to guide you. Too many organizations consider tossing everything overboard in order to survive. Does it matter which port you are sailing to if you just tossed out all the passengers and cargo? Who invests in vessel that has lost all purpose? What if you are more certain than ever that the mission of your organization is appropriate and delivering a service that your organization is uniquely qualified to deliver. These are the times when we rally around the ‘best’ first and foremost because we cannot imagine our community without those services.
• Program and service decisions are made using the single metric of potential revenue generation. Those programs that are profitable stay and those that are not get cut. Many organizations find themselves removing their very own foundation with this approach and then wondering why the whole structure collapsed. Hard choices are required when a budget needs to be reduced but these decisions need more detail than revenue projections. What if you asked your organization what the most important initiative was that needs to be achieved under the tenure of this current board? What is your organization’s competitive advantage? What does your organization do best in the world? If your mission and vision are appropriate, what commitments do you need to make before all others? I would argue these are equally important questions to be used along with the balance sheet.