After reading Michael Lewis’ remarkable book Boomerang, I now have greater clarity that the global economic outlook presents a massive paradigm shift. Without monumental regulatory, budgetary, and political overhaul I forecast the following for the social sector:
- No sustainable funding models that involve local or city government. Emergency/one-time only support from states and very scarce federal grants.
- Greater demand that social sector organizations fill civil and social service roles abandoned by local government.
- Significantly fewer donors. Dollars contributed going to more restricted causes.
- Staffing and budget cutbacks throughout the social sector.
- Demand that nonprofit organizations do much more with far less (think 33-50% reductions while handling increased demand for service).
- PILOTS (Payment in Lieu of Taxes) will be formalized into a taxing structures. Large and middle sized organizations will not escape state regulators.
- Spectacular failures of prominent social sector enterprises. Look at your nonprofit neighbor on the left and the right, chances are one of you will: cease to exist, merge under hardship (not by strategic decision-making), or become irrelevant.
- National federations will have to cut representation in poorly performing regions. Large swaths of the United States will be abandoned by well recognized national causes.
- Corporations will increasingly use the nonprofit sector as a fulcrum for their agendas. A minority will support causes that are of the highest need and tackling the most difficult issues, most will partner with initiatives that advance the company’s marketing plans. A final group will provide minimal support to say they are philanthropic.
It is not fun to write just a few of these prognostications. However, the social sector has no real lobby to speak on its behalf and the decisions being made at the local and state government are being deeply influenced by those who have access. Your city can quietly cut support for the local conservation-youth-arts group or very publicly opt out of a pension requirement for the police or firefighters. When you realize that libraries, parks, and civic centers are being closed throughout some of the largest states, you have to consider the ripple effects are on the way to your community.
The house is going to raise the minimum bet at the social sector casino. To be in the game is going to require a great level of commitment for many causes. What can those of us who are uniquely positioned to succeed in the face of the pending storm do to prepare? Some fundamental questions:
- Can you articulate what your cause believes? Few people join a cause because of it mission statement but many of us get involved because it feels right.
- Do you have the facts to measure your organization’s impact? This does not have to be a numerical metric, however it should capture what your cause accomplishes that is absolutely brilliant. What measurement showcases your best?
- Have you studied what significant reductions in funding might do to your enterprise? Or, what a massive increase demand for services might require? Do you have a plan to do what you do best without extra capacity?
- What is the status of your relationships with your fans (volunteers, donors, customers, partners)? What work can be done to enhance these partnerships? Does impending volatility help increase your commitment and activity to connect with those who call themselves members of your tribes?
- Have you consider developing a filter to assess real-time opportunities and challenges? Relying on a static strategic plan might by like relying on Forest Gump’s fishing strategy (before the hurricane). Racing from place to place based on gut instinct may appear helpless to those watching from shore.
- Have you recruited the people who are committed to the enterprise’s purpose? When Ernest Shackelton’s boat the Endurance got caught in the Arctic ice there was no mutiny by the crew. He posted the right “help wanted” sign when he was recruiting a crew and he told them up front that their safe return was doubtful.
- Who is your optimist with the vision of a brighter future? Somebody needs to remind us that the most beautiful landscapes come after the storm. Who has a conviction stronger than forces that are running against you?
I could be spectacularly wrong about the next wave of our economic tsunami. I think only significant commitment to compromise and willingness to enter into a period of shared sacrifice will keep us from hitting an iceberg that will force us to abandon the boat known as abated consumption. There is also a terrific opportunity to move to the front of the pack and give your best now. There may be attrition through the next leg of the journey but being prepared provides opportunities to excel.