Five Steps to Operating in a Financial Crisis – Expert Advice
Monday, 2nd February 2009 at 2:44 pm
Time-honoured business skills and strategies are indispensable in a traditional Not for Profit environment, but while they have been shown to be useful they are insufficient for today’s fast changing environment according to one expert.
In the financial environment Australia now faces and eroding of business confidence, what are the most important things Not for Profits should be doing this year?
Board Governance expert Steven Bowman (www.conscious-governance.com) offers Not for Profits five of the most important things they should do in 2009.
Here’s his advice:
1. Look at everything that you and your organisation have assumed you have got right, which is no longer working for you, and identify other ways that you might undertake whatever is not working for your organisation.
Case in point, many organisations rely very substantially on philanthropic funding. This is a great time for these organisations to say, “We still want to receive philanthropic funding, but what else is possible?” The key question for all NFPs right now is – “what else is possible?” “We’ve got philanthropic funding, now can we introduce some user pay services? Can we introduce some product services? Can we introduce things that we do so well that we can turn them into services or products that other organisations might be willing to pay money for?”
Every NFP has the capacity to do this. This is a great opportunity, a great wake-up call for all those organisations out there that spend a lot of their time trying to raise funds. Continue to raise funds, but continue to ask what else is possible.
2. Have a clear understanding of where your thinking is coming from. Is it coming from a Prosperity point of view – that there’s an abundance of funding out there. What do we need to change to get access to that funding? More donors are there, they just don’t know about us. What do we need to change so that they do know about us? There has never been a greater need for our programs or our services. Here are all the good stories that go around it. I wonder who would be interested in partnering with us?”
All these types of questions would be the first thing that I’d encourage the Board to look at, rather than going into the scarcity mindset, which is “Our funding is decreasing, we’re in real deep trouble, we need to increase our funding.”
I encourage Boards to look at this as “what else can we be doing”? “Who else is going to be interested in working with us in this area?” It won’t be what you thought. It won’t be the traditional areas or organisations. It won’t be what you’ve always considered to be the only way of raising money. The second thing, therefore, would be a Board conversation about do we choose to look at this as a problem or do we choose to look at this as an opportunity. Do we choose to look at this as sending a negative message about how poor we are or do we choose to look at this as a way of getting access to even further funders and donors we didn’t even know existed?
3. The third thing I would do is get all of the organisation involved in this
conversation. Have conversations with staff and key stakeholders about the innovative options that are available that we haven’t otherwise considered. This is where you start getting a lot of innovation. Ask staff and key stakeholders not from the point of view of, “We’re in deep, deep trouble, we have no money, what are we going to do to stop the liquidators from coming in and closing us down?” That’s not the conversation we want to have. The conversation you do want to have is, “Okay, so this situation has created a whole new ballpark for us. What are the other options that we’ve got available that will enable us to innovate, create and grow in ways that we haven’t otherwise considered possible?”
Particularly if you do that with strategic partners – with the people that you have got alliances with, your funding bodies, other partners –then you start getting into the creative mode rather than the lock down scarcity mode of “it’s a really tough market out there and we’re in trouble.”
4. The fourth thing between now and the end of the year would be to look at a progressive line of “if our funding falls below X amount, then what is it that we’re going to do. Let’s figure it out now before it actually happens.”
You’re actually setting some trigger points for what it is that you need to do if in the short term you haven’t been able to access the required funding. Work out what you’re going to do now rather than when you don’t have the funding.
You actually have a trigger point plan in place before those situations occur and you give this to all staff so they know the plan. Potentially you might give it to funding bodies as well.
5. The fifth thing would be to realise that your ability or willingness to survive and to
thrive as an organisation is all going to come down to how you see the situation. The
organisations that think positively, that are looking for alternatives, that are looking for
ways of creating even more value in what they’re doing, that are looking for new
partners in areas they hadn’t otherwise considered, that are widening out their scope
of revenue streams to include philanthropy and grants, but also to include
sponsorships, strategic alliances, development of services and products for pay, will
The opportunities out there are huge, if you are willing to look at things from a
different point of view.
Steven Bowman can be contacted via email at email@example.com