Nonprofit organizations are currently experiencing a sense of increased uncertainty due to the pandemic. The unsettling effects of the pandemic, including inflation and an economic downturn, have left many feeling unstable and unsure about the future. While some nonprofits have been able to bounce back with financial assistance from PPP loans and recovery funds, others have had to develop new business models to rebuild. Unfortunately, many organizations have been unable to weather the storm and are struggling to stay afloat.
In the aftermath of this crisis, it’s important to assess the health of your organization to determine if it’s in need of a “reset” or if it’s simply experiencing temporary setbacks. Without regular check-ins and evaluations, problems can become chronic and difficult to reverse. Now that we are in recovery from the pandemic, it’s important to conduct a check-up for your organization to ensure that it isn’t in permanent decline or crisis.
By following these tips, you can help ensure that your organization is strong and resilient and that it’s able to navigate any future challenges that may arise.
Check your Impact Drivers
As an executive or board member, it is important to be aware of your organization’s performance. One way to do this is by monitoring a dashboard of key indicators that can help you stay informed about its health on a regular basis.
Surveys can be a useful tool to gauge the satisfaction of staff, volunteers, donors, or clients with the organization’s operations and strategy. These indicators should include the major revenue and cost drivers for the organization, such as fundraising milestones, cash reserves, and client retention. You should also ensure that your organization is being a responsible steward of its donors’ contributions.
Setting goals for your organization can help you be more aware when deviations arise, so you can respond promptly. Keeping abreast of your organization’s vital signs can help you be better informed and make effective decisions that ensure its continued success.
Look for Chronic Pain Points
The graphic below provides a detailed overview of the different stages in the lifecycle of a nonprofit organization. One of the most common themes during the decline and crisis stages is chronic pain. This type of pain can affect various aspects of your organization, including your staff, employees, board members, clients, and funders. If your organization is experiencing chronic pain, it can be challenging to maintain a positive work environment, and you and your staff might feel overwhelmed and stressed.
To determine the severity of your organization’s challenges, you should watch out for warning signs such as overwhelmed staff, high employee turnover, board members quitting, difficulty in finding new employees or board members, and lack of interest from clients and funders. Even healthy organizations can experience growing pains, but the difference is in the duration and intensity of the pain.
To diagnose chronic pain in your organization, you can use two diagnostic tools. The first tool is to compare your current strategic plan with the one from five years ago to check for progress or regression/stagnation. This comparison can help you identify areas where your organization needs to improve and make changes. The second tool is to benchmark your organization against similar agencies to understand your unique value proposition better and assess your current relevancy in the community. By benchmarking your organization, you can see how you compare to other nonprofits in your industry and identify areas where you need to improve.
It’s worth noting that the social sector strategy has changed post-pandemic, and your organization may need to update or refresh its strategy and strategic plan. By doing so, you can calibrate your pains to what is now acceptable in the industry and current environment while determining the best strategic positioning for your organization.
Build Your Recovery Plan
In order to ensure the success of your organization, it is vital to identify and diagnose any potential pain points before they reach a stage of decline and crisis. This is because it is much more challenging to fix issues when they have reached this stage, particularly when they impact multiple areas of the organization, such as its impact, governance, and culture. By recognizing that the organization is in or headed toward this state, leadership can proactively develop a turnaround or strategic plan that addresses the underlying issues.
Although it can be difficult to admit failure, it is important not to wait for a crisis to address chronic pain. Doing so leaves leaders with fewer options and less time to act, which can ultimately harm the organization. Instead, it is essential to recognize and address issues as soon as possible. To assess the severity of the organization’s problems, it is important to talk to internal and external stakeholders and conduct research to ensure that the organization is still relevant, serving current needs based on community assessments and following best practices. Additionally, leaders might also want to assess their readiness for enhanced collaboration and even consider merger, acquisition, and exit opportunities.
It is important to be aware that the symptoms of decline can sometimes come on gradually, making it easy to miss the warning signs. This is why it is important to regularly assess the organization’s status and be vigilant for any changes that could indicate a decline. Additionally, many senior staff and boards may have a collective post-pandemic blind spot, which means that they may think that things will eventually get better. However, it is critical for social sector leaders to be aware of their organizations and be courageous in recognizing when dramatic foundational changes need to be made. This will help ensure that the organization can continue to successfully serve the community, even in new or different ways.
Organizations and their leaders must be willing to face tough and challenging times if they aim to achieve sustainability. This may require making difficult decisions, such as recognizing signs of crisis or decline and taking corrective measures. If you have encountered such difficulties during the pandemic, we encourage you to share your experiences and the lessons you have learned. This can assist other leaders who are dealing with similar situations in making the right decisions and ensuring the continued success of their organizations.
Nonprofit leadership in this “new normal” requires agility, proactivity, and courage. Regular check-ins and evaluations, monitoring impact drivers, and setting goals to ensure organizational resilience. Identifying chronic pain points through diagnostic tools and benchmarking allows for strategic intervention. Building a recovery plan is not admitting failure but a proactive step to address issues before escalation. Leaders must be prompt in recognizing and addressing problems involving stakeholders and assessing readiness for collaboration or strategic shifts.
Blind spots are real; leaders must overcome the temptation to wait for improvement. Sharing experiences fosters a community of leaders navigating challenges, ensuring the continued success of their organizations. Let’s embrace lessons, leverage tools, and face the future with resilience, building stronger, more sustainable nonprofits.
It’s important for nonprofit leaders to keep learning and stay connected with the wider community to navigate changes effectively. To further improve their understanding of large-scale disruptions and implementing change in their organizations, nonprofit leaders can explore these additional resources:
Nonprofit Sustainability: Making Strategic Decisions for Financial Viability
by Jeanne Bell, Jan Masaoka, and Steve Zimmerman.
The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World
by David La Piana.
The Successful Nonprofits Podcast
by Dolph Goldenburg covers a range of nonprofit management topics.
The Nonprofit Leadership Podcast
by Rob Harter features interviews with nonprofit leaders sharing their experiences and insights.
Joining nonprofit networks like the National Council of Nonprofits or local nonprofit associations, like the Nonprofit Partnership can provide valuable peer-to-peer learning opportunities.
Consider engaging with consultants or consulting firms specializing in nonprofit management and change management, like C&A: Social Impact Consulting.
