By Kate Barr
Maybe it starts with the news that your organization has lost a major grant. It could be new criteria or requirements for a government contract that your organization can’t meet. It can even be the result of the exciting announcement that your organization has been awarded a significant multi-year that will increase your budget by almost 50 percent. No matter what the cause or activating event, there are periods of time an executive director can point to and declare, “That’s when everything changed.”
Every nonprofit has a business model, which we define as the system an organization creates to bring in resources and use them effectively to create and deliver value, achieve mission, and build the capacity to endure. Hopefully your business model works well enough for your organization to be stable, and hopefully to thrive. However, when there is a disruption to that system – either negative or positive – everything changes.
When that moment comes, what does a leader, or team, need to do? Because we’re in a period of many changes and uncertainty in the sector, I’ve been reaching out to executive directors who have led nonprofits through seismic change and listening to their experiences. Here is a summary of the lessons and insights I’ve heard:
Face the (Non-Sugarcoated) Financial Facts
Gather good financial information, including an accurate understanding of the financial position, the real cost of programs, and the amount of unrestricted cash on hand. One “uh-oh” has a tendency of unearthing other surprises; know what you can now to avoid surprises that could have been predicted and managed beforehand.
Get the Right People on the Bus
We just finished Good to Great and the Social Sectors by Jim Collins at our staff book club, and of all the lessons he’s learned studying greatness, he points to having the right people in place as most important – the “first who” concept. This means the ongoing work of hiring and developing a team of self-motivated people who are fully vested in the mission. For organizations in the midst of change, that also means identifying the people who will be a part of leading through uncertainty.
Additionally, be sure you’re connecting with other leaders – both within and outside your organization.
When the Road Curves, Hone in on the Destination
Keep your mission at the center. Change can cause shortsightedness. You can combat myopia by continuing to question, investigate, and challenge assumptions. When you start to feel overwhelmed, take a step back for perspective and remember what drives the work you do – and be sure your own ego is not getting in the way.
Don’t Forget About YOU
There are two key points here: Find – and lean on – your support network, and second, protect your time. Fight the need to control everything and remember that if you run out of gas, it won’t matter who is on the bus or where it’s going.
That said, know that others are relying on and looking to you. Be willing to make the hard decisions, and there will inevitably be hard decisions. Keep listening and learning. This is a good reminder for me, too, as we continue to manage our own changes following a merger. Again, hard decisions are made easier – and trusted more – if those around you know the goal, but also know you care.
Prepare Now: Change is Always Closer than You Think
I was asked recently when nonprofits should start preparing for a change. My answer: “Right away, and always.”
In the end, you’ll never be able to fully avoid change and the hard things that can come with it – stress, uncertainty, and doubt. However, if you’ve invested time in building trust both within and outside your organization, creating a culture of adaptability and questioning, and maintaining discipline on the things that are mission critical, change can be easier – and in fact, leave you stronger and more resilient.
Financial Terms Your Need to Know
When your staff starts talking about your association’s financials, do you feel like they’re speaking a different language all together? Worry no more. Propel Nonprofits offers a Glossary of Financial Terms for Nonprofits that includes easy-to-understand definitions of terminology commonly used in nonprofit finance like accounts payable, balance sheet, capital campaign, endowment, in-kind contribution and much more. The glossary is also available to download and share. Find it at www.propelnonprofits.org/resources/glossary.
Kate Barr is president and CEO of Propel Nonprofits, which provides a holistic approach to services that meet a larger set of nonprofits’ needs, including the ability to more closely link strategy, governance, and finance and to support nonprofits throughout their organizational lifecycle. To learn more, visit www.propelnonprofits.org.
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