Franklin Forum: Nonprofit Pros Share Advice on Weathering the Economic Downturn

Panelist John Pearce II, VSB endowed chair in strategic management and entrepreneurship at Villanova University School of Business, shared the following insights related to nonprofits and their recovery from the economic crisis:

• The effects of the recession will last at least 12 to 18 months.
• In the years just before the recession, Americans were spending more than they made. Now they're saving 5 percent. While that's good, the effect is that less money is going to charity.
• There is a broadening acceptance of a "new consumerism," where Americans are re-evaluating spending priorities.
• Americans are volunteering 23 percent less.
• Venture philanthropy, giving circles, donor-assisted funds, etc., are ways nonprofits can improve performance, but they risk giving up some autonomy.
• Donors want assurance that they're investing wisely; they want evidence of tangible benefits of their gifts.
• A typical nonprofit solicitation is sent to a lot of inactive donors, which is a waste of money, as Pearce said lapsed donors are no more likely to give to an organization than someone who has never given.
• Whether it comes from a consultant or internally, competence in strategic planning is essential to getting through this tough economic time. "Anyone who can walk and chew gum claims to have experience in strategic planning," Pearce said, but this isn't so, and true competence in this area is vital.

The panelists also stressed the need for each organization to have a core competency, i.e., something it does better than everyone else. Figure out all of the things that you do that are related to that core competency and focus your energy on those.