How Nonprofits Can Thrive in a New Reality

Not surprisingly, 2008 and 2009 saw the largest drops in giving in more than 40 years. And most government agencies continue to tighten their belts, so many nonprofits traditionally bolstered by government funding face 
additional challenges.

But there are positive signs. According to the Giving USA Foundation™ and its research partner, the Center on Philanthropy at Indiana University, total charitable contributions from American individuals, corporations and foundations grew 3.8 percent between 2009 and 2010, from $280.30 billion to an estimated $290.89 billion.

Despite these tough economic times, Americans still support organizations and causes that matter to them. Nonprofits that remain focused while adeptly fine-tuning strategy can emerge stronger and more effective. Now is the time to strategically plan for the future, firm up board support, refine communications and evaluate current philanthropic models.

Last summer, we at Lighthouse Counsel informally surveyed leaders from across the nation, asking their advice for what nonprofits might do during this challenging time. Based on their insight and our own experience, here are five steps to help nonprofits stay on course:

1. Attract the best team. Your organizations — and those you serve — deserve the best. Since the quality of your staff and board determines your success, recruit and hire the right people, setting your sights on a first-rate team.

From social-service organizations to major universities, the nonprofit sector has a track record for recruiting excellent leaders who thrive when surrounded by committed people with a compassionate, compelling mission. Sometimes it takes time to put a team together. I recall keeping a position open for more than a year, waiting for the right person to hire. Despite the extra workload, it ended up being a great decision; she was a star and worth the wait.

2. Create an engaging plan. One survey respondent put it best: "Don't be afraid to dream big! Be brave in what you attempt while also being pragmatic, realistic, appropriately cautious and generally sensible."

A big part of making that dream a reality is to develop a plan with the necessary steps for getting there. It's critical to create goals and put them in writing, whether it's a simple one-pager or a more complex document. Operational plans — for development or advancement, a targeted annual fund drive, strategic communications, or services your organization provides — allow your organization to focus and support a broader vision.

For nonprofits, a strategic plan with a three- to five-year horizon, revisited regularly and formally benchmarked annually, is essential. Have an engaging planning process; a dynamic plan pays off exponentially. However, be sure to gain closure. We've seen some organizations spend well over a year to create a three-year plan! Build your plan on experience, but also on determination and hope.

3. Lead to inspire. Difficult times require proactive leaders who see and pursue opportunities — leaders who know the value of a team, and who coach and mentor staff and volunteers, as well as listen intently and take counsel. Being trustworthy and self-assured goes a long way in inspiring others to follow a plan with an eye on the future.

In times of belt-
tightening, donors want extra assurance that their donations will be handled intelligently and with integrity. This issue was heavy on the minds of a group of Rotarians I recently spoke with. After making a presentation on philanthropy in America, the question-and-answer session focused on nonprofit ethics. As nonprofit leaders — professionals or board members — we have both a moral and legal obligation to safeguard the institution.

4. Communicate for impact. Poor communication has derailed more causes than an economy ever has. Create a sound communications strategy, and be consistent. Your team must implicitly know and understand your mission: Where are you going and why? Be clear and concise. Simple language is always best.

There's no substitute for personal contact and dialogue. Even with today's technology, there's nothing like face-to-face meetings with clients or donors. A mix of electronic and social media, supplemented by good, old-fashioned written communication (especially personal notes and letters), is advisable. Most importantly, know your audience and the most effective way of reaching it.

5. Make it happen. Now, marshal your resources and move forward! Don't let uncertain times push you into neutral — or reverse. Certainly be cognizant of the market, but have faith in your people, plans and passion. Be sure to gather feedback along the way and evaluate your efforts. Above all, adapt a "make it happen" attitude — and it will! FS

Jeff Jowdy is founder and president of Lighthouse Counsel and a member of the FundRaising Success Editorial Advisory Board. Reach him at jeff@lighthousecounsel.com