Wednesday, April 28, 2010

HURRY UP! Your Future May Be Behind You

Old friend and esteemed colleague Marilyn Hoyt has weighed in with her take on the year so far. By permission here it is:

The first quarter of 2010 is now completed. Where are we?


Recruiters and job post-sites indicate that staffing volatility has begun:

1) Some nonprofit colleagues are moving on because they have lost confidence in their organizations…or their supervisors and/or Trustees have lost confidence in them.

2) Some colleagues are moving on because they see flat budgets and more-of-the-same extending for years and hope to find a position where they can work on a larger palette and try new ideas once again

3) Some nonprofit organizations are pushing out existing staff and/or re-organizing in the hopes that new staff can accomplish something at a much higher level than existing staff

4) The most senior staff members at many nonprofits took salary cuts in 2009 and most of them are still in place. In 2010, other senior staff people are being asked to take cuts. (The 4/26/10 issue of the New York Times has a local story on this).

There are key lessons for all of us in this trend:

1) Those of us who supervise others need to take heart of new research findings, e.g. Drive: The Surprising Truth about What Motivates Us and remind ourselves that “optimal performance comes when people find intrinsic meaning in their work.” How can we be sure that those employees and volunteers we want most to retain have meaningful work?

2) Those of us who are looking toward the next step need to assess both our skill set and our desires. What kind of work do we do best? What kind of environment do we need to work effectively? There are a lot walk-on-water positions being offered right now. And as a colleague recently noted: “I understood I’d have to walk on water but I didn’t know I had to pump it myself.”

Foundations and family foundations are hanging in

1) Enough new foundations formed in 2009 that they not only made up for those that terminated or merged, but actually increased the foundation total from 96,000 to 98,000 by 2009’s end.

2) Across the country foundations are reducing the geography or program priorities and/or instituting skip years, and/or reducing the size of their grants. Although active foundations are still working with their traditional grantees, a number are also making first time grants.

3) Foundation’s generally establish their 5% grant payout requirement using a multi-year base – very often 3 years. So it will be 2011, 2012 before we see an upturn in their giving, even though many are seeing their corpus growing again with recent gains in the market.

Nonprofits are experiencing many of the same issues as for-profits

The good news out of this is that as recovery begins, we can make use of the thinking and even the working models the corporate sector is developing. A recent e-discussion of the Harvard Business Review Advisory Committee circled around these questions (summarized here from the original communication):

1) To what extent were staff cuts driven by bottom line goals?

2) As a result, to what extent are remaining staff now working outside of their core competence or across too many areas of accountability?

3) To what extent are key goals and their relationship with mission diluted? In their absence, what drives priorities? Do employees have a sense that there are priorities?

4) Is staff morale a problem as the company begins to recover and expectations rise?

Corporate foundations are looking for efficiencies

1) Electronic application forms are now a faster growing trend than before the recession

2) Cybergrant and other outsourced corporate grant managers are beginning to replace corporate foundation staff. (I am hearing about this in the Midwest and Southern California at this time. Not yet in other regions)

There are going to be fewer of us

1) With 2009 histpry, each of us is now seeing an unprecedented number of nonprofits closing their doors in every one of our fields…from dance companies to hospitals.

2) Talks of merger draw press attention but it’s too soon to tell what success they bring. (i.e. Dance Theater Workshop and Bill T. Jones/Arnie Zane Dance Company. ) And it’s too soon to tell how this will work. The last time we saw this intense merger activity was in the mid-90’s and following when hospitals formed networks to negotiate better terms with HMO’s, and ultimately doctors, suppliers and other insurers. The Stanford Social Innovation Review is currently running a free podcast by David LaPiana who consults nationally on a number of strategies ranging from shared administrative services to full mergers.

3) Some project 400,000 of the 1 million + 501(c)3’s will lose their nonprofit status as the IRS begins requiring all nonprofits (not just those operating at over $25,000) to have filed 990’s for the last three years. The filing deadline is midnight, May 15th.


For those of us raising foundation funds: Foundation Giving Forecast Survey, April 2010, Foundation Center

For those of us with teen programming or outreach: Teens and Texting, Pew Memorial Trust

For those of us finding that our traditional corporate partners are now viewing philanthropy through the wider lens of corporate responsibility: How to Read a Corporate Responsibility Report, Boston College Center for Corporate Citizenship. When you sign up for this report as a free subscriber, you can also check off to receive Voice of Corporate Citizenship, a monthly newsletter that serves as a window into corporate thinking on corporate social responsibility.