Monday, July 27, 2009

Seismic Shift: The Changing Nonprofit Landscape

We live in interesting times. Concurrently, two large events are interacting and impacting nonprofits. The first is the economic recession. The second event is a seismic shift that involves fundamental changes in the nonprofit landscape. With my binoculars, looking beyond the recession, here is what I see in the emerging landscape.

1.Fewer Nonprofits—perhaps 10 percent or more. Most of the closures involve “paper and dream nonprofits”—that is, people who formed nonprofits around a dream, but lacked viability. Others will fold who provide essential services. To continue to meet your mission, consider if you need to add some of these services to your nonprofit’s portfolio.

2.A Dual Focus on Outcomes and Savvy Communications. The outcome focus is not new, what is new is the understanding that outcomes alone are inadequate. If a tree falls in the forest and there is no one there, it doesn’t help your cause. Those who thrive will provide outcomes plus have the public relations savvy to successfully communicate why these outcomes are important in the noisy market.

3.Earned Income. While not new, the recognition of the importance of this revenue source is growing. In the post-shift landscape, successful nonprofits will create several sources of earned income from their services or related business activities, i.e., thrift stores, concession stands or armbands. To compete, as a nonprofit leader you need expertise in running both types of operations.

4.New Ways of Creating Communities. Your new community can include your donors and everyone interested in your effort. Facebook, Meetup and similar Internet opportunities are the large portals of new communities. Smaller portals include short-term work groups where participants from across the world meet three or four times by telephone to create work products. Instead of joining large neighborhood animal clubs, people join communities around very specific interests. You can create a community of people interested in puppet shows for the hard of hearing and smaller even more obscure communities.

5.Money Based Partnership. Related to the above and also stimulated by recession, people are creating information-based partnerships to produce outcomes at less cost. Many of these money partnerships will be tried and institutionalized with a handshake. Others will be tried out and abandoned. Partnership conversations begin with questions like, “What are you paying for this service?” “Can we save money by joining together?” “If we do this together, what are the financial benefits?”

1 comment:

  1. From my perspective, this is right on. I would add one other item, however. I believe that the role of governance will extend outside the boardroom. To remain viable, nonprofits will have to go to the community for not only its input, but its participation in decision-making. Boards have proved they are not very good at bringing the community's voice in. This may be the only way to ensure that the community's true needs are, in fact, being met.