As I write this, we are 100 days into the new presidential administration. Needless to say, it’s been a time of chaos and great uncertainty, characterized by sweeping actions and dramatic changes across many sectors.
Planning for the future is difficult under the best of circumstances — there is much we can never fully anticipate. But the speed and magnitude of the recent changes makes planning especially difficult.
With that as background, here are four things I am suggesting to my nonprofit clients…
#1. Assess Your Situation
It is more important than ever to understand where and in what ways you may be vulnerable. That starts by identifying your sources of revenue and funding, and the potential level of risk associated with each.
- Federal research grants? At significant risk if not already impacted.
- Individual donations? Will likely decline if we enter a recession.
- Financial reserves? How large are they; how might you draw on them if needed?
Also consider your supply chain and sources for products or services, as well as any compounding effects that could occur. For example, even though you may source certain products from within the US, to what degree do the producers of those products rely on materials from abroad? Further, how might changes in policies impact our immigrant population, thereby creating staffing shortages?
As you do these assessments, don’t shy away from the hard thinking. While it may be tempting to only consider situations where things are off by five or ten percent, you should also consider extreme scenarios in which more structural change will be required. Clearly, it is painful to contemplate some of these. But the more candidly you consider what could happen, the better prepared you will be for whatever does.
#2. Understand Your Core Value Proposition
What happens if some major sources of revenues or products for your most important stakeholders are reduced — significantly?
Though it is natural to believe everything you offer is highly important and valuable — you may be tempted to make uniform, across-the-board cuts, in the spirit of “equity” — some programs (and, unfortunately, people) are more essential to your core being than others. If push comes to shove, you need to identify which elements should be sustained (or even increased) and which should be reduced or eliminated.
Years ago, in my work with a division of the American Nurses Association, we determined that a core program — one on whose success several other programs depended — was not well understood by the market and needed additional promotion and marketing. However, they were not in a position to increase their marketing budget. By identifying less critical and productive areas, we were able to reallocate existing dollars and increase promotion where most needed.
When you look carefully and objectively, you will likely find that some of the activities you do or monies you spend are done primarily because you have always done them. Your strategy should serve as a guide in making these prioritization and resource allocation decisions.
Note as well that whatever you decide, these alternatives will not be as good as your current offers. But if they help your organization prevail through challenging times, they may be the best option.
#3. Draw Your “Red Line”
When some sources of revenues become vulnerable, other possible sources — ones that come with certain stipulations or that require you to engage in different activities — may appear. Unfortunately, it’s the rare organization that has the resources, the resilience, and the commitment to turn down essential funding during those times (as Harvard University has recently done).
That said, it is critical you know what terms or requirements you cannot accept without losing the soul of your organization. As Wharton organizational psychologist Adam Grant recently noted, “our greatest regrets are rarely failures to reach our goals. They’re usually failures to uphold our values.”
#4. Start Now
There is no reason to expect the next 100 days to be any less volatile than the last, or for the coming changes to move in the same direction as before. What we know and can try to plan around today does not necessarily prepare us for new issues in the coming weeks and months. So consider setting up a task force to actively monitor the situation.
This is also a good time to identify key trigger points — dates and data that will help you determine which scenarios are becoming likely, so you are ready to enact the decisions you’ve anticipated.
Reflections
In the face of rapidly changing and unpredictable conditions, you will not find a single solution that will serve your organization well. You need to understand what you have to work with and the range of flexibility available to you — and then monitor the situation regularly and adjust as needed.
Thinking through the hard choices now will make it easier — never easy — if you need to take action in the future.
