Funding Changes Are A ‘Comin: How Nonprofits Can Prepare

federal, budget, nonprofit, social, enterprise

The news on the national budget is sobering. Honestly, these days I’d rather watch lions chase those poor gazelles than to check the news.

But today’s Friday. Let us grieve, catch a “WTH” margarita on happy hour and then let’s get to work.

(For now) this is our new reality, and it calls for a new response. It calls for organizations to take center stage in this whole saving the world thing. To do this we have to revisit our ideas of what social impact organizations look like and do. Here’s one hint, sitting on the sidelines of world history surviving on 4th hand equipment and scarcity ain’t it.

As we come down from reeling, what we all  should do (nonprofits and social enterprises alike) is: 

Revisit The Business Model

Don’t know what a business model is? Well, why don’t we start there because you should.

Admittedly “business model” is a term that’s been usurped by the black turtleneck set. But essentially, a business model is how you plan to make money.  Think about it, when’s the last time you sat down and deliberately thought about the different ways to earn revenue? 

Diversifying income has always been a touchy subject for impact orgs, but to overcome the deficit in government funding you’ll have to brainstorm creative new ways to bring money in. Naturally, if yours is a charity everything will need to be on the up and up with state and federal restrictions. But creating several strong revenue streams is absolutely possible, and at this point it’s an imperative. I’ll write more on this later, but to get you started here’s a popular treatise I’ve always found helpful:

 Business Model Generation is great for understanding what factors play a role in the money we make and the money we spend. But this book shouldn’t be the only resource you turn to. Acumen and Kiva also have great materials on business models in the impact space. And once you’ve gotten a handle on what your business model is, continue innovating on it with this book:

Engage in Change Management 

I was really excited to hear the Houston Arts Alliance talk about this, and have been hooked to the topic ever since. Organizations like EmCArts, BridgeSpan and Nonprofit Finance Fund are leading a conversation on the importance of “change management.” Which is the process of thoughtfully thinking through, planning and most importantly FUNDING changes or innovations within an organization; with a focus on managing uncertainty and resiliency. 

Change management allows you to make changes and experiment, without having to choose between using resources on experimentation or general ops. When dealing with any sort of un ertainty (a proof of concept, new revenue stream, pivot, program change, new product, etc.) change management is where you’ll want to look. Engage local councils, associations or outside experts to talk about what change management looks like for you. Especially if you rely heavily on federal funding and/or procurement. 

Just know, these conversations may challenge long-held beliefs and ideals, requiring you question the status quo.  So the conversations can be tough and result in not so fun decisions, like charging for a previously free service or bumping up a price. But they also open a space for really innovative thinking and breakout moments. Coming up with new techniques, methods, processes or technologies. 

I’m currently sorting through change management resources for nonprofits and social enterprises. I’ll post them to my Goodreads bookshelf when I’m done.

Partnerships, Partnerships, Partnerships

Thought-leaders have spoken on the importance of partnerships for years. If you’re not already on the train, now is the time to meditate, do a quick chant and dive in.

And hey, the energy that comes from sharing ideas, resources and audiences is truly catalyzing. Not to mention, funders are requiring grantees work together where there are synergies or cross over. So it’s in your best interests to get on this bandwagon sooner than later. 

But as is true with choosing a Pictionary team, not every partnership is a good one. That’s why its so important to pay attention to this now. The sooner you’re onboard with partnerships, the sooner you move on to building capacity around partnerships. Discovering which partnerships add value and which don’t. The best ways to facilitate and the destructive behaviors. 

If there are programs, services or goods you offer with incredibly small margins, or that are super resource intensive, what partnerships could you create to ease some of the burden? If you don’t have the budget the develop an audience, market, print materials, etc. what partnerships would allow you to leverage this from someone else, while contributing at the same time?

Two great books for looking at network and partnership development are:

Listen, social impact organizations are innovators. They are catalysts. And they were doing entrepreneurialism before it was cool.

Stepping in where the government can’t or won’t is the fire from which impact organizations are born. This is nothing new, it just requires getting back to impacts roots of curiosity, entrepreneurialism and community building. You got this.