Also, as ReStructure is developing a similar conference to be held in May in Toronto (see http://www.therestructureconference.com/), I wanted to visit the sessions, see the information presented, and more importantly, assess how the participants responded to the information provided in the workshops. Information about the recession and what funders and leaders have to say about it...
Although I do not like to provide information that provokes hysteria unnecessarily – this information is not scaremongering, this is why: governments in the US will be drawing on less tax revenue, due to declining property taxes due to the foreclosure crisis and due to declining sales tax revenue as a impact of the layoffs (people are buying less) – this tax revenue finances community programs and other NPO initiatives, and so NPOs should prepare themselves for less government funding.
How much less is still unclear, but NPOs should not ignore this warning sign and start to develop and implement strategies that will stem this tide.
Government representatives openly shared information on how bad the economic situation is, the expected county and state deficits, and warned NPOs that cuts are likely. Their participation in this event is a wonderful sign of collaboration, transparency and accountability. In addition, it is also a good sign of further collaboration between NPOs and funders to work together to brainstorm on effective ways to protect the sector.
While the situation is Canada is not as dire as that in the states, Canada (as we now know by the number of layoffs already announced), is not immune to the recession. In addition, as Canada has traditionally lagged 12 – 18 months behind the US in realizing the full impact of a recession centered in the US, and as diminished revenue from taxes impact government this year - it is likely that both Canadian and American non-profit organizations will experience difficult times in 2010.
Funders and leaders of non-profit organizations should keep updated on the economic impact on government, foundations and individuals and work with together throughout this journey to collaborate on more resilient funding and operating models that will seek to support and protect non-profit organizations at this time AND use this opportunity to leverage change to fortify the sector in the long-term.
Current program specific funding models, funding requirements and government legislation to limit necessary operating infrastructure need to be given a hard, serious and look, and changes must be made that understand the basic principles of organizational resiliency and enhance the value that the NPO provides this country.
It’s time to look at measures that are based on outcomes and impact – isn’t that what our sector is all about? Yes, it is – so, let’s work on this together to align the sector’s purpose with its reality, and the reality of what it takes to operate a social business. All too often non-profits are assessed against administrative ratios that have nothing to do with effectiveness and that minimize an already fragile and stressed operating model.
True measures of effectiveness as well as funding and operating models that are based on the short and long-term resiliency of the sector are required to protect the NPOs ability to further contribute to a healthy, socially just and democratic society – it’s in all of our best interest.
Funders in the US appear to be responding relatively well to the current economic crisis in the US. Their participation in this forum is one sign as is the research reports highlighted in my blog of March 10th demonstrate that (scroll down).
Stay tuned for my blog update tomorrow where I provide you with some of the tips, strategies and resources provided during the Nonprofit Forum, and some of the strategies and tips that I have used in restructuring organizations as well.
If you are looking for some information and strategies on restructuring, and can’t wait until tomorrow, check out the articles provided in the restructuring sections in the http://www.nonprofitrecessionwatch.com/blog.
As a final note – I just wanted to thank CompassPoint for coordinating this day. The forum was well attended and well coordinated – kudos to all who participated in its development.