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New York State Health Foundation recently announced it will dedicate a portion of its funding to support vital NY health non-profits to “transition to new and reorganized forms” that will be more sustainable over time. This is an excellent example of funders understanding the real impact this recession is having on NPOs and supporting proactive change.
As I have written time and again in this blog and in my articles (see “Strategies to proactively assess the impact of the recession” and “Leaner Times call for Leaner Measures”), tough economic times can be just the catalyst needed for non-profit organizations to develop new strategies to become more efficient. Strategically restructuring operations can strengthen the capacity of organizations. Assessing your financial status, the cost per program and assessing the impact of these programs as well as implementing strategic cost containment initiatives will allow organizations to have more clarity and impact in their work and it also is often a catalyst to consider innovative approaches and collaborative initiatives such as joint ventures, outsourcing, joint purchasing programs, mergers and management service organizations. The recession may be the catalyst the non-profit requires to seek innovative approaches to the way they operate, and now funders are starting to fund these new approaches. As non-profits would not have to pay for these services - if money is accessed through restructuring funds made available by funders, than non-profits have nothing to lose by assessing whether they are candidates for strategic and financial restructuring.
In a time where budget deficits are rising and only 12% of US non-profits expect to end the year with an operating surplus (Nonprofit Finance Fund), it’s great to see funders acting progressively to support fundamental and lasting changes in non-profit organizations. Non-profits can leverage this by becoming more intimately acquainted with their programs, assessing their impact and assessing the financial models used to fund programs and services.
Have you heard of any funders in Canada supporting similar initiatives? If so, please share! Email Betty Ferreira at blog@restructure.ca
Click here to read the announcement from NY State Health Foundation.
The article Strengthen key relationships: collaboration and the economic downturn quotes the CEO of the NCVO (The National Council for Voluntary Organisations) as saying “Charities that diversify their funding streams, collaborate with partners and get their income strategy right are more likely to weather the current economic crisis and emerge financially secure on the other side.”For more information, tips and strategies on mergers and collaborations please read Strengthen key relationships: collaboration and the economic downturn, and view the collection of articles in the "Restructuring Information & Resources" and "Non-Profit Mergers Information and Resources" sections found below (in the www.nonprofitrecessionwatch.com blog).
One of the many, many things I admire about the non-profit sector is its ability to innovate and survive in the face of adversity. There are many examples that I could provide to demonstrate this resilience, but I will focus on just one of the most recent ones that were profiled in the NYTimes.com in their article "As Detroit Struggles, Foundations Shift Mission". Over a dozen Detroit foundations have decided to pool their money into an emergency fund for struggling charities, and they are also investigating ways in which they can strategically use funds that have been ravaged by the stock market decline. By pooling their funds, approximately $100 million over years from 10 foundations, this collaborative foundation network will attract skilled workers to the city, fill empty houses, and occupy empty retail storefronts. The impact of collaborating and leveraging expertise and funds has led to a refreshing strategic approach to the issues facing the Detroit economy.
Not only will this pooled fund leverage the capacity to restructure Detroit's economy beyond the capacity of any single foundation, the effort has also attracted additional funding from three national foundations (W.K Kellogg, Kresge, Charles Stewart Mott) which will further enable this collaborative foundation network to fulfill upon its mission.
Do you know of other collaborative initiatives that have arisen as a result of the recession - either on behalf of foundations or non-profits? I would like to profile them - email me at blog [at] restructure.ca.
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