In addition to the impact of the economy on for profit companies, the financial health of our nations non profit groups are rapidly deteriorating.According to a survey of some 900 non profit leaders conducted by the Nonprofit Finance Fund, only 12 percent of those organizations expect to end the year with an operating surplus, compared with 40 percent who ended their most recent fiscal years with money on hand.
More than half of the respondents stated they need assistance communicating their financial difficulties to their boards and donors, underscoring a growing trend in the non profit world that government and the public ‘at large’ do not fully understand the important role they play addressing causes in need. This presents further challenges for stakeholder connections, mobilization and support to get ‘back on track.’
The non profit/NGO sector and heritage has been at disadvantage to the for profit sector due to society’s perceptions about growth restraints and use of dollars beyond anything other than directly to program and services expenditures. Meanwhile, the for profit sector is permitted to use all the tools of capitalism to advance the sale of its products and services to consumers, need for track record of earnings and increased revenues.
Paradigm Shift.
Not for profits are being forced to change the way they operate, eliminate silos and conduct business due to the growth of social responsibility and changing dynamics of philanthropic giving. Mere ‘check book’ philanthropy will no longer suffice, with 60 percent of corporate contributions now attributed to the donation of products, services, counsel and staff volunteering.
Now, our suffering charities need some tools of capitalism to survive and continue to fight for societies causes most in need such as poverty, health care and human rights. On a broader strategic platform:
- They need more strategic, integrated partnerships and policies to establish a social safety net for the world’s most vulnerable people. In addition to food and nutrition support for drought-ridden populations and displaced people, there is the urgent need for growing more food in food-deficit regions such as sub-Saharan Africa, Haiti and Afghanistan.
- Bridge the gaps in life-saving health care that address major diseases such as HIV/AIDS, TB and malaria.
- Advocate for long term sustainability by directing global public investments to renewable energy, energy efficiency and combating climate change.
Meanwhile, we are still bombarded with fund raisers, donor appeals and volunteer opportunities – and – we have scaled back on our giving, become more skeptical, want more accountability and demonstrated results for our contributions.
And, we need to be better educated about causes in need and selections to make.
Not for profits, not only need the money, but need our time and more strategic, longer-term partnerships.
Following are some guiding principles for both for and not for profit organizations to establish stronger and more sustainable partnerships:
Not for profits:
The new rules of the ‘Ask’: Understand the corporation’s social and environmental vision and mission. Aside from the $$, assess product and services contributions, as well as developing educational initiatives and co-branding opportunities.
‘Story telling’: Do a better job at forging deeper connections with key stakeholders by telling stories, showing the work and ‘harsh’ realities of causes in need.
Brand relevance: It is really important to differentiate especially when donations are down and fight for limited dollars at an all time high. Further clarify, articulate and justify your mission, on and offline.
Stakeholder empowerment: Make donors and volunteers feel inspired about the mission, programs and beneficiaries. Reward them with acknowledgement and impact of their contributions.
Web 2.0: Embrace the tools and technologies to build media and social communities. Need I say again, the Obama campaign raised the bar on social and community mobilization.
For profits:
Selecting the cause: Poll and understand what causes mean the most to your company and key stakeholders in the context of the business value proposition – especially employees and customers – and what they want you to advocate for on their behalf.
Choosing the non-profit: Review the CEO, management, board, operations, vision, impact and resource needs of their programs and services – in addition to and beyond the $$ contribution.
‘Show and Tell’: Research and understand the cause, visit and/or see the project, programs/services, staff and clients.
Mobilizing the community: Volunteering is on the rise and to be encouraged among employees. Ensure staff are educated, provide ‘on site’ support and percentage allocation – individual social responsibility is increasingly being assessed as part of job performance.
Sustainable program development: With sponsorships down, develop longer-term cause-related marketing opportunities that include grass-roots community education and awareness campaigns.
Don’t take all the credit. Non profit/NGO partners should be included and acknowledged in the partnership, along with progress and demonstrated results.
For and non profit/NGO’s have a unique opportunity to commit and be braver establishing compelling new partnerships that we need to pull us through this crisis, have a fairer, more transparent and sustainable future.
Sam Taylor
Sources: Nonprofit Finance Fund.
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