Economic Whitewater: A Tired but Apt Metaphor

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As many of you know, I travel a lot, although I don’t often get to stop, be there, and savor the place. But, a few weeks ago while in Colorado, I did just that and went whitewater rafting. We had a guide who knew the current and where all the rocks were, so I emerged thrilled, but not injured.

More recently, I spent a day with a bunch of community agencies in the basement office of a city building, and realized that for many community organizations, the rapids ahead are as yet unknown. From the economic downturn to the change of administrations, most of the groups that I have been talking with say openly that they have no idea what these major events are likely to mean for their public funding.

Many nonprofits I have talked to recently also feel that organized philanthropy is acting differently, offering less general operating money and more and more wanting to drive the bus. Some individual donors are possibly becoming more cautious in light of the economic climate. Simultaneously, health care and other embedded costs of doing business — like fuel for instance — are skyrocketing. I think we have to assume that there are many hidden rocks and swift currents in the river immediately ahead, and that many of us will, for a while, be in those rapids. We need to be ready for them.

That means that organizations and their boards need to anticipate the unexpected and be ready to negotiate their way forward even if it is not in the way that was planned. I have a few suggestions born of my own experience in such times:

  • Build your collective agility: Work closely with the board to ensure that your budget is understood and that panic, despair or blame is not the order of the day if things get difficult. Making sure that there is a common understanding of your core mission can be very helpful, particularly if things get spare and you need to reorganize.
  • Get connected: Make use of state, local, and field-wide networks that help forecast changes in the environment and can organize nonprofits to take on difficult state policy issues that could impact your work.
  • Get active with these networks and help them to work well for you. Talk to peers about what they are thinking about in the face of things like flat rate reimbursements, and opportunities to take collective action will emerge.
  • Strive for flexibility: Revisit your use of volunteer talent (which should be done for a whole host of important reasons, really) to strengthen your economic resiliency and political positioning.
  • Accumulate as much unrestricted money as possible and try to avoid making decisions, which limit your liquidity.

To help with this last consideration, I recommend you re-read Clara Miller’s Truth or Consequences: The Implications of Financial Decisions from the summer issue. We would love to hear your suggestions or thoughts. If you reply, let us know if we can post your comment or simply comment on the article on our Web site.

Meanwhile, I want to wish you the best as summer winds to a close. Find a trashy book and small portable radio maybe and, if you can, enjoy even a short respite in some corner of the world you enjoy.