Nonprofit Strategies in Case of Another Economic Collapse

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July 15, 2012; Source: Seeking Grant Money Today

Fundraiser Arlene Spencer’s blog highlights the dire economic warning of economist Nouriel Roubini that the world is on the brink of yet another economic collapse and points to the nonprofit fundraiser responses of Global Philanthropy’s Trevor Neilson, plus a few ideas of Spencer’s own. Briefly stated, Roubini thinks the coming economic collapse will be worse than what erupted in 2008. Roubini attributes the all-but-inevitable economic crisis to: the world’s failure to come to grips with banking and financial sector failures; the impending Euro zone economic disasters in Spain and Greece; the slow or stalled recovery of the U.S. economy; weaknesses in major emerging markets such as the BRIC countries (Brazil, Russia, India, and China), particularly China’s “soft” fall—that looks like it will be a “harder” fall than analysts predicted; and instability in the Middle East, particularly the possibility of a war involving the U.S., Israel, and Iran.

Spencer—and Neilson—are taking the Roubini warnings seriously, rather than putting the happy gloss of “it can’t happen here” (again) or “we’ll be fine” (we think, we hope) as some nonprofit fundraisers typically do, viewing the glass as mostly full even as nonprofits are dying of thirst.

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In a piece published in the Huffington Post, Neilson recommends three strategies for nonprofits concerned about weathering a potential Roubini-scale worldwide economic collapse:

  1. “Think (sic) different about fundraising. Non-profits need…to add new and innovative fundraising strategies to their current approach…Crowd-funding, cause related marketing and other new areas in philanthropy should also be aggressively explored…
  2. Decide what not to do. For far too many non-profits, programs get created and continue to exist until they run out of funding, with little or no effort made to improve them or engage customers in any kind of real dialogue about what they want and need…
  3. Value performance over passion. Everyone who works in the non-profit world knows there is a performance problem, but no one wants to talk about it… Strong management teams can adapt and survive. Weak management teams will have hard time weathering the storm.”

Spencer seems to generally endorse Neilson’s recommendations and adds some additional thoughts:

  1. “(W)e as a sector must communicate openly and often about what each of us is experiencing, improving, learning, and finding successful…
  2. If our regional, state, and national leadership does not hear from our sector about what we achieve, how, and what we are being challenged by right now and why – how can we expect them to know how nonprofit organizations operate, what their unique challenges are, and what we accomplish? If your organization is a 501(c)(3), I am not saying lobby…Get with your lawyer, determine what can and can not be discussed – and steer clear of the off limits discussions…
  3. Retain donors and volunteers, and retain talented board and staff members. Create an endowment, save, cut costs, share expenses with other (sic) nonprofit, collaborate with other organizations to deliver expensive but necessary services and programs…”

Despite Spencer’s inaccurate take on nonprofit lobbying rights, she is arguing for nonprofits to tell donors and funders the truth about nonprofit finances during an economic collapse. That part of her prescription seems like good advice.—Rick Cohen

  • Arlene Spencer

    Rick, I appreciate my post being included in your piece if not also humbled by your explanation of my take on nonprofits and lobbying. While you are correct about nonprofit’s lobbying rights (as such), I err on the side of conservative advice as I write my blog posts especially when telling readers what to do with their organizations. I’d rather readers know what they’re doing when they go speak to a federal representative than go off half cocked. Perhaps I need to give them more credit. Having said this – you are right and I stand corrected. I still thank you for the mention!

  • rick cohen

    Keep up the writing, Arlene! I’m wont to offer modifications when I see issues about advocacy, when there are such good materials out there by the Alliance for Justice and the National Council of Nonprofits (now that the National Council has absorbed the Center for Lobbying in the Public Interest). The kind of nonprofit engagement you justifiably called for needs nonprofits to know their advocacy rights and to feel confident about the latitudes in the law that allow them to exercise free speech. So I’m sorry I jumped on you for that, it’s just a pet peeve of mine. But thanks for the blog and I’ll keep an eye out for your work in the future.

  • jay goulart

    These suggested strategies are off base and not remotely logical to adress what is being predicted. The suggestions take the focus off of doing the key work where 90% of all funding come from.