When Pivoting in Times of Crisis, What Should Small and Medium-Sized Nonprofits Prioritize First?

Welcome back to Ask a Nonprofit Expert, NPQ’s advice column for nonprofit readers, by civic leaders who have built thriving, equitable organizations.

As always, this series offers Leading Edge members the opportunity to submit tough challenges anonymously and get personalized advice. In this column, we’ll publish answers to common questions to strengthen our entire community’s capacity.

In today’s issue, longtime nonprofit strategist and organizational change consultant Jeanne Bell answers a reader’s question about pivoting in a time of crisis.

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Dear Ask a Nonprofit Expert,

When pivoting in a time of crisis, what should nonprofits prioritize first? Diversify funding, get the board and stakeholders into strategy conversations?

What else do you advise?

Sincerely,

Organizational Pivoter

Dear Organizational Pivoter,

The things you list as crisis responses—income diversification, strategic thinking—certainly are important. To complement your ideas, I offer three potential pivots that may be less comfortable to name out loud, but that I think are equally important to the long-term sustainability of organizations:

• Initiate necessary staff separations
• Reduce or eliminate office space
• Walk away from the wrong funding

Initiate Necessary Staff Separations

For a range of complex factors—from our values of equity and belonging to our habits of conflict avoidance—nonprofits are not very good at initiating graceful separations from people who are no longer thriving at the organization. In some cases, we prioritize the needs of a single person over the wellbeing and flow of the rest of the staff. Or we allow people to remain in roles that are no longer strategically necessary to the organization’s theory of change.

While leaders should not wait for financial threat to make these hard separation choices, it is true, in my experience, that times of crisis can be very clarifying as to who must be part of the organization’s future and whose time may be at a natural transition point.

In “Seizing and Sharing Power: Seven Critical Levers for Today’s Leaders,” her recent NPQ Leading Edge webinar, Karla Monterroso of Brava Leaders made a provocative case for employee severance, which is government-mandated in countries like France and Japan but not in the United States. In her analysis, it more equitably distributes financial risk between the organization and the employee.

“I am of the personal belief that everyone should be guaranteed at least eight to twelve weeks of severance as a standard,” she said.

If more nonprofits had transparent, values-based severance policies as part of their employment and compensation philosophies, employees would always know that they have transitional financial support when either they or the organization deems it time to move on.

Reduce or Eliminate Office Space

The hard questions for leaders today are: What kind of space(s) do we need access to, at what frequency, and for what price?

COVID-19 changed nonprofits’ relationship to office space fundamentally, especially for non–direct service organizations without clients who need to visit a physical space regularly.

Propel Nonprofits Senior Lender and Financial Management Specialist, Allison Wagstrom, recently told NPQ’s Steve Dubb: “People are needing access to large spaces to…gather as groups, to do cultural celebrations, to engage in one-on-one and group activities. Whether or not they need access to a five-story building with cubicles is another story, but buildings are still needed.”

So, the hard questions for leaders today are: What kind of space(s) do we need access to, at what frequency, and for what price?

Like most cost-cutting decisions, reducing or eliminating office space is by no means an easy one. There is plenty of evidence that organizations are struggling to reset expectations around presence and collaboration in a virtual context.

In their article for Harvard Business Review, “Hybrid Still Isn’t Working,” Peter Capelli and Ranya Nehmeh argue the following:

Some issues caused by remote work are so widespread that most managers can safely assume their company has them. The most obvious is the ineffectiveness of virtual meetings. Rules governing them are long overdue, and many are easy to implement. For starters, limit attendees to those involved in the issues or decisions at hand. And since we know that when cameras are off participants are not paying attention, institute a simple rule: Your camera must be on or don’t attend the meeting.

While that guidance may sound harsh, I would offer that several years into hybrid and virtual nonprofit workforces, it would be disingenuous to say that organizational protocols are not needed to level set everyone’s accountability to healthy group process. Indeed, if the pivot of going hybrid or virtual is chosen, recognize that a significant investment of staff time, on an ongoing basis, is required to design and facilitate collaborative work.

Walk Away from Grants and Contracts No Longer Serving the Mission

While we often look to income diversification for financial sustainability, an equally important option is to discontinue delivery promises for work that is no longer central to your theory of change. As grants and contracts expire, leaders should revisit the centrality of the work before assuming that renewal is your best option.

Walking away from money is one of the highest-agency steps an organization can take in times of crisis. It communicates, We know where we are most impactful and we are choosing this lane over that one.

Moreover, grants and contracts are often how we rationalize keeping staff positions and office space that may no longer be mission-critical in our portfolios. There is a common sectoral habit of saying, “That’s paid for, no need to cut that.”

First, individual grants and contracts almost never fully pay for a whole person or a physical place, so that assumption must be carefully interrogated on a funding source-by-funding source basis. And second, retaining people and programming over time because they are funded is not inherently strategic; in some cases, it is strategic inertia.

While each of these three pivots poses serious change-management challenges to nonprofit leaders, they are aspects of the deep, structural changes to programmatic business models that many will have to make to sustain relevance and financial health in the challenging months and years ahead.