On April 24th, nearly 700 nonprofit staff and board members gathered at California Science Center for the launch of the Nonprofit Sustainability Initiative (NSI). The original thought of the partners on this venture – California Community Foundation, Weingart Foundation, The Ralph M. Parsons Foundation, UCLA Luskin School of Public Affairs, Center for Nonprofit Management, LaPiana Consulting – was that maybe 200 people would show up. Wrong!
Within the first day of online registration, it was clear NSI needed a bigger room. Based on the compelling statistics and suggestions made by NSI, it would be easy to understand why.
According to the Nonprofit Finance Fund (NFF), nearly 60% of all nonprofits have 2-3 months of cash or less on hand. Though there are signs of improvement, our social sector is hurting (it isn’t snapping back to the “good ol days”) and at least 700 people know that. What NSI offers is insight and a path toward strategic restructuring. From collaboration to back-office consolidation to mergers, there is a wide spectrum of restructuring configurations.
The NSI convening offered real life examples of organizations who’ve merged, like Hollygrove and EMQ Families First. When the economic downturn went into high gear, Hollygrove began burning through its reserves at an alarming rate. They entered into a series of forward-looking conversations between board members and CEOs. Ultimately, they emerged with one organization. LaPiana says the key success factors to restructuring are trust, joint decision-making, shared culture, board engagement, good facilitation—all to move to a sustainable structure. As Hollygrove’s former VP of Development suggested: “It’s better to be a good 2nd Mate on a thriving ship than a captain on the Titanic!” So the ego is what we must submerge if we want to make sure the ship doesn’t.
In the next phase of NSI, thirty nonprofit organizations will have the opportunity to receive a confidential assessment of the readiness for partnership from LaPiana Consulting, a leading resource on nonprofit partnerships. Given the uptick in emergency fund request to CCF and other foundations, we hope many organizations will bite the bullet to at least explore the benefits of partnership—even if they decline to move forward.
In the frothy days before the downturn, there were no incentives to partner or restructure. Now, in lean times, a phase described at the NSI as the “new abnormal”, organizations face starker choices between withering away or revamping their business model.
Rare is the organization that can fundraise its way out of a persistent crisis.
Whether through the NSI or other means, I hope today’s nonprofit leaders and board members remember Michael Jackson’s sage advice: “If you want to make the world a better place, take a look at yourself and make that change.”
Thanks for reading,
Nike Irvin is the VP of Programs at California Community Foundation.