[Dana B (forum moderator)]

Understandably, many organizations are thinking about the current and anticipated economic realities and how these could influence nearly all revenue streams in many different ways. Can one business model be more “recession-proof” than another? Particularly in the face of lingering inflation and the fact that we are, or will likely soon be, in a recession, is there a business model, or a certain mix of revenue streams, that feels best suited in helping organizations manage economic uncertainty?

[Michael]

I think the answer is situational, based on the organization’s mission, service model, geography, etc. The inflation/recession factors cited in the question are short-term or, at best/worst, medium-term in nature. Hence, the response to them should be more tactical than strategic; i.e., “How do we adapt to today and the next 12 months while keeping our eyes on the long-term sustainability of our organization and its mission?”

Arguably, the only “wrong” move is to focus on only one business model and ignore the others. Each business model is subject to change by external factors, and each business model is changeable based on an organization’s internal factors.

[Dana B (forum moderator)]

Thanks for the insights, Michael. Regarding the changeability of business models, there was a lot of interest and questions around this during today’s webinar. For example, for an organization that’s looking to reduce dependency on government contracts and is seeking to increase individual and foundation contributions, what are some “case studies” and examples of organizations who have done this and how?

Would love to hear more from anyone who has experiences with pushing forward any big changes to your business model. What worked well? What challenges did you face (or continue to face)? What have you learned?

[Diane]

We are seeing significant government funding as a result of the Inflation Reduction Act, which is the current administration’s response to the troubled economy. My concern about this is that it could be presenting another stop gap similar to what may have happened with the pandemic funding. Not that I don’t support these initiatives, but organization’s need to understand to what extent these inflows are having on their need to address structural problems in their business model. I think that an organization needs to know its most promising funding model, and design sustainable plans around that model.

Donor income may fluctuate in a tough economy, especially if the organization relies on smaller individual donations.

[Dana B (forum moderator)]

Thanks so much for your perspectives, Diane. I think many of us have similar thoughts around both the benefits and risks tied to this type of funding.

I’d be curious to hear if others also are also experiencing a similar influx, in government or other types of funding, tied to our current (or anticipated) economic conditions. What are you and your teams doing to manage the risk and temporary nature of this type of funding?