What to Watch and Do as Your Nonprofit Enters a Chaotic 2025:
A Convening of Financial Leaders
Video:
Accompanying Slides: Download here.
Transcript: Coming soon!
On Nonprofit Organizational “Resilience”
Before we provide a few resources on resilience, we want to introduce you to an alternate point of view that has allowed us to approach the topic with a “yes, but…” having to do with justice, equity and expectations for a reasonable operating environment. Here is a piece by Vu Le on the topic that can point you to other considerations for action. That said, we still believe the frameworks that follow are useful.
“Why Funders Need to Rethink the Concept of Nonprofit Resilience”
Insights
Managing for Resilience
Resilience and the Management of Nonprofit Organizations: A New Paradigm
We do not generally pass along resources that cost a lot, but this book on managing for resilience may be worth the purchase. Resilience and the Management of Nonprofit Organizations: A New Paradigm, published in 2022, was authored by Elizabeth Searing (who presented at our recent webinar) and Dennis Young. The description reads:
This timely book examines how nonprofits can prepare for and respond to serious threats, such as pandemics, economic recessions, terrorist attacks, and other potentially catastrophic events.
The authors intend to publish a sequel soon, containing a collection of case studies.
Slack and Agility
Searing and Young focus on the two central concepts of slack and agility. The idea of slack is incredibly important in times of uncertainty and crisis and goes beyond mere reserves or endowments. The following two articles explore nonprofit slack further:
Organizational Slack (or Goldilocks and the Three Budgets)
Here’s an excerpt from this classic by Woods Bowman wherein he describes how a lack of slack leads to limitations even in stable times:
A cold organization is frail, unable to adapt to changing needs of its constituents, unable to invest in training and new technology, and unable to take advantage of opportunities. It is stale though not yet failing. It has ideas but does not have sufficient capacity to implement them.
At the most basic level financial capacity reduces risk. It cushions an organization from economic shocks. It permits a nonprofit to maintain service levels in the face of temporary reductions in income.
Many nonprofits are tyrannized by inflexible business models. Cold nonprofits easily become locked into program models not fully appropriate to their communities—but favored by their funders. In other words, financial capacity gives nonprofits the flexibility to navigate around restricted funds and to avoid mission distortions that can result from overdependence on grants.
Organizational Slack in Nonprofits
This second piece on slack is longer, more academic, and includes as authors three of our presenters on this webinar.
Donors Up, Dollars Down
Everyday Actions, Extraordinary Potential: The Power of Giving and Volunteering
This 2024 report from the Generosity Commission examines the demonstrated decline in donors (but not dollars) in recent years:
With rare exception, year over year more money has been given to nonprofits but by fewer givers. And year over year, more hours have been donated to nonprofits but by fewer volunteers. In short, the numbers of dollars and hours have gone up, but the number of donors has gone down.There are several hypotheses to explain the steep fall in these forms of civic participation. Middle-class precarity is prominent among them. But whereas economics have played a large, even decisive role, social scientists note that profound social factors have also been at play, suggesting a more complicated picture. Trends in everyday giving and volunteering have occurred alongside two others: a rise in social isolation and a decline in social trust.
Uncertain times invariably remind nonprofit leaders of the treasures contained in their social capital, or the network of relationships that can be brought into common cause when an organization needs extra hands, influence, or visibility. The principle here is, “If they build it, they will come.” Marginalized constituencies that aren’t really engaged by the nonprofits that hold their interest are less likely to stick around and give.
So, if you are worried about the “dollars up, donors down” phenomenon, or your loss of (or lack of, or inability to acquire) donors who are not super rich, you would be wise to engage those who care about what your nonprofit cares about with efforts where they can make a difference. The link between giving and volunteering or engagement has been proven over and over, and here we are in 2024 noting it again when your nonprofit really needs to hear it.
This is the perfect time to recommit to your base, since you will need them for other stuff—political influence, extra hands, and two-way lines of intelligence into every corner of your community or field, to name just a few treasures to explore.
If you want to see how organizations make use of social capital during such times, you can watch NFC’s recent webinar on this topic here.
