Organizations are like people. They can be involved, focused, caring, and connected to those around them. They can make amazing contributions to their communities. They can engage others with their enthusiasm. They can also be stubborn, entrenched, and resistant to change.
Nonprofit organizations have a unique relationship to their communities. In exchange for a special tax status, a nonprofit organization agrees to serve the public good. Most nonprofits exceed this requirement by enormous degrees. They are outstanding contributors to their communities, and most of them are excellent examples of selfless leadership, creative vision and stable management.
But like people, nonprofit organizations can get into trouble. Financial concerns are at the top of the trouble list.
Nonprofits have unique financial constraints. They exist for reasons other than making a profit. However, money is still a requirement. Money pays the bills.
There are unexpected situations that can happen to any organization (the sudden withdrawal of a major donor, a programmatic or political change, a dramatic increase in rent, materials, etc.). These may cause a concern and probably a budgetary readjustment, but under healthy circumstances, these factors will not lead to a major crisis unless they are ignored.
The majority of the financial crises experienced by nonprofits are the result of a lack of connection with the community
Nonprofit organizations need the financial support of their community. That support is a two-way street. The nonprofit has to be involved and connected to the community in order to receive its financial support.
Most organizations slip slowly into a financial crisis rather than suddenly falling into a big hole. The needs of a community may change over time. Products and services that once seemed important may no longer be necessary. A nonprofit organization must pay attention, be open to change, and listen regularly to those they serve. Disconnection and withdrawal are as debilitating to an organization as they are to a person.
I remember playing in my first (and only) soccer game. It was a sunny fall afternoon and I was having fun until I realized that someone was about to kick a ball directly toward me as hard as she could. My instincts took over. I dropped to the ground and gathered my body into a tight fetal position.
That’s the same reaction that some nonprofits have when faced with a financial crisis. The behavior is protective and instinctive. But, as it did in my case, it could force you out of the game altogether.
The following are questions that may be helpful to nonprofit organizations in staying connected and in touch with their community. These discussions should involve not only board and staff, but also constituents, funders, patrons, and community leaders. Ask the questions and listen to the answers with an open mind.
Remember that if you only talk to yourself, your voice is the only voice you will hear.
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