The Foraker Group

Posted Under: COVID President's letter

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Are you open? When will you open? Will you open? These are the questions I am asking a lot right now – not just for ourselves but for our whole sector. If only there were simple answers. Each choice is fraught with complicated choices that weigh both human emotion and financial feasibility against a backdrop of public health and political will. I reject the notion that we are choosing between public health and our economy because the health of our population is the essence of our economy. Still, I am aware that we have choices to make about how we move our missions forward in this landscape. Our nonprofit sector in some cases is just like every other business in regard to these three questions. But the answers and our calculations are so much different.

The hard truth is that some of our nonprofits will never reopen. The combined loss of charitable giving, earned income, and volunteers is just too much. We might not see this on the scale of what other parts of the county are experiencing, but we know it will happen. Even six weeks ago, more than 15% of organizations we surveyed said they were at considerable risk of closing for good.

Many nonprofits live on the margin on a good day. After years of federal and state budget cuts, nonprofit reserves are slim or gone, and margins are barely there. This isn’t poor management. On the contrary, this is ingenuity and determination in a way many in our for-profit community could never imagine. We have been doing more with nothing as a matter of course – not because that was best but because it was and is our reality. It’s always been hard, and now it feels truly overwhelming on a scale few of us could have imagined.

We also know that not all nonprofits are experiencing this crisis in the same way. From a survey we conducted nearly six weeks ago – just as Alaskans were “hunkering down” – we learned that for nearly 80% of respondents the impact on their operations is high, and 69% reported that services to clients and communities have been disrupted. We can talk about impact on Alaska’s nonprofits in a few overly simplified ways:

• Organizations are experiencing increased demand to adapt quickly and expand service and delivery options while losing volunteers, money, and spending reserves.
• Organizations are closing in the name of public health, losing all revenue while still maintaining missions and facilities and covering expenses. Many of these groups will see another hit with the loss of tourism dollars this summer.
• We can see the impact by sub-sector. Human service nonprofits are facing significant increases in demand for services which we expect to last for some time. For example, domestic violence providers expect increases in the need for services, including orders of protection; food banks and food pantries are reporting a 50-80% increase in food requests; homeless shelters and related service providers are seeing spikes in the need for their services; and mental health nonprofits already report increases in patient numbers. At the same time museums, performing arts and zoos have gone virtual or silent while people across the world have sought art and artistic expression as their very outlet for relief from isolation and despair.
• We can also see the impacts from lost revenues caused by cancelling or postponing fundraising events or conferences, a decrease in volunteerism, loss of earned income, or loss of investments from a declining stock market – or a combination of these factors.

These results set a helpful context for our decisions about philanthropic and government relief but truly they don’t go deep enough to help us know the way forward. They don’t speak to the inequity we know was happening before COVID and is certainly on display in some of the worst ways now. For example, we know that much of the financial relief is focused only on basic human needs, which are defined as food and shelter. While this support is clearly needed, we worry that issues that impact the basic human spirit will be left behind including arts, culture, mental health, and community connections. Nonprofits play these essential roles, too, but the larger conversations about relief strategies seem to miss them.

Simultaneously we see inequity in very personal ways in our teams – from educational delivery to technology access to even the question about how each member is managing isolation and the impossible balancing act of work, home-school, and family care. And this does not begin to consider those on our teams who have been laid off, furloughed, or who are experiencing violence or the threat of violence in their homes. How we each experience this time is not the same. It was never the same. The choice to open or not has to consider all these complexities. Balancing how we contribute to our team’s financial and personal health must be part of our plans. This is what it means to lead as we answer the questions about our collective future.

At the same time, our decision to open has to consider the innovations and adaptations occurring at many of our organizations – those that are closed and those that remain open. There really is some remarkable thinking going on right now about the world we want to live in rather than the one we had before this crisis. For many this time has provided a space for creative disruption at a magnitude that is causing assumptions to fall and true innovation to emerge. We can test our assumptions about how we do the work, how we feel about and use technology, how we connect, how we see inequity, how we assess and understand time, productivity, and what the “work” really is. Breaking open our assumptions is an absolute ingredient to real innovation – the next steps are about testing those ideas. I have heard from more than a few who say that for these reasons rushing to open is not their choice because to open now, without knowing how to put into place the new thinking, is a recipe for getting stuck again in old habits.

So many variables. Add to this the rules our state and local governments provide, and it is no wonder many of us don’t know what to do. It is strange, at least for me, that we didn’t really question the construct of a workday – it was another day, just like the day before and the next day. It always had inequity in it. It always had complicated variables. But the very construct of the workday and the workplace we each signed onto was rarely the debate.

So how do you move forward?

So many of our choices have equal parts good and bad. Notwithstanding the public health guidelines, there is no right answer about opening or not. However, there is a set of questions to ask yourselves and your teams. Ultimately, who gets to make the choice to return is some combination of the CEO and the board (assuming you have both). But engaging your whole team and listening to their feedback is essential. Knowing the questions – in addition to the government’s reopening guidelines—can help you navigate forward. Consider each of these with your team. Likely some set of them will help you make the right decision for your mission now and into the future:

1. What would be different about your mission delivery if you opened right now under the current local and state government guidelines? This answer can help you know if it is better to keep operating in your current way or resume working from your office. For those of you who are open now in an alternative way, this question can help you know if you have time to wait longer to resume what used to look like typical activities. If you can wait – if nothing would be different except an open office – why not wait? For those of you who are closed, this question is really about whether opening under the current guidelines gets you something close to what is possible for mission delivery.
2. Can you afford to open given the current government requirements? Your desire to reopen may not actually make financial sense. You perform with a double bottom line – mission and money. Both must be considered in major decisions – especially this one. Your financial scenarios need to truly calculate the whole costs of resuming mission. Tell the hard truth. Calculate donations and earned income potential conservatively and even more so if you don’t have the people to carry out your mission.
3. Have you documented or codified your learning from this time in a way that will tell you and show you how to open differently? Maybe you learned your way of doing mission was siloed, and this time has brought a more collaborative response for the better. Maybe you learned that not everyone needs or even wants an office. Maybe you learned your staff meetings are better online. Maybe you learned you are helping people more directly because you are not in an office. Maybe you learned you don’t need paper. Maybe you are not even able yet to articulate what you are you learning. The lessons can be monumental, and they can be small. How will you take the necessary time to put your new insights into place before rushing back to open and resume your past assumptions? Don’t let all of these new ways of being get lost.
4. Is your team more emotionally and physically safe if you open now, later, slowly, or incrementally? Perhaps this is the hardest to answer because there is not a single answer. Still, even if you are not 100% or even 60% certain, asking the question is an essential part of knowing the speed at which you move back to a fully open position.
5. Is your “customer” emotionally ready for your mission to open? I know we rarely speak of customers as a descriptor for those we serve, those who give, those who engage, but let’s give them this name for our overall consideration. Given the government guidelines, you might be able to figure out how to open. But will people come into your space and engage in your mission? Will participants come or let you come to them? Will donors come? Will volunteers come? This question might also rank as the hardest because it isn’t about “if you can open,” and it isn’t about money, it is about people’s emotional sense of safety. For many it is hard to imagine being in a crowd right now – even with a mask and physical distancing. On the flip side, it is our job to ensure our team is safe when our customers are ready to engage without a face mask or from an uncomfortably close distance. Planning on the emotional well-being of others is essential before reopening. If this is you, consider what data you need and from whom. Consider what small experiments you can run to test your assumptions. Consider what deadlines you can set to make decisions that don’t further jeopardize money and mission delivery. Test it all. Lay it out. Have a backup plan. Take it slow. Reopening and then closing again because our COVID numbers spike in our rush to return will in the long run only hinder the public’s trust and our team’s trust to return to some version of normal. Consider your role in building trust, not breaking it.
6. Should you reopen? A lot has happened. Money lost. People lost. Assumptions broken. Our reality has forever shifted. Is this your opening – your moment to shift? Closing the institution of mission does not mean stopping mission. There are options. Shutting down officially with the IRS is indeed on the continuum of choices, but it is not the only one. There are certainly options to preserving mission even if the structures can’t last. To those of you who are closing your doors, please know that there are rules to the process that you need to follow. For the sake of your board members who are legally and financially responsible, we strongly encourage you to do this part well. Starting a mission is strategic and so is shutting it down. Both require effort. We have created a checklist for dissolving your nonprofit, but know we are ready to talk with you about this process. Also know we get it. It is hard to let go. In the beginning and in the end, it was and is always bigger than any one of us, and sometimes the very definition of mission stewardship is to let the structure shift and not reopen at all.

We have extremely hard decisions to make. This is an incredible time to lead that will test our core values and our belief in each other and our belief in our missions. These six questions should give you pause. They should require thinking from your head and your heart. They must be balanced with your financial bottom line and your safety top line. They must align to the science of public health and the guidelines our state and local leaders are providing to us. Opening is not a race, and this is a time to go slow to someday go fast. Please take the time you need to do it in a way that meets our community where they are with what they need in a way that is both financially and emotionally resilient. It is a lot. Trust me—I am sorting through these very questions right now, too. We can do this together.