The Foraker Group

Posted Under: President's letter

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“Coming together is a beginning. Keeping together is progress. Working together is success.“ – Henry Ford

We know now that several important items in the state budget survived a second veto by Governor Dunleavy. Still, some critical programs sustained significant cuts. Those include: Public Broadcasting ($2.7 million), Ocean Rangers ($3.4 million), Medicaid ($50 million), Adult Preventative Dental Medicaid ($27 million), Behavioral Health Treatment and Recovery Grants ($6.1 million), Adult Public Assistance ($7.5 million), Nome Youth Detention and Treatment Facility ($2 million), Village Public Safety Officer Program ($3 million), Alaska Marine Highway System ($5 million), rural airport maintenance ($47 thousand), and fund capitalization of the Community Assistance Program ($30 million). And even these numbers don’t tell the whole picture. For example, experts estimate that when considering the loss of matching funds and other contributing factors, the $50 million cut to Medicaid is really a $300 million loss. And we know more is coming our way.

While all of us strategize about how to continue our services and ensure that our communities still thrive, many are experiencing fear and exhaustion. We recently conducted a survey on how Alaska nonprofits are responding to the fiscal crisis. Not surprisingly we saw that many are making significant changes including lay-offs and program downsizing while others are considering merger and new ways of delivering service.  We noticed a few trends and we heard you need support. We’ve created a guide to help you decide what to do next. We hear you.  We are with you.

It’s important to note that part of the budget crisis nonprofits face right now is not new. For some time now, many organizations have been subsidizing the state by waiting for payment for services that were completed in one fiscal year and paid in the next. This delay is unconscionable at any time, but now it seems worse for a few reasons.

First, this marks yet another year of budget cuts that have left our organizations with no margin. It has also put additional pressure on budgets that were already operating in a deficit. We have been doing more with less for so long that doing anything with nothing is simply not possible this time around.

Second, a trend that makes some sense, but we didn’t anticipate, is that groups in the deepest crisis are those led by new staff. Let me be clear, it is not that these new leaders are not qualified to do their jobs – They are and you are. But when you enter an organization and are just learning to navigate a new board relationship and all the other critical relationships you experience, and you are still learning all the factors of running the business, and then you get slammed with a title wave of budget chaos – on a good day this is hard to manage. Multiply that by being new in your job, and the crisis just seems that much worse. Whew! So, let me say this again – clearly. This is not the normal you signed up for, and asking for help is a sign of strength. Know that we continue to stand beside you, and we need to hear from you.

We also need to stand with each other. In the midst of all of this tight rope walking, there are some slippery slopes we need to avoid. I am seeing it and hearing it already, so let’s just call it out so we can navigate our way past the temptations. These are not new ways of thinking, but under stress they amplify. Together they remind me of the idea that sometimes our greatest barrier to success and moving forward is ourselves. Here are four temptations already playing out across our sector:

1. The temptation to live in the silo of our institution. To be clear no organization will ever achieve mission on its own. Change happens when we work together. We have seen just this summer the power of a movement – Alaskans coming together outside of party and politics to say what mattered. The tendency to stay in our silo where it is safe – where we know and where we can have the perception of control—is not the right choice for those we serve. It is also a very lonely and stressful way to work. We need each other. We always have.
2. The temptation to believe it is about one’s self. In this world, and especially with the next generation of leaders, believing the workplace is a place for heroes rather than hosts will surely divide us. To be a host means many things – collective participation and decision making, shared leadership, engagement. It also acknowledges that there is power in the invitation, and we must use that power to invite more, not fewer, people to the table to chart our way forward. We must also let go of the power so that others can harness it and create more and more tables. It is time to be a host and a guest. It is time to welcome less heard voices and perspectives and step back so that others can step up and in. What will it mean to create this space in your board room, with your staff, with your stakeholders? Now is past time to find out.
3. The temptation of scarcity. You have likely heard it, too. It takes many forms – for example, “fighting for the same donor” or believing that we’re all going after a piece of a defined pie and “if you get more, then I get less.” I have been doing philanthropic work for almost 30 years and the people and groups that approach philanthropy with a model of scarcity lose in more ways than not just securing the gift. The mindset of scarcity places the emphasis outside of ourselves and in so doing we miss the opportunity to work on our own areas of improvement and acknowledge where our strengths can lead us. It is true that many outside our sector don’t fully understand how nonprofits generate revenue, both earned and philanthropic but this challenge is not new. Surely we can all acknowledge that there is work each of us can do to improve our donor relationships, improve our communication, and improve our earned income options. That work starts with ourselves – not with someone else.  When we let scarcity drive our need for competition and power we spend a lot of time and energy, but the return is less than zero. Change is happening in many ways including the departure of BP.  These changes will alter the funding landscape in ways we don’t fully understand and will likely add to the scarcity mindset. But allowing this lack of understanding to cause us to enter into a “zero-sum game” with each other only distracts from our true work of creating donor-centered philanthropic structures that engage individual Alaskans in meaningful, not transactional ways. Competition is a recipe to fail. This is the time to get clear on what is driving your economic engine and focus on ways to build from that strength.

As a side note for those primarily generating revenue from grants and contracts with government. Scarcity is at play here, too. This is the time to refine our relationship with the state as a contractual partner in serving Alaska. We are in this work together. They need us to do the work in ways that save both time and money – we need to do it in the ways we know best serves Alaska. None of this is fast, but all of it is necessary.

4. The temptation to stay in reaction mode. With so much coming at us each day, it can be hard to remember that you have a set of goals – that you have a plan. Now is the time to recommit to understanding the difference between urgency and crisis and from using all your energy to react and respond at the expense of having no energy to be strategic. Our bodies and our organizations can only live in a state of high stress for so long before we break. This is the time to make yourself and your team step back. Take a deep breath. Practice “we care.” Take out your plan or gather together and set a vision that can transcend the immediate crisis. We might not know how we are going to get there, but we will never get there if we don’t hold the vision.

The temptations are real: to silo, to focus on one’s self, to preserve our turf, to believe that we are working at odds, and to stay in crisis. But what I know for sure in this very uncertain time is that our missions are stronger when we work together. I also know that we can only move at the speed of trust to avoid many of these temptations – just calling them out will not be the whole solution. It will take us all – supporting each other – countering the effects of this prolonged stress with connection, creativity, and support. Through it all, we are with you today and into the unknown future.