Persistence, focus, creativity clear path through storm

M.j. Kaplan

04/26/2009

Rhode Island is facing an “especially grim economic meltdown,” as a March 1st article in The New York Times characterized it. In reaction to the economy’s freefall, I have observed a real divide in the attitudes of my own nonprofit clients.
Some are in shock and denial as to how they will survive. If they opt for business as usual, they will founder.
Others, however, seem to be energized by the volatility. If they embrace innovation, they will be in a strong position to weather the storm.
Arts and cultural organizations in Providence offer one example of the latter approach. Many of the city’s 400 arts organizations are precariously lacking overall revenue-generating and operational capacity, according to a report compiled for Creative Providence, an initiative to strengthen arts groups. Yet these are the very organizations Providence has banked on to anchor the creative economy, and with good reason.
According to Kathleen Pletcher, executive artistic director of FirstWorks, Creative Providence “brings arts organizations together to explore collaborations. The cross pollination cultivates new audiences and programs and enhances our communities.”
In fact, FirstWorks itself is a case study of a highly dynamic enterprise. In March, FirstWorks presented Yo-Yo Ma’s Silk Road Ensemble, a sold-out performance at the Providence Performing Art Center. For six months prior to the event, FirstWorks offered specialized curricula and access to internationally renowned artists to 500 urban youths. What is noteworthy is that this visionary and ambitious programming took place just as Rhode Island began to feel the full force of the recession.
Health care is another sector rife with debilitated nonprofits in search of new approaches. That sector’s response has been to consolidate. In fact, in the past 24 months, nearly every hospital in the state has considered consolidation. Landmark Medical Center sought to fast-track a merger in June to avert closure. Lifespan and Care New England announced their intention to merge in 2007, asserting that integration would position them to gain efficiencies, attract new funds and improve quality of care.
Other entities are experimenting with fundamentally new models. One such pilot program is the Business Innovation Factory’s Nursing Home of the Future, built around the idea that new approaches to eldercare are urgently needed. Another bold test of the status quo, the Chronic Care Sustainability Initiative, is bringing together physicians, patients and insurers to give patients with chronic illnesses a medical “home base.” These prototypes aim to elevate patient satisfaction and quality at the same time that they reduce costs.
No nonprofit sector is insulated from financial peril in this down cycle. These times demand comprehensive and creative reassessment. Nonprofits must reaffirm core mission priorities and sustainable practices through a rigorous review of their organizations. They must validate and invest in core programs and discard those that don’t add value. And they must scour for new processes to reduce costs. No aspect of the enterprise should be sacred.
Following are six strategies to help nonprofits survive and prepare to thrive:
• Don’t panic. The heroic actions of US Airways pilot Chesley “Sully” Sullenberger, who safely landed his plane in the Hudson River, remind us that sound preparation and calm are essential. Nonprofit leaders should face the brutal facts, stay true to organizational mission and ruthlessly manage costs.
• Revisit and validate enduring core values. Be very clear about what has to endure, likely a set of core values or principles. Then follow them like the North Star.
• Bolster your key people. In difficult financial times, employees often are overworked, or they suffer from fear that they might be laid off. You must attend to the needs of your valued employees and make them feel supported.
• Seek out key stakeholders and trusted partners. With their help, identify joint ventures and potential new income sources.
• Manage costs aggressively. Then plan thoughtful contingencies and be ready to act quickly.
• Explore innovations. Expand your reach or reduce costs, but remember to make the most difference to those you serve.
This recession is likely to be a marathon, and not every nonprofit will last the distance. For those nonprofit leaders with entrepreneurial vision, discipline to deliver and stamina, tough economic conditions can be an opportunity for productive change. •