Nonprofits that are funded by government agencies are frequently confronted by a challenge unique to their business model, which I’ll whimsically refer to as The Curious Case of the Customer Curveball. This “case” begins with our hero (you – the nonprofit) innocently walking along the path laid out by the mission. You’ve got your map, compass, weather gear – all the things that the nature of the work and the efforts of your forecasters suggest you’ll need for the road ahead. Then suddenly, WHAM, out of nowhere you receive a notice from your primary funder that you will be receiving a rate reduction… for all the services you currently provide… of 10%... effective TWO WEEKS from today!
As any seasoned “nonprofiteer” will tell you, this is not fiction. In fact, it happens all too frequently. Seismic shifts descend without warning and organizations – heck, entire systems – are thrown into chaos. It is difficult to understand why it happens with the seeming regularity that it does. The funding gatekeepers aren’t inherently bad, and as a group genuinely care about the people receiving services under their umbrellas. Something about the bureaucracy, though, breaks down. Whether it is efficiency in communication, disconnectedness from the higher levels of government regulation, a reticence to share “bad news,” or a belief in the possibility of changing the tide up until the absolute latest possible moment, the opportunity for organizations to prepare for change too often only comes after the shift has already occurred. In effect, there is no real preparation.
The Alliance for Strong Families and Communities, along with Baker Tilly, published a revealing and insightful analysis of future challenges for the nonprofit community - http://alliance1.org/disruptive-forces/executive-summary. This publication speaks to trends that all nonprofits need to be cognizant of, and invest in understanding and responding to. Simultaneously, nonprofits need to contend with the challenges right in front of them – not emerging, but imminent. The curveball heading toward the plate at 80 miles per hour. Being nimble is essential, and building infrastructure that minimizes expense while maximizing responsiveness will continue to be a key differentiator for best-in-class organizations.