Nonprofit Organization Adapting To The New Normal

In today’s episode of The Strategic Nonprofit we listen in on a conversation Tom Abbott our Managing Director had with Charlotte Kemp about how nonprofits can adapt during these turbulent times.

And while we’re speaking about adapting during these times, we’re running a series of free webinars to help nonprofits out during these times. We’re covering everything from ethics to evaluating the Board.

Join our Monitoring Organization Performance Webinar here.

Transcript

First question, can you give us a bit of insight into how we can balance difference between what paid staff do and what volunteer stuff do and how we manage the process?

That’s a great question and that’s precisely what a good governance model should answer. so with the complementary model of board governance, we see the roles and responsibilities. Staff being very different from the rules and rules, possibilities of the volunteer director. So in most smaller organizations and you’re quite right, and most smaller organizations, volunteer directors, they want to get involved.

They want to be part of the solution. So they volunteer to serve on the board. What ends up happening is a lot of those boards are what are known as working board. So by working boards, the president, the vice president, or chair, vice chair, however you call them, depending on the organization, they roll up their sleeves and they’re doing all the work.

The treasurer is actually preparing the financial statements and keeping track of the books. the secretary is the one who’s taking the minutes at meetings. So everybody is working. Very hard on the operations, the actual running of the night for profit organization, which is all well and good. If you’re a small society, There’s not a whole lot to do. And maybe not a whole lot of math members, but as that organization evolves and grows and the scope of work. Broadens, now it’s time to hire paid staff. you would usually start by hiring your first staff person, which might be an office manager and admin person either part time or full time, all the way up to a full fledged executive director or registrar or CEO or general manager, whatever you call them.

But, best practices in North America would be, either a CEO so that it’s consistent with. The corporate world, because what they do is exactly the same. So don’t get me started on that. That’s a whole other topic. but they’re either referred to rightly as CEO or most commonly executive director.

So then the board is responsible for establishing governance policies. And strategic planning and then you’ll leave the operational administrative policies to the executive director, otherwise known as the chief staff officer who handles that handles recruitment, hiring and firing, employee relations, right?

The board technically only has one of them employee, and that would be the ed CEO. So that’s where the division of duties comes in. There’s a lot of uncertainty going on right now. What do you think nonprofits can do to the situation? Yeah. So just real quick, it can be daunting for a volunteer to serve on a board when they’re suddenly introduced to a whole bunch of things that they weren’t familiar with before, or they might say this isn’t what I signed up for.

I wanted to volunteer. I didn’t know. I’d have to be wearing these. These different hats, but that’s why having board orientation is so critical. So you’ve got to have a great recruitment process and onboarding process, right? You’ve got to have the ed and or the chair sit down with that new director and go through an orientation.

Here’s the board manual, here’s the staff manual so that you can see, how do we do things at the board level? How do we do things within the NPO and the office? So there’s a proper orientation process that needs to happen and not enough boards actually do that. So that needs to happen. but as far as dealing with emergencies, like COVID for example, or any other crisis, I think, NPOs and I’ve seen some studies, I think by and large, most NPOs are handling it fairly well.

What does that look like? they have prudent reserves. They do have some money in the bank. They’re able to handle their operating expenses. for the next few months. So I think from a cashflow perspective, most organizations that I’ve spoken to are fine for lack of a better term.

They’re there. They’re fine. They’re not at risk of closing their doors. Due to funding because they probably got their funding through the government or some donors, or hopefully they had, an annual conference or fundraisers where they already have money in the bank. So solvency is, or liquidity is not a big issue for most of them.

The challenge for NPOs, I think. Is in the service delivery, it’s in the fulfillment, it’s in the serving their community. It’s the, Hey, we’re a food bank, but now, either donations are down or, with physical distancing measures, how do we do this? How do we actually staff the office? How do we actually, Julie?

are we in essential service or not? So I think operational issues are probably one of the biggest challenges that not for profits are facing right now. For some people, because of the way they work, they cannot do their work online and they have to rely on other income sources or change their business models in terms of strategy.

What can we learn from this of course, it, this current situation going virtual has impacted different organizations in different ways. So of course, you and I are both members of professional speaking associations. we would hope that we would be the early adopters, that we’re would be the first, members to be able to and organizations to transition to virtual only for delivery of services to members. So that makes sense. in our business in Canada, working with the not-for-profit community, We’re working with a lot of, family services societies, we’re working with a lot of, senior services society.

So those boards are comprised of individuals that are perhaps less tech savvy and the communities that they serve are not as tech savvy. So I think that’s where the challenges come for. Some of those organizations where the people that they serve their members or their stakeholders. are just less text savvy.

So the operations, the fulfillment, the delivery of their service is tougher for some of those associations, for sure. Do you have any words of encouragement for someone who is struggling right now and what they can do to succeed? Yeah, no one message that I’ve been sharing in both are, not for profit advisory consulting business, but also our sales training business is letting people know.

Stop trying to, survive the next five months. Stop trying to find little bandaid solutions of how do I do this? How do I do that? Just to get through the next five months. It’s not about surviving the short term period. It’s really about how do you succeed in growing your business or growing your, not for profit organization for the next five or 10 years?

I don’t really foresee the world going back to exactly the way it was before. I just don’t see that at all. I think organizations have been forced. Had been pulled, kicking and screaming into a more digital era. And now that they’ve been forced to do it, they are now starting to see a lot of the benefits of it.

And I think what’s going to happen is when things do open up more and people are able to travel, they’re still going to be, they’re now going to be making, a conscious decision. Do I really want to travel right now? Or do I need to go overseas to meet with this person? Do we really need to have a live in person event or could we achieve the same objectives virtually?

Now I’m not saying that virtual will completely replace live in person. at least not for the near future, who knows about the distant future, we always are going to have this need for physical connection and touch and to be there and want to hug people. I’m not saying it’s going to be replaced.

Absolutely. I know that my decisions to travel, I’m going to reconsider a lot of opportunities and go, what, why don’t we just do this virtually. because it’s just going to make sense in terms of time, travel money costs for events and hotels and, delegates and nevermind that the health protocols that we will still now have to have in place, even if we’re allowed to have the events.

So I tell people if you were going to start a business today, if you were going to form a not-for-profit organization today, How would you do it? What would be your mode of delivery? How would you be marketing? How would you be spreading the word? How would you be doing fundraising? How would you have events start thinking if you were doing it today?

Nevermind. How we used to do it. Oh, I can’t wait till we get back to the way we used to do it. Stop thinking like that. Think about what’s the future. What’s the way forward and start planning for that. Absolutely. And I think they can come together to support each other. This is, there’s an opportunity here for the right entrepreneurs, for the right business people for the right volunteer board members for the right EDS, running organizations.

The opportunity is one resilience. Like you say, Charlotte, I love that. And the other is adaptability. That’s going to be the number one resource that I think people are going to have to tap into. when people cite Charles Darwin, they often. talk about survival of the fittest. And it’s not quite that it’s the species.

These that survive are the ones who are most adaptable to their changing environment. that’s how evolution works. If you’re able to adapt to your changing environment, you will evolve, you will succeed. You will still be alive. Others will not. I think our ability to turn on a dime, I am, and to be flexible, adaptable, and to think about how do I roll with this and how do I actually.

Make this situation help us get better. those people are gonna win. when we talk about looking back and not be nostalgic, we’ve been doing webinars at our sales training company since 2010. So for a decade, I’ve been doing this. So when, and we’ve been trying to bring customers, kicking and screaming to this.

And we launched an eLearning platform, SoCo Academy for salespeople. We’ve got NPO Academy for not for profits. So you can just go on like NPO academy.com. If you want to learn how to govern your association better. we’ve launched these programs years ago online because we saw that was the future and you want to be ready.

A lot of people now we’re scrambling in 2020. I even wrote a book in 2015 called social selling. So I wrote the book, social selling how to prospect position and present using social media that was in 2015, fast forward five years. That’s all you can do now. That’s the only way that you can sell right now.

So I think, for people who are able to think about, yeah, how do I adapt and how do I roll with this? They’re going to win. Probably everyone listening to this podcast right now. in January we had our strategic planning meeting to chart our course, and we were like, Oh my gosh, 2020 is going to be an awesome year.

We are going to crush it this year. We had ambitious targets and a plan to reach those targets. And we felt confident who did their SWAT analysis? And came up with Corona virus in the threat part. Nobody. Okay. Nobody. So who picked global pandemic who picked global economic crisis as one of the threats?

In their SWOT analysis. I don’t think anybody did. So all of our plans have been derailed and we’ve had to adapt and to change our plan and change the execution, how we’re actually going to do that. And I think organizations that do that are going to come out of this in better shape possibly then going into that.

That’s very inspiring. There are lots of organizations struggling. One last thing that I just want to add if I can, because I know we’re talking about the future of associations. So I think this message that I want to leave, association executives and board members with is one word and its relevance.

So in order for not for profit organizations to exist in the future, if you think COVID-19 is a crisis, a lot of organizations have been struggling, with, member recruitment and retention for years. Okay. What ends up happening is you have global crises that then accelerate their demise. So when you see businesses, going out of business, they’re going bankrupt.

They’re laying people off. they have to close their doors. They need bailouts from governments. That to me is not because of it. That’s because of two months of lost revenue. What kind of operation are you running that you’re bankrupt after two months of, even zero revenue. Look, I’m not a multibillionaire, but I run two businesses.

I employ about 10 people in a number of different countries. We haven’t had to lay anybody off, reduce anybody’s hours or cut it. Anybody’s paid. Now we have had, yeah, I think February may have been a zero revenue month, but March was better. And then April was pre COVID may was even better than that.

And we’re on target now for June to have a really great June. But that’s our situation, but we were able to get through two months of, little to no revenue because we have, I had prudent reserves from months before we just know how to run a business responsibly. So we weren’t put in a very difficult cash situation, which I’m seeing a lot of people are in that position right now.

Without sounding too harsh on people, it’s getting your affairs in order and let’s not use. External economic, trigger events as an excuse for why we’re failing. You may have been failing before. Restaurants, for example, have such narrow margins, even at full capacity, they’re bare, struggling to get by.

So of course they’re hard hit by this, so maybe it’s a bad business model. Maybe they need to get better and reinvent themselves as all. I’m going to say. So as it relates to not-for-profit organizations, even pre COVID. Every single year, when that organization sends out their renewal notice to their members, you think you’re the only association that your members are a part of.

I’m a member of a number of different NPO. So when those invoices come, those renewal notes, , I’m going to ask myself, what have you done for me lately? What’s the value of me being a member. And do you get my hundreds of dollars just because do you know how many organizations are like, Hey, come on, man.

Just renew. just because you, no, not just because you tell me why I should renew it. My membership dues, what’s this organization going to do for me? So if it’s a charity, a registered charity, They’re likely going to do better because they’re going to get funding from government. They’re going to get people who are going to make Tara charitable contributions.

I think they’re going to be fine. If it’s a regulatory body as an association, they will also do fine because if you want to be an accountant, if you want to be a realtor or real estate broker, you need to get accreditation and you have to be registered with some of these bodies. So they’re going to be fine.

If yours is a voluntary membership organization, that’s, social, industry professional, but not regulated like speakers, associations like sport, They don’t have to join. So you really need to think about if you’re going to survive, what’s going to be that thread that brings everybody together, where they feel like they, that they need to be a member that you’re, that membership in your organization is indispensable and irreplaceable and more organizations finally need to start looking at non-dues revenue as their primary source of revenue.

To survive, because if they’re just looking at dues revenue as their primary source of income, they’re in big trouble. So they need to look at non-dues revenue.

About Tom (TJ) Abbott

Tom (TJ) Abbott, CSP is the Managing Director of AMC NPO Solutions and an authority on Governance. He has over 25 years experience as CEO, President and board director of several not-for-profit organizations. Tom has also spoken in over 20 countries.