Great Recession

Executive management in hard times - Retrenchment, reflection, transition, recovery

posted by
Herb Paine,

President
Paine Consulting Services

What’s a nonprofit executive to do when all the forces of nature, politics, and the economy conspire to thwart organizational (program and resource) development?

The answer lies in leveraging the crisis strategically for the opportunity that lies within the eye of the storm, in daring to lead beyond expectations and risking professional comfort.

Yes, a unique and seismic convergence of economic (the Great Recession and its aftermath), political (Congressional stalemate on the national budget and sequestration), social (demographic shifts and changes in attitudes and values regarding social responsibility), and technological (the democratization of social media and alternative forms of charitable expression) have taken a financial and programmatic toll on nonprofits. Today’s storm is unlike those of past economic downturns in both scale and duration.

In other words, times are rough for nonprofits, and every indication is that they are going to get even rougher and more challenging. These dramatic changes in the marketplace have broad implications for organizational governance and for the viability of the conventional nonprofit business model.

How a small nonprofit organization survived the Great Recession

posted by
Donnalee Sarda, LPC,
Executive Director
Defenders of Children

The year is 2008. Overnight, banks and financial institutions are in crisis, the stock market plunges, interest rates and housing prices drop, corporate sales and profits dip, employment lines grow, funds everywhere dry up. Nonprofits, the fifth largest industry in Arizona, historically the recipient of a most generous donor base, now wear the burden of the downturn in the national economy.

The number of nonprofit agencies that succumbed to the recession is not the topic of this essay. Suffice to say, that most survived, some due to good luck, others to large contributions that came their way in the early months. As the funding pot boiled down, nonprofit managers tightened our belts. Responsibilities fell to the board of directors and executive directors to do something to save their organizations.

Executive directors, along with their bookkeepers, heard the clock ticking and felt the impact first. Staff! How do we meet our biggest expense, payroll, with the next fiscal quarter looming? Clients! How do we serve our needy client base: vulnerable individuals, “our” families and “our kids?” At that point in time, keeping ourselves employed wasn’t even a thought.

With no time to spare and with no colleagues with whom to collaborate (we were all too busy), executive directors had to act. Now, holed up our offices, we had to reach into our inner strengths. Each had to look to our individual motivations, and come up with self-satisfying answers for doing what we do: How devoted are we to the work we do? Is this a job or a vocation?

If one’s work as an executive director of a nonprofit organization is a vocation, a “calling,” the answers to the following questions are likely to be YES!: