Top Ten tips for tough times
Surviving the 2020’s:
Top Ten Tips for Not-for-Profit Organisations in Today’s World
This decade continues to require leaders to navigate one of the most challenging landscapes our sector has faced in recent history, and many of the leaders we work with at LEAD are reporting feeling immense challenges in their roles. With cuts to local and central government funding, reduced philanthropic support, and rising costs, the landscape feels more difficult than ever. The competition for limited resources is fierce, while the demand for social services continues to grow amidst a cost-of-living crisis. This is being served up with a side dish of a return-on-investment (ROI) requirement for social service delivery funding, shifting the emphasis away from community wellbeing and empowerment.
So, how can organisations sustain themselves under such pressures? Unfortunately there is no magic formula. Without exception, however, across all literature and research and our own experience, organisations that embed a sector wide perspective and work collaboratively to create systemic change in a community centric way thrive through difficult times. A nice ideal but what does this look like in practice? Here are LEAD’s top 10 tips to surviving the decade:
1.Focus on your mission
In times like this, align all decision making around the overall change you are seeking to make rather than being organisation centric. Ironically our greatest chances for organisational survival lay in not focusing narrowly on our own organisational survival. Instead, using generative thinking and catalytic questions will expand your strategy and support you to make a difference in your community that is within your resources and abilities to change. As Stephen Covey advises, this also means focusing on your sphere of influence, rather than being overwhelmed by your expansive sphere of concern.
2.Collaborate, Don’t Compete
When we focus on our mission we can seek collaborations rather than competing for resources. It is a fundamental principle of system-change to seek collaborations with other organisations that share your goals or provide complementary services. In a climate where resources are shrinking, working in silos will only increase pressure on your organisation. By forming partnerships with other community groups, local businesses, and even government agencies, you can pool resources, share expertise, and increase your impact.
Evidence shows that collaborative efforts often make a stronger case to funders, who are increasingly looking to fund partnerships that deliver more integrated and holistic solutions to community problems. Funders also lean towards organisations who demonstrate the ability to share resources and reduce duplication. Practical examples of collaboration include:
Joint applications for funding, shared resource agreements, and even partnerships to deliver services
Pooling expertise to create stronger, more cohesive services
Collaborating on back-office functions such as infrastructure, administration or financial management to cut costs.
Partnering to deliver joint programmes to share the workload and create access to larger grants.
3. Lean Into Your Community
Studies show that organisations deeply embedded in their communities are more resilient and sustainable. Your community is not only your reason for being, but is your greatest resource. Build up your grassroots support by engaging volunteers, leveraging in-kind support, and involving community members in your decision-making. Not only does this foster loyalty and build social capital, but it also creates a strong case for continued funding. Numerous research suggests organisations with strong volunteer programmes see a 30% increase in operational capacity. Furthermore, volunteers often become advocates and donors, creating a community of support around your organisation.
4. Diversify Your Income Streams
Relying on one or two funding streams is no longer viable. If your organisation is overly dependent on government contracts or philanthropic grants, you are exposed to the risk of cuts or sudden funding changes. Where it doesn’t undermine your mission, expanding your revenue base to include fee-for-service offerings, membership models, social enterprise models, and even crowdfunding can create a more resilient organisation. We can often do more than we think is possible. In addition, it is more critical than ever to stay connected with funders, policymakers, and other decision-makers. Strong relationships with local councillors, MPs, and grant-makers can help your organisation stay top of mind, and potentially open doors to new funding opportunities or partnerships.
5. Advocate for a Values-Based Approach With Funders
Unless you are a well-resourced provider, it’s critical for your organisation to stand firm against the push for a mandated ‘return on investment’ approach. Shifting the narrative from short term transactional to transformative change is essential. How do you measure the financial value of a peer parenting support group? Or an after school programme? ROI measures ignore the broader social value your organisation creates, such as improving community wellbeing, increasing empowerment, and building long-term resilience. Advocacy can influence policy change – collectively making a compelling case for a values-based approach may be able to shift the conversation away from purely transactional and short-term measures of success.
6. Measure What Matters
Organisations that invest in basic but effective impact measurement are more likely to secure ongoing funding because they can articulate their value. Measuring impact is great for ensuring your approach is creating the difference it seeks to make and will provide a compelling argument for funders to support you. Focus on social impact, community wellbeing, and empowerment outcomes, and communicate these clearly to stakeholders and funders. Plus, having data on your impact can help you advocate for why return-on-investment approaches overlook the real value of community development. Here’s how to do it:
Develop Tailored Metrics: Work with your stakeholders to determine what success looks like and track those outcomes regularly. This could be as simple as qualitative data collection or using free or low-cost tools to survey stakeholders.
Use Cost-Effective Tools: There are a variety of low-cost or even free tools available to track your organisation’s impact. Use case studies, testimonials, and qualitative data to demonstrate the unique value your organisation brings to the community.
Build It In To Your Systems: Rather than one-off add-ons, you’ll get more value, and it requires less investment of your time to collect as you go as part of your ordinary programme delivery administrative systems (in-take, registrations, instant feedback, exit interviews etc.)
7. Invest in Capacity Building
When resources are tight, it may seem counterintuitive to invest in organisational capacity. However, strengthening internal capabilities, such as governance, financial management, and staff development, will improve your organisation's resilience and adaptability in the long term. Investing in leadership and skills training for your staff ensures your organisation remains agile in changing environments. Building a strong, skilled board will ensure strategic leadership and guide the organisation through these turbulent times.
While resources are limited, it’s crucial that your leadership and governance team develop stronger financial management skills. Upskilling in areas such as budgeting, cash-flow forecasting, and identifying cost-saving opportunities can be the difference between survival and closure. Even simple financial literacy improvements at the board level can make a huge difference in navigating through tough times.
8. Prioritise Staff Wellbeing
Well-supported staff are more productive, engaged, and committed to their work. Evidence shows that organisations that prioritise employee wellbeing have better retention rates and higher overall performance, especially in high-stress environments.
Ensuring that your staff feel supported and valued will help prevent burnout and turnover, which can destabilise your organisation. Seriously consider providing flexible work arrangements to support staff wellbeing, as well as providing access to mental health services or peer support networks.
9. Engage in Strategic Advocacy
Now more than ever, the not-for-profit sector needs to be united in lobbying for change. The current policy landscape has created additional pressures, and there is strength in numbers. The use of some simple, smart lobbying techniques can multiply your impact. By joining national advocacy efforts or starting local campaigns, you can raise the visibility of the issues your organisation and others are facing. Join national umbrella groups such as Hui E!, CNA and SSPA.
10. Make Funding Cut Redundancies Ethically
In the current climate of funding cuts, making staff redundant is an unfortunate reality for many. As leaders, this is one of the most difficult decisions you may ever have to make. Approaching redundancies in an ethical and transparent manner is not just a moral imperative; it’s essential for maintaining organisational health and integrity. The following are cornerstones of ethical approaches to making staff redundant:
1. Transparent communication from the outset about the financial challenges your organisation is facing and the reasons for the decision.
3. If funding allows, providing a redundancy package to support staff through the transition. Even if your organisation’s financial situation is tight, offering something to help ease the burden of unemployment—whether it’s extra paid time off, severance pay, or even help with transitioning into new roles—can make a significant difference.
4. Treating all staff with dignity and compassion. Being empathetic and respectful when discussing the situation with affected staff, preferably in face-to-face meetings to enable them to ask questions and express their feelings.
5. Maintaining professionalism and confidentiality to support their emotional wellbeing as well as the organisation’s culture and reputation. Maintaining confidentiality preserves trust within the team, even after difficult decisions are made.
6. Ensuring that your redundancy process complies with employment law and organisational policies. Using clear, objective, and fair criteria, especially given fairness is a pillar of ethical leadership in a sector that often speaks to social justice and equity.
7. Looking after remaining staff, addressing their concerns through open dialogue.
8. Making redundancies the last resort and exploring other potential cost-saving measures. This could include reducing hours, voluntary redundancy, or redeploying staff to other roles. Involving your team in brainstorming these alternatives can foster a sense of collective responsibility and provide unexpected solutions.
Most of all, remember you are not alone. There are many groups and individuals out there with resources and support that can help make the difference. At LEAD, for example, we can especially help on making values - and vision-based leadership real, practical income-generation strategies, practicing generative conversations & catalytic questioning, aligning for outcomes & measuring what matters, developing capacity building plans, and enhancing your smart lobbying skills. For non-profit chairs we offer a free lunchtime Forum to find support and share fresh ideas every second month.
The not-for-profit sector has always played a critical role in fostering social capital and supporting community wellbeing. Now more than ever, your work is essential. With the right strategies in place, you can continue to deliver vital services and contribute to the empowerment of your community. Stay resilient, and remember that you are not alone in this. By working together, our sector can continue to be a force for good in New Zealand’s communities, even in these challenging times.