3 ways to spot organizational vulnerabilities and build resilience

Federal funding cuts, increased demands on philanthropy, and changing public policy have transformed nonprofit leadership into an exercise in navigating uncertainty. Our team at Elevate NP of SWPA has heard from hundreds of nonprofit leaders in our region about the challenges they’re facing. Based on current trends, we recommend three low- to no-cost ways to help nonprofits identify risks and build resilient strategies.

1. Assess organizational and leadership capacity

Taking stock of your organization’s current capacity can reveal issues and opportunities while surfacing possible strategic options. To start, consider how your organization manages change:

• Does your leadership team have the ability to both operate and adapt at the same time?
• Major changes put a lot of stress on leaders; do your leaders have the right support systems around them?
• Is your board prepared to make critical decisions and support your leadership?
• Do you have systems to analyze your financial position and develop projections?
• Are you able to communicate changes in your approach with all key audiences?

Many online organizational assessment tools offer free or low-cost ways to self-assess your broad organizational health or zero in on specific topics. The biggest investment is time: for leaders to complete the assessment and for collaborative review and discussion of the results. The William and Flora Hewlett Foundation’s Guide to Organizational Capacity Assessment Tools is a reliable resource for getting started.

2. Identify risks and opportunities with a scenario planning exercise

Beyond just funding uncertainty, we also hear organizations are worried about how to meet evolving community needs, public policy shifts, and turnover in leadership or other key positions. Scenario planning lets nonprofits zoom out for a wide view of all influences and threats that can affect their organization, zoom in to see where those threats could have a detrimental impact, identify steps to address or mitigate those weaknesses, and create action plans that can be easily implemented if needed, so the organization is always prepared to adapt.

While large and complex organizations may benefit from a scenario planning consultant or facilitator, this process does not have to be expensive, time-intensive, or externalized. Even a half-day work session with key staff and board leaders can yield a deeper understanding of your strategic options and identify paths forward. That plan can be revisited and revised as circumstances change or new information becomes available.

A crucial ingredient to scenario planning is having a defined process. Most successful approaches include:

1. Understanding the key drivers of risk or uncertainty
2. Developing scenarios for how those risks would impact your organization
3. Creating a portfolio of potential action steps
4. Determining the key trigger points for those actions

Several free toolkits exist online, but we find The Bridgespan Group’s toolkit to be an accessible yet thorough starting point.

3. Talk to peers

Risks are often shared by peer organizations with similar business models or funding sources. Public funding changes can pose a risk not just to individual organizations but to their entire sectors. Policy shifts, particularly in human services, can change the rules for how systems operate. And as philanthropy responds to shifting pressures, funders’ changing priorities can have ripple effects across their communities.

Being an executive leader in difficult times can feel lonely and stressful, but peer conversations can help leaders manage the pressure of the situation. Sharing information and concerns can enable mutual learning, co-strategizing, risk monitoring, and peer support. These conversations also provide an opportunity for finding collaborative solutions.

In our work, we are seeing growing interest in a variety of collaborative models that build organizational capacity despite uncertainty, including shared programming, shared administrative services, and even mergers. Some solutions have taken creative forms, such as pooled funding collaboratives among immigrant- and refugee-serving providers and small arts organizations. These developments resulted from organizational leaders talking to one another about vulnerabilities they realized they shared. But being vulnerable among peers takes trust and time, so start building those relationships now.

Why it’s worth thinking ahead

While these three steps can all be taken at no financial cost, they do require time that’s often in short supply, especially for leaders of small organizations. However, not investing time in thinking ahead actually creates more risk by pushing leaders toward reactive emergencies instead of proactive preparation. At a time when traditional strategic planning can feel insufficient to meet the rapidly changing needs of this moment, these three actions can provide a more accessible and relevant framework to make smart choices and build resilient organizations.

Photo credit: Steve Groves