Five Steps to Reimagine Your Organization’s Future Through Scenario Planning

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While the COVID-19 crisis has brought tremendous challenges, it is also bringing out the best in many nonprofit leaders as they work to sustain their missions and create more equitable communities. Many leaders are pivoting their organizations’ services; tending to the professional, emotional, and safety needs of staff and volunteers; forging new partnerships; and testing creative ideas to address inequities.

This type of proactivity is no small feat amid significant disruptions to services, operations, and funding that can leave leaders feeling uncertain about what to prioritize and how to adapt. It can be easy to deprioritize planning completely or default to contingency planning and risk management. In times of crisis, many leaders understandably take a singular focus on preserving the organization’s operations and planning for contingencies. Of course financial health is crucial for continuing services, and our research and experience show organizations also need to take a broader view. Before doubling down on financial health and organizational preservation, nonprofits should focus on the impact they want to have and imagine possible new futures. One way leaders can do this is through scenario planning.

Scenario planning can help your organization manage uncertainty, envision new opportunities, and spot unexpected threats. It helps you focus on the things you can control – even amid great change and uncertainty – so that you are better positioned to achieve your desired impact. It improves your organization’s sustainability by helping you financially prepare for the worst and take data-informed actions sooner than you otherwise might have.

Scenario planning can happen in five steps:

Adapted from Diana Scearce, Katherine Fulton, and the Global Business Network community’s “What If? The Art of Scenario Thinking for Nonprofits.”

1. Define key questions.

What questions do you hope this plan will answer? Are you looking to determine how best to hold steady during turbulent times, or do you want to reimagine your programs and services for a new future?

What is your time horizon for planning? Organizations facing great upheaval and uncertainty may decide to look out only six to 12 months while other organizations may be able to take a longer view. Either approach is fine.

Even if your primary focus is on stabilizing the organization and looking at the near term, scenario planning presents an opportunity to think about steps you can take now that will position you for long-term impact.

2. Explore drivers.

The trajectory of the virus will have many ripple effects, such as closures of schools and other places due to social distancing and economic impacts that affect state budgets, employment, and donor/funder behavior. In most communities, the COVID-19 crisis is widening the racial inequities many nonprofits are working to address. Focus on the two to three driving forces that most affect your organization’s future and are the most uncertain.

3. Build scenarios.

Once you have prioritized the drivers that matter most to your organization, develop a set of plausible and thought-provoking scenarios that represent a range of future outcomes. Here is an example of what scenarios might look like for a nonprofit that identified school closures and state budgets as key drivers.

4. Develop plans based on assets and opportunities.

Envision what each scenario would mean for your organization and what you would do in response. Play out how each scenario might impact the community you serve, your programs, funding, staff, and operations. Pay attention to how each scenario and your response might widen or decrease inequities. For example, data show that communities of color are disproportionately feeling the health and economic impacts of COVID-19. What is your organization doing to address disparities, and how can you ensure your response does not inadvertently contribute to existing inequities?

As you develop your plans, consider where you might have the greatest opportunity for impact. If you are getting stuck trying to imagine a different way of creating impact, take a step back and consider your organization’s core purpose. What are the three things you must hold on to? Maybe those things are your values, the population you serve, or the way you show up in the community. What three things might you change or let go of to stay focused on what matters most? Maybe you are open to changing your funding model, ending a longstanding program, or having staff build new skills. This helps you identify where the greatest opportunities lie in each scenario, what tradeoffs you may need to consider, and the steps you need to take to prepare for the future.

5. Monitor indicators.

To be able to act on your plans, you will need to have a sense of which scenario is playing out. Identify two or three metrics that indicate the organization is transitioning into each scenario, so you can make timely choices about how to respond. Many organizations set financial indicators, such as progress against fundraising goals, to guide operational decisions. Consider what outcome indicators might guide programmatic decisions as well. For example, if you see a widening of racial disparities in your community as the virus spreads, you may decide to double down on your efforts to address those disparities, and that may require you to let go of other activities that don’t support efforts to decrease disparities.

Imagining a New Future

During disruption and uncertainty, scenario planning helps organizations focus on the things they can control. It can clarify what’s most important to your organization and what to pay attention to. Imagining what you would do in your most severe scenario will push you to think creatively and identify actions you could take to help ensure long-term sustainability and improved community outcomes.

While scenario planning can help stabilize organizations during times of crisis, it can also help you imagine a new future. As you embark on scenario planning with your organization, bring an asset-based mindset to consider not just future risks but also the strengths within your organization and community. Build on these assets to find the new opportunities and possibilities for the future, even in times of uncertainty.

Podcast: The Impact of COVID-19 on the Sector

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In a recent episode of the Business of Giving podcast, Amy Celep (CEO of Community Wealth Partners) talks with host Denver Frederick about what we’re hearing from the organizations we work with. The conversation explores many things including:

  • How the COVID-19 crisis is exposing deep inequities but also accelerating action to address those inequities.
  • The ways leaders are leading effectively in a virtual world and taking care of staff and themselves. If you want to do best by your mission, clients, and staff, Amy says, you have to pay attention to what you need. And as Maurice Jones, CEO of LISC, told Amy, “We’ve had to up our game in matters of the heart, and give people permission, through our words and deeds, to display their pain.”
  • How scenario planning can help organizations prepare amid uncertainty. Around Minute 8, Amy shares a five-step process for scenario planning.
  • How funders can address power dynamics to better support nonprofits. Funders can proactively encourage grantees to be bold in their asks. They can also continue practices of trust-based philanthropy long after this has passed.
  • How nonprofits can better understand the reliability of their revenue streams. Nonprofits can ask bold questions of donors and funders like, “What are your intentions for our grant/donation? What do you anticipate continuing to do and fund? What might you consider stopping or pausing?”

You can listen to the full interview here on the Business of Giving website or below.

 

What Does Virtual Leadership During COVID-19 Look Like?

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It’s hard enough to lead an organization through a period of difficulty and uncertainty. It’s even harder to lead through the extreme societal and organizational disruption we are experiencing in the wake of a pandemic and to do so virtually with team members juggling work with watching children, caring for sick loved ones, navigating difficult home situations, and managing a roller coaster of emotions.

In response, many leaders are asking, what does virtual leadership look like?

While virtual leadership like this is new for all of us, there are leadership principles that are particularly relevant right now. Just as before, leaders can offer:

  • Inspiration and realism: Give hope to your team while being realistic about the future and its uncertainty and challenges. Getting this balance right is key to helping your team have faith in leadership, their own work, and the path forward.
  • Action: Help your team get unstuck by focusing on immediate steps they can take to make a difference and adapt, especially if they seem paralyzed by the changes. Show them you are in it together.
  • Love: Support your team, assume best intentions, and create space for team members to be multidimensional, imperfect humans who can try new things and learn in the process.

This time also calls upon us to be creative with how we lead. Here’s what strong virtual leadership can look like this moment.

  • Assume the best and give grace. Let’s face it: work and home have just collided like never before, and you may not know what challenges people are facing or what they need. This is a moment to assume the best of intentions, be flexible where you can, and listen to your team. Ask questions to understand what’s going on. Pay attention to the circumstances people may be facing in their homes and personal lives – particularly team members with disabilities, with dependents, with sick loved ones, and who are part of communities that are on the front lines of this pandemic or that are receiving the least support right now. (The Management Center put together this survey to help you understand staff needs.)
  • Be present from afar. As always, your presence matters. As you lead from afar, you can get creative with how to be present virtually. For example, consider temporarily creating daily 15-minute check-ins with teams to stay connected and provide support. During meetings, turn on your video so people can engage with your facial expressions and body language. As you communicate with your team, consider that many people have a greater need right now to feel connected and informed; but also, if their inboxes look like mine, they’re receiving a huge influx of emails. Be generous but intentional in your full-team communications. Consider using email to communicate organizational things and using a chat platform (like Slack or Zoom) to manage smaller, daily, project-level communications.
  • Walk the virtual halls. Connecting one-on-one with individuals can help maintain or strengthen relationships. You can’t physically walk the halls of the office to connect informally with people, but there are virtual ways to do this. You can set up virtual coffees or meet-ups with people you don’t typically see in meetings, particularly people with less access to power in your organization. It’s also important to support your team’s virtual social gatherings to help foster a sense of community. Encourage and support virtual social events like lunches, snack breaks, or mindfulness gatherings. As we distance ourselves physically, we need more social connection.
  • Live your culture virtually. Now more than ever culture matters and will be tested. Culture challenges are often exacerbated amid all the pressures staff are facing, which can lead to less effective work in a time when it’s greatly needed. At the same time, this moment may offer an opportunity for breakthroughs because it may force your team to break down silos and change ineffective ways of working as you try new things. Model the values and behaviors that make your organization effective, and continue to hold teams accountable for doing so too. Most importantly – this is a time to prioritize the conversations that help you uphold your culture. It can be easier to avoid difficult conversations when you are virtual. Instead, insist that your team engage, listen, and have the conversations that matter most. You might hold time with your team to talk about what it looks like to live your values right now. How might you manage power dynamics over your virtual meeting platform? How might you collaborate in real time with each other when people are dealing with slow internet? How can you ensure everyone feels they can fully participate in team meetings when the technology isn’t intuitive to some team members?

We’ve learned some of these lessons over the years, and some have emerged in the last two weeks. This moment and the months that follow will teach us a great deal about how to lead. What are you learning about virtual leadership? What’s working, and what isn’t? We hope to keep learning, making mistakes, and finding humor alongside you.

Finding Greater Financial Stability and Impact Through Earned Revenue

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Greater financial stability is on a lot of minds right now – even more than usual, as the world shifts in response to COVID-19 and as economists predict a recession as early as this year. Yet many nonprofits may not be ready for a recession. According to a November 2019 Center for Effective Philanthropy survey, nearly two-thirds of nonprofit CEO respondents said a recession would increase need or demand for their programs and services. Yet only one-third of respondents said their organization had a plan for how it would handle a recession.

Earned revenue is one strategy that can give organizations more financial stability and help strengthen an organization’s impact. Of course, it’s not for every organization, and it’s not a quick fix. It can take years to implement. Though nonprofits must focus on immediate needs now, there’s also an opportunity to think differently about how to sustain the work long-term.

We developed a field guide for nonprofits considering earned-revenue opportunities and funders looking to support grantees in doing so. The field guide includes a set of four case studies about how nonprofits have developed and implemented earned-revenue strategies. We hope this field guide will help you:

  • Ask the right questions to understand if an earned-revenue strategy is the right approach for your organization right now,
  • Get a glimpse into the process of developing an earned-revenue strategy that helps your organization achieve greater impact, and
  • Learn from other nonprofits that have gone through this process in different contexts.

https://www.youtube.com/watch?v=1XnS3UgF1TU

Download Earned Revenue Strategies: A Field Guide

 

Self-Care During Challenging Times

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As we all grapple with the upheaval and uncertainty produced by COVID-19 and its impact on communities and the economy, one thing is certain: Communities will call on nonprofits – especially those working in human services – to meet rapidly growing needs as schools and businesses remain closed, unemployment rises, and healthcare needs increase. As nonprofit leaders are faced with increased demand for services and massive disruptions to funding and operations, they must grapple with the urgent dilemma of balancing short-term and long-term priorities.

Leaders across the sector have the entrepreneurial spirit and skill that it takes to respond to the short term and ensure that their organizations are well-positioned for the long haul. However, nonprofits are facing potential challenges such as disruptions that impact service delivery, periods of negative cash flow, and burned-out and overwhelmed staff. These pressures can leave many leaders feeling that their organizations’ very existence is threatened, and managing these challenges can feel scary, isolating, and exhausting.

To lead effectively during a crisis, Bill Shore, founder and executive chairman of Share Our Strength and chair of Community Wealth Partners, advises “putting your own oxygen mask on before trying to assist others.” Although by now we’ve likely all heard the value of self-care to promote mental health and avoid burnout, for nonprofit leaders who place great value in serving others, self-care often takes a back seat – especially in times of crisis. It can feel almost impossible to lead others when at the same time you’re trying to figure out how to tend the health and safety of yourself and your loved ones.

Now more than ever we need strong leaders at the helm of nonprofits to guide teams through the challenges they confront. Leaders cannot provide strong leadership if they are not feeling strong and healthy themselves.

Self-Care for Nonprofit Leaders

Self-care will look different for different individuals, and there are a variety of resources that offer recommendations for nonprofit leaders. (For example, here are some questions to ask yourself, tips for nonprofit professionals, and 21 self-care resources.) From the conversations we’ve had with leaders over the past couple weeks, there are a few key practices I’d recommend.

  • Accept that this is not business as usual. We don’t know what our world will look like three months or three years from now, but we do know that we are likely to come out on the other side of this changed in some way. Some leaders we’ve spoken with have felt pressure to push forward plans they set weeks, months, or years ago without pausing to reassess whether to continue the work. Acknowledge that times are different and ask yourself, does this still feel like the right thing to do right now? Accept that the answer may be no.
  • Give grace to yourself and others. None of us has lived through something like this before. We may make bad decisions. We may be unable to follow through on commitments. We may let people down. Leaders who model patience and grace with themselves and others will be the ones who are able to rally their teams and pull through.
  • Lean on others for connection and support. Remember that you are not alone. While we may not be able to come together physically for connection and support, there are a variety of tools available to facilitate virtual connection. Lean on your colleagues and networks for support, solidarity, and help navigating thorny challenges.

Self-Care for Nonprofit Organizations

Just as personal self-care will look different for different individuals, organizational self-care could take many forms. As you prioritize the well-being of your organization, here are four places you can start:

  • Prioritize your people. Does your staff have what they need to take care of themselves and their loved ones and continue to work as best they can? What adjustments can you make to help them cope with change and uncertainty, so that they have what they need to help your beneficiaries?
  • Bolster and adapt your processes and systems. The chaos of the past few weeks has shown limitations and flaws in the systems, policies, and processes in governments, businesses, and nonprofits around the globe. For example, at a systems level, the current crisis has shown the limitations of U.S. policies on healthcare and nutrition. For some nonprofits, transitioning staff to telework may have surfaced gaps in the organization’s IT systems or inequities in personnel policies. In the short term, you may need to adapt your policies and processes in order to continue to deliver your services; this has been especially true for organizations that distribute food to children, senior citizens, and other food-insecure populations. Balance short-term adjustments needed to address current challenges with long-term considerations of the policies, processes, and systems that may be required for new ways of working in the months ahead.
  • Invest in yourself. Some funders are releasing restrictions on funding to give nonprofits the flexibility they need to respond to rapidly changing circumstances, and some organizations may receive unexpected gifts in recognition of the critical services they provide. Don’t hesitate to invest some of these resources in your own organization. Consider what your organization needs to stay strong for the long haul. If you have the resources to invest in what you need, use them.
  • Stay focused on your true purpose. During a time of crisis, a nonprofit’s first instinct may be to do whatever is needed to be of service. It can feel difficult to say no. But stretching your organization too thin can drain resources from core services and hamper the organization’s overall impact. While many organizations will likely need to evolve and adapt to changing circumstances, you can help ensure long-term sustainability by keeping an eye on the organization’s true purpose and not being afraid to say no at times.

We don’t know what lies ahead, but we know the coming weeks and months will be tough. Through this difficult period, Community Wealth Partners remains committed to supporting the nonprofits and foundations who are doing critical work in our communities. We want to help you address the challenges keeping you up at night by offering resources, connections, and support.

You can let us know how we can best help you by commenting below or reaching me directly at acelep@communitywealth.com. In the weeks ahead, we will develop resources and offerings to support leaders with the challenges that we keep hearing are top-of-mind right now.

Podcast: Making Change through Coalitions

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Coalitions have to grapple with complex issues. They need strategies bold enough to inspire people to get involved but believable enough that people think it can happen. They need to address mistrust among members and with communities. They need to undo some structures they’ve built and find new ways of working.

In this two-part series, Community Wealth Partners’ president Sara Brenner talks with Vitalyst Health Foundation’s Spark podcast. about findings from research on what contributes to transformational change. In Part One, she shares the four stages of the social transformation lifecycle, as well as a story about a coalition. In Part Two, she walks through ten key elements that can help coalitions drive change that lasts.

 

“If we take step back and think about how we feel in the work, we realize we’re coming up against resistance all the time. Where are those points where we’re stuck, and why are we stuck? When people talk about being stuck, it’s usually because of the dynamics they have with other partners or people within their own organizations. ‘We’re unable to move on an issue because we haven’t worked through a difference in perspective or some kind of competition or a challenge or distrust or our own ambitions are at the forefront rather than the ambition of the cause.’ What we suggest coalitions or organizations do is spend some time building their culture intentionally.” —Sara Brenner

 


Creating a Change-Making Culture: A Field Guide

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Leadership expert Peter Drucker famously said, “Culture eats strategy for breakfast.” While many in philanthropy have heard this quote and quite a few may agree that a strong culture is critical for foundations to achieve their goals, data suggest that culture may indeed be a barrier to success for many foundations.

A 2017 survey of grantmaking organizations by Grantmakers for Effective Organizations found that 48 percent of grantmakers did not think their culture was where it needed to be to maximize effectiveness. That means almost half of these organizations don’t have the culture they need to be successful. What can you do about it? Invest your time and money in getting the culture you want.

Many foundations invest significant time and resources in developing strategies that chart a course for greater impact without including attention to culture in the process. As the data above indicate, attention to culture is critical for ensuring an organization is well positioned to meet its goals and has the right team in place.

We created a field guide to help you form the culture you want for your organization. In this field guide, we offer a method and process for creating this change-making culture, with questions to discuss with your staff and board and practical recommendations throughout.

Grounded in our partnership with Helios Education Foundation, this field guide shows how we have seen organizations achieve significant results—including the ones listed below—through an intentional culture change process.

Culture Results

  1. Clearly defined and agreed-upon values that resonate for all staff
  2. Behaviors that reinforce your values and guide how everyone will act with each other and with external partners
  3. Structure, policy, and process changes that support values and behaviors
  4. Action plans clarifying who will lead changes and by when they will occur
  5. Aligned senior leadership teams with clear and consistent management practices, agreed-upon decision-making protocols, and increased trust
  6. Distributed leadership across the organization to lead culture changes “from their seats,”including the potential to establish cross-functional, staff-led culture working groups that ensure changes move forward (see our forthcoming blog post for more on culture working groups)

November Must-Reads

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This month, we were reminded of how hard it is to make changes within an organization, and we also got advice on a specific type of change: making boards more diverse. We heard concrete tips on how to gather feedback from those we seek to serve. And we were reminded of good foundation practices from funding capacity building to assessing performance.

What caught your attention this month?


1. How to Fund Capacity Building Well

CAPACITY BUILDING | India Development Review | 5-minute read

Funding isn’t always enough; nonprofits also need the right kind of capacity-building support at the right times. This blog post shares insights on when it’s most crucial to fund capacity building for grassroots organizations, how to understand the areas in which nonprofits most need support, how to measure the impact of capacity-building funding, and how capacity building is a lot like running a restaurant.

Did you see our new GrantCraft case studies on capacity building?

2. Tools and Lessons to Make Listening to Clients Feasible

LEARNING & EVALUATION | Stanford Social Innovation Review | 19-minute audio slideshow

Gathering feedback from clients and those you seek to serve can lead to invaluable insight. This audio slideshow shares a five-step process (developed by the Listen for Good initiative of Fund for Shared Insight) to truly listen to clients, collect data, interpret it, and respond to it.

3. Why Are We Still Struggling with Diversity, Equity, and Inclusion in Nonprofit Governance?

EQUITY | Nonprofit Quarterly | 18-minute read

Many nonprofits recognize that nonprofit board diversity matters, so why has it remained stagnant overall? The writer shares insights from a panel discussion at the Association for Research on Nonprofit Organizations and Voluntary Action conference, providing several actionable frameworks and highlighting the panelists’ thoughts on:

  • how to reach beyond your social circles to identify board candidates of color
  • how to create mechanisms to hold yourself accountable
  • how to avoid tokenism and redistribute power

4. Streamlining Is Change, and Change Isn’t Easy

CHANGE MANAGEMENT | Peak Grantmaking | 5-minute read

“Change efforts meet confusion and resistance, even when the change is sensible and desired,” writes Dr. Streamline, also known as Jessica Bearman, for Peak Grantmaking. Bearman walks through the Change Curve, a framework that shows the predictable reactions people have to change over time, and several factors that may speed up or slow down the process. Though Bearman talks about making changes to grantmaking practices, the change management process she describes shows up in all types of organizations and situations.

5. Understanding & Sharing What Works: The State of Foundation Practice

LEARNING & EVALUATION | Center for Effective Philanthropy | 24-minute read

It can be hard to assess how well a foundation is performing. This new Center for Effective Philanthropy report shares how well private and community foundation leaders think they understand what’s working in their program work, how they use knowledge to make decisions, and what knowledge they share with others. The report includes discussion questions for foundation staff and boards of directors and is accompanied by a separate set of profiles of learning practices at Weingart Foundation, Rockefeller Brothers Fund, Communities Foundation of Texas, and Impetus-PEF.

Want more content like this? Get our monthly must-reads and other blog posts delivered to your inbox.

Strategies for Sustainability in Uncertain Times

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In a year filled with uncertainty, many social sector organizations are asking how they might successfully sustain their impact in the coming years. Changes to the federal budget are expected to increase need among vulnerable populations in the U.S. while simultaneously reducing federal funding for nonprofits delivering critical services. At the same time, individual activism is rising and the line between donor, volunteer and activist is blurring as individuals seek opportunities to get involved with the causes they care deeply about.

Add to this two key trends: a shift from sustaining incremental change to achieving transformational, scaled impact, and a growing understanding of what it takes to create resilient organizations and networks capable of sustaining the work required to make change. These colliding factors have left nonprofits questioning how they can scale their impact in a sustainable way.

When we talk about sustainability, we mean much more than financial sustainability. At Community Wealth Partners, we think of sustainability as an organization’s ability to create long-lasting, transformational impact. This requires funding, sure, but also a focused business strategy, a culture of adaptability and learning, strong partnerships, and the personal sustainability of individuals within that organization.

As organizations adopt new strategies and test ways to scale their impact, we are seeing three emerging themes across our work with partners and the field in general:

1. Creating a culture of innovation

Agility and innovation are key characteristics of successful organizations, regardless of tax status or sector. For commercial businesses, the ability to grow and meet financial goals depends on their ability to provide a unique, valuable service or product to customers. Doing so requires predicting how emerging trends will shift customer needs or upend the landscape of competitors.

The same principal applies for nonprofits and their ability to sustain their impact. As a recent Bridgespan survey highlights, nonprofit leaders feel urgency to innovate, yet also feel limited in their ability to do so. The most successful nonprofits can adapt to changes in the policy environment, rapidly capture new types and sources of funding, embrace and influence emerging social movements, and continuously build new partnerships and pathways to achieving impact. Cultivating an innovative culture, as we’ve found is the case with any culture, requires changing mindsets and behaviors across an organization.

We recently visited AARP’s innovation laboratory, The Hatchery, a start-up incubator and accelerator housed in a physical collaborative workspace, to get an inside look at how the organization is scaling transformative ideas that drive revenue while accelerating AARP’s mission to disrupt aging.

The innovation lab incubates up to three home-grown startups, including a website to help small businesses understand and select 401(k) options. Each new business idea goes through a rapid but rigorous process of coming up with ideas, modeling those ideas, and testing them in the market. Most importantly, The Hatchery and AARP follow a disciplined process to assess and shelve ideas within months if evidence doesn’t suggest they can rapidly grow into independent business opportunities that leverage market forces to drive impact at scale and generate significant earned revenue. The Hatchery also selects a few later-stage, mission-aligned technology startups—like a company developing a virtual reality–based system for remotely conducting physical therapy—and provides them with access to experts, potential customers or partners, and other resources on aging.

Beyond its role as an incubator, The Hatchery is designed to be the center of an innovation revolution within AARP. The open, creative space helps spur new ideas during meetings, and the team trains “Innovation Champions” from various departments across AARP in human-centered design and rapid prototyping methods so each department can apply those skills to their team’s work. The goal is to accelerate a culture of innovation across the entire AARP enterprise, enabling the organization to sustain its impact by staying ahead of emerging trends and designing solutions that meet society’s evolving aging needs.

2. Engaging donors as activists

Over the past year, many of our nonprofit partners have described a shift in their relationships with supporters and donors. Many donors are seeking a more active and engaged role in helping an organization deliver its mission. This is partially driven by the rise of technology that makes it easier for individuals to connect to, engage with and donate to organizations. It is also a result of increased competition for resources among nonprofits and the changing profile of donors—from baby boomers who are often interested in issue-focused membership organizations to millennials who more commonly seek opportunities to directly support specific causes. These factors, combined with a dramatic rise in civic activism, create opportunities for nonprofits to rethink the role donors play in their sustainability.

A leader in understanding and promoting new practices in nonprofit fundraising, The Evelyn and Walter Haas Jr. Fund has begun to define and elevate the concept of a “culture of philanthropy”—an organizational culture in which everyone has a part to play in raising resources for the organization. In their paper “Beyond Fundraising: What does it mean to build a culture of philanthropy?” The Haas Jr. Fund and author Cynthia M. Gibson explain that donors are looking to give to organizations not just because of the work these organizations do, but also because donors aspire to the same goals and want to engage with the organization to achieve those aspirations. The paper highlights four core, interrelated components of a culture of philanthropy:

  • Shared responsibility for development
  • Integration and alignment with mission
  • A focus on fundraising as engagement
  • Strong donor relationships

For example, another of The Haas Jr. Fund’s papers, “Fundraising Bright Spots,” highlights Fierce, a membership-based organization building the leadership and power of LGBTQ youth of color in New York City. Fierce’s former executive director, Angela Moreno, explains that when the organization’s donors attend its top fundraising event, the donors “feel connected to each other even though they’ve never met before.… The history and purpose of our organization is so clear and so deeply meaningful that it’s really easy for donors to say yes to us.”

Passive donors are becoming fewer and fewer. Creating authentic opportunities for donors to experience and contribute to the causes they care about most is essential to sustainability over the long run.

3. Adopting market-driven business models to accelerate impact and diversify funding

Shifts in the ways organizations bring in revenue and encouragement from grantmakers to diversify funding has led nonprofits to explore market-driven approaches and business models to achieving and sustaining their impact. One example of an organization experimenting with a new, market-driven model is the Center for Children’s Law and Policy (CCLP), an organization committed to ensuring the response to youth who get in trouble with the law is developmentally appropriate, free of racial and ethnic bias, and focused on building strengths that help youth avoid further involvement with the justice system.

Since its founding, CCLP has worked in counties, cities and states, delivering trainings, providing technical assistance and advocating on topics such as eliminating racial and ethnic disparities in the juvenile justice system, reducing unnecessary incarceration of youth, and improving the conditions of confinement for youth. Since its work was funded by grantmakers, the organization offered programs to populations and geographies that were priority for funders. When philanthropic and government funding streams changed, CCLP saw an opportunity to use their existing expertise and services and create a new business model to market their expertise directly to jurisdictions through trainings and consultation, regardless of whether those jurisdictions are a priority geography or population for grantmakers. Not only does this strategy generate revenue through a new source, but CCLP hopes it also creates stronger results and buy-in from stakeholders since they are putting more “skin in the game.”

Adopting this new model requires some organizational shifts. To respond to changing market needs, CCLP is adopting new cultural norms: nimbleness, flexibility and entrepreneurialism. As CCLP markets directly to jurisdictions, it is having new types of conversations that highlight the organization’s unique value. It also is creating business processes for more effective staff planning. While the new model requires new approaches, CCLP is already seeing the benefits: it has greater autonomy, it is better able to sustain its work, and it is now able to serve more young people across the country.

Prepared for the Unforeseeable

The only constant, as the saying goes, is change. To survive and thrive amidst changes, nonprofits and foundations must change the way they operate. In addition to AARP, The Haas Jr. Fund and CCLP, we see another great example of this in NeighborWorks America. The affordable housing and community development organization has invested heavily in equipping its network members to become market-driven, innovative organizations able to seize opportunities and weather changes. As profiled in the Stanford Social Innovation Review, NeighborWorks America is in the midst of implementing a multi-year pilot designed to cultivate innovation throughout its network, helping member organizations diversify revenue by adopting new, technology-enabled sustainable business practices.

As these organizations recognize, nonprofits and foundations must adopt new ways of working. We encourage all social sector organizations to explore new approaches to sustainability to ensure sustained impact over the coming years.