What the Futures Hold

I’ve just returned from the Giving Institute Summer Symposium where there was a fascinating discussion about the future of the nonprofit sector lead by Dr. Paul C. Light – whose career includes service as a professor at New York University, a fellow of the Brookings Institute and a director at the Pew Charitable Trust.

The discussion centered around Paul’s hypothesis that every organization has many possible “futures,” all of which are subject to decisions made everyday. For the nonprofit sector, he has narrowed his focus to four possible futures that most nonprofits will realize in this turbulent recessionary world.

Future 1 – The Rescue Fantasy . In this future, the organizations base their future on the hope that some stranger – a white knight if you will – will ride into town and bestow upon them a gift (or gifts) that will save the day, without the organization doing much other that waiting for it to happen. At Alexander Haas, we have a saying – “hope is not a strategy” – and this clearly seems to be a strategy of hope. Heck, even lottery winners have to take the initiative to buy a ticket.

Future 2 – Withering Winterland. In this future, organizations essentially “starve themselves” into a weakened state through a series of hiring freezes, layoffs, pay cuts, etc., to the point that the organization ultimately fails. Paul believes that this future is likely to become reality for many organizations, including some large “brand names” in the nonprofit sector. I doubt anyone reading this newsletter has not seen a nonprofit (perhaps even their own) take some steps down this path.

Future 3 – An Arbitrary Winnowing . In this future, a lot of nonprofit organizations fail, but somewhat randomly. Some of the survivors simply outwork others and are able to secure funding to keep going. Others are so well-entrenched in their community that a plea for a bailout works – even if they should, perhaps, be allowed to fail. The ultimate outcome of this future is a nonprofit sector comprised of fewer and weaker organizations that reduces the sector’s ability to meet increased service demands. This is an interesting scenario in which one of Dr. Light’s main thoughts is that some organizations will survive because they are “popular” rather than because they are “good.” At first this seems absurd – right? But think for a minute and I’ll bet you come up with an organization that has been successful in securing support, even though you may not think they do a very good job of delivering service.

Future 4 – Transformation. This is the most hopeful of the four possible futures, in which organization respond by looking at everything they do and making strategic changes to their behavior that actually allow them to come out of the recession a better organization. This future requires both leadership and “guts”; as well as a willingness to look critically at all aspects of the organization – including the sacred cows. In a way, this future plays on an old saying – “never let a good recession go to waste” – that hardship creates opportunities to do things that would not be possible in times of prosperity.

Certainly, not all organizations are limited to these four futures – some may have more, some may have less. But, it is interesting to look at these scenarios and think about which path your organization is currently on –rather it is for profit or not-for-profit – and if there is an opportunity to change paths. I have heard it said many times that 2009 was the year of survival, but what will 2010 become? Hopefully, it can be the year of thoughtful self-analysis and getting on the path to transformation.