Time to change the 5% rule for foundations! 10% or bust!
WhosTalkin: Buzz research

The New Assumptions : Plans for the Economic Crisis

At this stage, it is clear that nonprofit and advocacy groups are also headed for extraordinarily difficult financial times. The cash crunch for the advocacy movement will be as bad as we can imagine and far worse than we can easily manage. We need a plan for how to remain effective.

We should all begin to operate with new assumptions:

1. We are going to be poorer nation. We are going to have less money to work with and we are going to be paying off debts and expenses for years to come. We must squeeze value out of every asset we have built or purchased.The decline in the national economy is going to reduce the cash flow into the advocacy movement by between 20 and 50 percent. Almost every organization will lose staff. The progressive advocacy movement at the end of 2010 will look very different from the movement at the end of 2008. all the best "recovery plans do not really mean "go back to 2007" they mean avoid 1929.

2. Unlike large, centrally managed corporations, the movement is going to dissolve in unpredictable and erratic ways. The sector’s many externalities, as well as its unregulated and dysfunctional reward and punishment systems, will bring about a rapid, non-linear unraveling of capacity. This means that the most effective groups might not survive, and the least effective groups will not automatically disappear. Nor is there a model to predict which group, partner, campaign staff, or policy wonk is going to be around next month. No one knows what regional offices national groups will close. The groups are not coordinating reductions. The talent and assets that remain are going to be scattered across the landscape. The movement will be left with a bunch of loose threads. The economic crash is going to require a sustained effort to repair and reconnect these threads--the elements of our movement--in order to continue to mount successful campaigns.

3. The deepening recession, environmental changes, political shifts, technological evolution and the ongoing wars will combine to create movement toward rapid change and cultural instability. There will be a quickening of political, cultural and individual behavioral change. For at least two years, the federal government is going to be dominated by Democrats. They are going to be able to move legislation and government action quickly on issues like health care, energy and public works. Opportunities to influence significant events and policies are going to come in tighter and more intense waves.

These assumptions will drive the way leaders in the nonprofit sector plan their organizational budgets. In the advocacy and social change movement, however, we rely on networks in addition to organizations to lead and drive change. Just as managers are creating plans for their organizations, the networks need plans to rationally deal with the reductions in overall capacity while also capitalizing on the opportunities that these disruptions will produce. We need something that is not “more of the same,” only smaller.

If we can ask the energy industry to remake itself, if we can ask health care industry to transform, if we can assume the auto industry will be totally different ...where is the vision for our own sector?

The network plan should take advantage of the technology and organizing tools developed in the last several years to manage a constructive reorganization and establish a new model for organizing that is smarter and more effective than the current model primarily dominated by large silos of competing institutions.

Join the planning discussion over on a wiki I set up to kick start the conversations