THE FUTURE OF PHILANTHROPY AND FUNDRAISING:
FACING NONPROFIT ORGANIZATIONAL EXTINCTION BECAUSE OF THE CORONAVIRUS?

How partnering, collaborating, or merging can save you and your mission

Andrea McManus, ViTreo Group Inc
May 12th 2020

Is your nonprofit Endangered, Vulnerable, and Threatened because of the Coronavirus?

Is our sector looking at charity extinction in a post COVID world?

In last week’s The Provocateur, I talked about future proofing your organization and we looked at some Harvard Business School recommendations for businesses to create sustainability. And how nonprofits could tailor some of those ideas to help them through and past this time.

But what if keeping your organization alive is not in the best interest of your mission and your beneficiaries? Is there a different or better way to support your cause?

Will this be a time of Evolution or Extinction for your nonprofit?

I’ve said this several times recently:

The organization is not the mission. Your beneficiaries are your mission.

John MacIntosh, managing partner of SeaChange Capital Partners, a nonprofit merchant bank in New York that helps nonprofits work through complex challenges, had this to say in a CNN opinion piece:

“Covid-19 is poised to become an extinction-level event for America's nonprofits. Cultural institutions have been forced to close their doors. Organizations working in and around public schools or in senior centers cannot provide services because their clients are not showing up.

Fundraising events have been canceled. Many essential front-line social services -- e.g., operating homeless shelters -- cannot be delivered remotely and pose particular risks of infection, increasing the costs of keeping staff safe.

Unless government, funders and nonprofit leaders take immediate and decisive action, many nonprofits around the nation may just disappear over the next few months leaving those they serve and employ in disastrous circumstances.”

- CNN, Covid-19 Could Mean Extinction For Many Charities, John MacIntosh, March 20 2020

If you are struggling to deliver on your mission (as many nonprofits were even prior to COVID-19), it could be time to take a step back and look at whether this is an opportunity.

For some nonprofits, the decision will be do you evolve, or do you carry on and pray that, somehow, you can struggle through this? And if you do that, the reality is you still face the possibility of extinction, of not surviving.

And the basis for that decision has to be what is right for your mission.

Are there other organizations that are better able to serve your specific vulnerable population or cause? This could be the time for some nonprofits to gracefully exit (the equivalent of hospice care for some charities).

Other nonprofits may be merger candidates. These could be those organizations most reliant on government funding. Our governments will need to find ways to pay for the pandemic and may force some mergers to conserve and consolidate administrative burdens.

We have already seen evidence of some organizations looking into the future and making these decisions even ahead of the pandemic.

In October, 2019, a significant merger occurred between the Children’s Wish Foundation of Canada and Make-A-Wish Foundation® of Canada, with the goal of increasing the new organization’s ability to make a greater difference. Both organizations had operated for many years with similar guiding missions, visions and values. 

“The union is the result of extensive, collaborative and thoughtful planning involving expert advisors and leadership from both organizations. The integration will take place in a phased approach over the next 12 to 24 months.”

- Children’s Wish Foundation and Make-A-Wish® Canada Announce Merger to Grant More Wishes to Children Across Canada, October 2 2019

On April 15, 2020, Aspen Family and Community Network and the Boys & Girls Clubs of Calgary merged their agencies to create a new, unified organization, ONE BIG DOOR, that ensures stronger supports for the young people, families and communities that we serve. This was also already in the works in 2019. Again, the goal was to provide greater services to its beneficiaries. (Aspen Family and Community Network Society, Aspen And Boys & Girls Clubs Of Calgary Announce Merger, Shannon Edwards, April 15 2020)

CEO of the newly established ONE BIG DOOR, Jeff Dyer, said this about the merger and the influence of the pandemic:

"The merger was months down the road and we intended to announce on April 2nd, but felt the timing was poor as people, including our staff, were tending to the pandemic. So, we opted to delay announcing by two weeks so that things could settle down enough to address our staff concerns and to not be sharing a message that was tone deaf to the public. Otherwise, the pandemic played no role other than to validate the financial rationale.

The rationale for the merger is only strengthened by the pandemic and the Alberta economy. An early catalyst for considering the merger was to see if there were financial efficiencies that we could find that would protect front line service delivery, enhance that service (lowering between agency barriers, sharing research & evaluation, etc) and protecting us from capped and even receding core funding. Now that point is all the more relevant, though throughout our merger exploration, we downplayed this time and time again, knowing that financial efficiency is not nearly enough of a motivator for coming together. We constantly asked ourselves, ‘is this better for those we serve’ and then, ‘is this a better return on the investment that our donors, funders and sponsors entrust us with?’ and at each step of the way this was confirmed and affirmed.

Now, the pandemic and Alberta’s troubled economy only make the latter question an even more resounding ‘YES!’ but it is the alignment of services, the way we can now holistically support every member of the family in a hyperlocal way in more neighbourhoods through an integrated pathway that supports people on their entire life journey. We simply were not going to be being the curve, slow to react to the changing landscape. We opted to lead, to boldly reimagine everything about these two legacy agencies in the hopes of something better. We opted to write the news as opposed to be on the front page, commiserating about how troubled our sector is.”

- Aspen Family and Community Network Society, Aspen And Boys & Girls Clubs Of Calgary Announce Merger, Shannon Edwards, April 15 2020

The above is a powerful statement and testament to true mission alignment and fulfillment. You can watch their full announcement here:

THINK COLLABORATION, NOT COMPETITION

We need to rebalance our thinking and our actions between competition and collaboration in fundraising specifically and operationally generally. This is something that’s also happening more often in the for profit world. Intelligent leaders realize we are stronger together and that their purpose is to bring value, not just win.

Collaboration between nonprofits is not a new idea by any means. The Stanford Social Innovation Review discusses the concept in Hacking Non-Profit Collaboration:

“If collaboration is so helpful, why is it not the norm among nonprofits? Historically, nonprofits have used collaboration to keep sinking organizations afloat. Organizations yield greater efficiencies through consolidated administrative functions or more rare structural alignments, such as mergers. Occasionally, to induce collaboration where it might not naturally occur, funders provide grants to entice parties to work together on a project. In my experience, these ‘hard wired’ and laudable relationships require significant negotiation, as well as time and contracts to delineate the responsibilities and rights of the parties. When they are done, they are difficult to undo, and consequently, organizations enter into them reluctantly. Adding to the hesitancy, some charities operate from a position of scarcity—a sense that a finite amount of money will be donated to an increasing pool of organizations. This raises the stakes for sharing by forcing organizations to compete for a larger share of the funding pie to the detriment of others.

What if instead, nonprofits operated from a position of abundance—the notion that working together can achieve more than working alone? In these times of wide-scale disruption, the pace of change mandates that organizations more quickly maximize the potential of existing programs and operating models. At the same time, they should seek to generate new value from a continuing flow of fresh ideas. This requires repeated ideation, prototyping, assessment of what works, and scaling to meet the need. Nonprofits will need cost effective ways to conduct numerous, rapid experiments concurrently if they are to uncover new and better solutions. One way to achieve this is by spreading the risk among many collaborators.

- Stanford Social Innovation Review, Hacking Nonprofit Collaboration, Art Taylor, May 17 2017

And to repeat what was written in the above quoted article — “What if instead, nonprofits operated from a position of abundance—the notion that working together can achieve more than working alone?”

Something to consider.

Last week, I wrote about creating partnerships with your donors, funders and supporters based on the Harvard Business School recommendations to make your customers your partners and to further engage them.

What other organizations are doing similar work? Consider approaches to working with other aligned charities. We are seeing this with innovative for profit businesses who are partnering on service delivery. Think collaborative fundraising platforms like Calgary’s RESOLVE campaign, a unique collaboration of nine Partner agencies which raised $120 million to build affordable and supported rental housing for 3,000 vulnerable and homeless Calgarians. 

The community was in favour of this and supported it. After the more active part of the fundraising effort was completed, RESOLVE former Executive Director, Sheryl Barlage had this to say in an interview with Sharon deBoer, Director of Development at Calgary Homeless Foundation:

“Proving that collaboration can work. Our Partners and volunteers are doing amazing work in our city – they are enthusiastic, passionate and committed to helping Calgary’s most vulnerable. Having the opportunity to work with nine respected and visionary agencies, and 39 influential leaders in the community is inspiring. It is definitely a privilege to be a part of the Campaign.”

- Calgary Homeless Foundation, RESOLVE Campaign Interview with Executive Director Sheryl Barlage, April 1, 2015

This visionary type of collaboration had never been undertaken in Calgary, or as far as we know, anywhere else at the time. And at the time, it ended in 2018, it was a success on multiple levels. Globally, other organizations looked at the model and began to consider implementing it.

More examples of successful partnerships include:

The Trust Collective, Toronto Foundation’s response to the growing need for investment in women’s and girls’ issues, is a recent collective impact project to encourage more women in philanthropy and improve the conditions for vulnerable women and girls in Toronto.

Toronto Foundation, When Women Succeed We All Win, as of May 12 2020

Kelowna General Hospital Foundation and Canadian Mental Health:

“A first-of-its-kind fundraising partnership between two local, non-profit organizations has been a remarkable success.

In just seven months, the KGH Foundation and CMHA Kelowna have succeeded in their goal to raise the funds necessary to open Foundry Kelowna, a new integrated care centre aimed at supporting youth and families struggling with mental health and substance issues.”

- CMHA Kelowna, KGH Foundation & CMHA Partnership Succeeds. $2million Raised to Open Youth Mental Health Care Centre, as of May 12 2020

ACCELERATE ENGAGEMENT

If you are already working in partnership with other charitable organizations, this is a good time to accelerate your engagement with them. How can the two of you (or three or four…) provide solutions and create good. Could what you are doing together now be better?

Pivot is an oft-used word these days and for a good reason.

In a recent ViTreo quarterly team meeting, we were honoured to have Bob Carter, CFRE, Chairman of Carter, an American group of philanthropy specialists, join us with other guests, to talk about the next 100 days of the pandemic.

Bob had a great analogy (of course) about one of the actions nonprofits could take during this time — from none other than the Great One…Wayne Gretzky (for those who don’t know — Wayne Gretzky is a Canadian-born hockey player and NHL Hall of Famer. For two decades he dominated the sport, setting a host of league records):

KEEP YOUR NONPROFIT FROM THE 2020 LIST OF EXTINCT CHARITABLE ORGANIZATIONS

Doing what we have always done isn’t going to work. Change is being forced upon us and the survivors will be the ones who accept that and look to the future.

As I said in last week’s blog, everything has changed because of the Coronavirus. And one of those changes is priorities. This has been a time for many of us to reconsider what our priorities are and as a result, what has shifted. What was important a few months ago may not even be on the radar anymore.

This will also be true for donors, funders and supporters. Philanthropy can be catalytic and may drive changes in our sector. Donors will drive change and may also drive changes to the way some charities operate. Philanthropy is a motivator for good, to be good, to be better, to be innovative and to be committed to mission above all else.

Taking action now is critical. Hope is not a strategy.

Be sure to drop in next week for the third part of our series on The Future of Philanthropy and Fundraising.

We are hosting a series of Fundraising Ask Anything Events where you can connect and ask questions of your peers and the ViTreo team. Learn more and register here.

ABOUT THE AUTHOR

Andrea McManus, Chair, Board of Directors, Partner
ViTreo Group Inc

Andrea McManus is a Partner with ViTreo with over 30 years’ experience in fund development, marketing, sponsorship and nonprofit management. A highly strategic thinker and change maker, Andrea has worked with organizations that span the nonprofit sector with particular focus on building long-term and sustainable capacity.