So far, 2020 has been the year of Murphy’s Law: “Anything that can go wrong, will go wrong.”
The international pandemic that has shut down the globe has affected virtually every aspect of our lives - our economy, our government and our philanthropy. The charitable sector has been hit especially hard; reduced donations, cancelled fundraising events and an economic decline have decreased revenues while the same factors have increased the need for services that so many charities and non-profits are struggling to provide.
In the spirit of cooperation, the Resilience 2020 Project has been created to seek input from Canadian charitable non-profit sector professionals who are sharing their experiences, challenges, perceptions and insights on how to best move forward.
When the government started closing businesses, restricting movements and gatherings, many organizations and experts supporting the non-profit sector immediately mobilized to provide advice, training and guidance. However, the situation changed so rapidly that many ideas became irrelevant as regulations changed, outbreaks occurred in long-term care homes and race relations came to a head all around the world. Each organization reacted differently to new hurdles and a pattern began to emerge. Through surveys, conversations and focus groups, the Resilience 2020 Project is finding out what the sector IS doing, will be doing and hopes to do as we enter the new normal of 2020 and beyond.
What’s Happening Now?
In 2019, risk management for many organizations did not exist beyond simple financial procedural risk such as bad investments, hacking, fraud or senior staff leaving. Pandemic shutdown risk management did not even enter into the conversation but now it is the conversation. This has caught non-profits off guard and some are going numb, freezing in place. Few would have supposed the pandemic would have continued this long with so many implications. Imagine Canada states that one out of every five organizations in the sector has ceased operations and many of those do not believe they can start up again.
The protests and racial equality crisis that has emerged has also given many charities another concern to address immediately that was not on most organizations’ radars.
Layoffs throughout the sector are widespread. As expected, many organizations that were struggling were the first to lay off staff. However, many strong organizations that are not health or welfare related (arts & sports organizations in particular) have been especially hard hit.
Some organizations have asked senior (or all) staff to take pay cuts to ensure there are no layoffs; however, if the lockdown continues and organizations do not find alternative means to raise needed funds, it is likely that layoffs will occur.
Layoffs are troubling for many reasons. Many of those being laid off are new or recent hires and there is a good chance that a significant proportion will seek work in equivalent paying jobs in other sectors that will experience faster recovery than the charitable sector. Also, there a noticeable trend of senior / long-term staff considering retirement rather than adapt to lower wages for the same work level. This will create a significant knowledge gap at a time when that knowledge is needed the most. Additionally, those staff members with strong digital / virtual / networking skills will be in demand by businesses in other industries that may get up to speed faster post-COVID than the third sector. Having to re-establish full staffing levels will be harder than just rehiring people and will take up much administrative and leadership time that will not be available for fundraising and program support. This may be even more difficult in a virtual environment.
Stagnating organizations and those that were slow to change to digital, move from tried and true methods from the past are also being hit hard. The inability to adapt has made them more vulnerable in this crisis. The pandemic could become another excuse to do nothing, and this will have dire consequences for the people supported by these charities.
On a practical note, one the first topics of conversations, twitter feeds, and blogs was about “what to do on a daily basis.” These were generally along the lines of “look at the things on your desk you never have time for, do training, learn a new skill, etc.” There was no talk about managing or quantifying these tasks or how to motivate staff to do so. During a focus group one participant noted that if someone suggested to any executive director in January that all their staff should work from home, they would have “run away screaming” but now it is a reality that will have to be addressed as many for-profit and government sectors are making virtual offices the standard. The management of people is a vital skill that was lacking in many charities before February and it will need to be reemphasized, as will ROI for time and tasks in the new normal.
Training on apps, programs and tech troubleshooting is something that should also be considered. Much like Microsoft Office training now, familiarization with conferencing apps is left to the individual and it’s assumed that everyone knows a little about them - enough to get by at least – and as a result, the full power of these tools is not being taken advantage of. Training on virtual conferencing and presentations for larger and wide-spread organizations will give those that develop these skills a clear advantage both in internal matters and when communicating with donors. Fundraisers who are able to use, host, facilitate and troubleshoot the myriad of different applications available when speaking with donors will ease frustration and help to establish trust.
What is the state of non-profit right now?
Traditional special events are dead for the current calendar (and even fiscal for those whose year-end is March.) Organizations that have relied heavily on them are in the most severe revenue crisis. Anecdotes about virtual events, individual pledge events and “clever twists” on events like marathons and the like will most likely remain impractical on a large scale or sector-wide.
One-off solutions can and should be used during this crisis, but are not substitutes for fundraising that is direct, personal and focuses on the needs of the donor as they relate to the case. Hi-touch (virtually) and personal communication and stewardship practices are critical.
Virtual events, crowd fundraising, and those that rely on social networking are limited to those with wide networks and a dedicated and savvy base of supporters. While many fundraising organizations with a younger but more established on-line following are doing well; it remains to be seen if these efforts can be sustained and one-off events replicated for sustainability.
During this pandemic, Planned Giving has been very strong for those organizations that have not shied away from asking about it.
Government grants may be focused on corporate welfare and / or even more targeted.
The conversation around one particular fundraising method revealed a wide variety of opinions. Some respondents asked, “Is this pandemic the death knell for direct mail?” While there was some agreement that this is the case, there was also anecdotal evidence and advice from direct mail experts that the reverse is true. Multi-channel fundraising is still the best option; however, the weighting of efforts will need to be even more individualized, tested and analyzed than before.
No matter the medium, sincere communication with stakeholders is important. Talking about why the current case for support is still relevant during the pandemic is also essential but it is critical to remain genuine and not use the pandemic to further the cause if it is not related. However, charities are going to need to examine their case for support to future-proof it. How will their charities look in the new normal, during transition etc.? How will they fundraise, deliver services and impact, show flexibility, safety and responsibility? Once there is a new normal, established donors will want to continue to support their favourite causes but will have a new set of questions to ask.
COVID-19 seems to be a “mother of invention”. This is especially true for organizations that find the need for their services is as great or greater than ever, but their method of delivery has been curtailed by legislation and circumstance. A breakfast program for kids delivered at school was put on hold, so the staff at the charity gave out gift certificates to buy breakfast. The charity’s board and the school had to act quickly and positively to provide the meals in a unique way and had to cooperate differently.
Cooperation is another concept that is sprinkled liberally throughout the conversation. While anecdotal examples of new cooperative efforts are being put forward, charities will have to merge, cooperate and partner more systematically in order to survive. Indeed, while cooperation and collaboration has been a theme of many strategic plans in the past, few organizations made efforts to reach out beyond their existing partnerships before COVID.
Planning for the Future
From an economic standpoint, there is some precedent that the sector as a whole will take three years to recover (2023) and will be 18 months behind the for-profit economy. Like all other industries there will be exceptions.
While the Canadian government’s attempt to rely on a single charity to deliver its national youth volunteer program has gone horribly awry, charities will continue to be required to fill the gaps locally and in specific situations where nimbleness is needed.
Take the example of long-term care, the industry that has been devastated by loss during COVID-19. Before the pandemic, there was a trend towards larger for-profit homes being built in many cities and these homes were partnering with the health care sector. In survey results and our focus-group there was real concern about caring for elderly clients and parents, whether it is in non-profit homes, home-care or other solutions. Charities will need to fill the gaps for very specific types of elder care that are community, cultural, and belief based. With the complexities and difficulties around legislation, finding workers and the affordability of quality care there will be a role for charities to work together to provide solutions in the near term.
Internally, charities are struggling with funding, governance, performance and planning issues in ways that are both new and unprecedented in scope and scale.
There is universal agreement that any current strategy is now “out the window.” Revised strategic planning is definitely needed but many boards seem to be hesitant to begin any type of planning and are in a “wait and see” pattern. Charities that can begin to think strategically now will be in a better position to be flexible and take advantage of new opportunities as they arise.
Because of the rapid pace of change, there will be more reliance on senior and program staff to make bold decisions and put them into action quickly. Charities with boards that remain governance boards and who do not leap into day to day management during the crisis will be better suited for success over the next several months. This pandemic has shown that political leaders can and will listen to well-reasoned evidence-based advice from experts. Boards that do the same with their staff, including fundraising staff will have the best chance of long-lasting impact.
As previously stated, financial concerns are paramount in the crisis. As individuals, families and businesses dip into reserve funds there has been little talk about this same strategy with charities. While many organizations have them, there is a reluctance to speak directly about the issue. The project has discovered that there is some reluctance from boards to tap into reserve funds. Additionally, in the focus group there was intellectual agreement that post-COVID reserve funds would be of even more importance and that fundraising for them would be easier as donors would understand the need for the “next emergency.”
Many of the themes addressed to date in the Resilience 2020 Project have been explored, at least on the surface, by organizations such as AFP, Canadian Charity Law, and other leaders and non-profit influencers. In the coming weeks and months we intend to delve into these issues in greater depth through expert panel podcasts, reflection discussions and focus group sessions. Through this sharing of perspectives and ideas, we hope to help the non-profit sector move forward and position it to successfully meet the challenges that lie ahead.