2020: Balancing Risk and Opportunity in an Age of Monumental Change
Well-established banks dating several-hundred years old have weathered every economic storm without a hiccup. They prospered during the most turbulent times.
That is not the case for the vast majority of social sector organizations. Regardless of size, independent sector organizations would be well served by following the example of the oldest banks. How? Follow your mission. Spread risk. Diversify revenue.
We are entering what is deemed the fourth industrial revolution. The same fundraising methods the majority use will not work indefinitely.
You may feel pressure not to reinvent the wheel. However, in a world that is less reliant on the wheel, try not to get stuck behind it.
In the upcoming year, 5G technology and predictive analytics will be front and center in marketing. Yet, many nonprofits are still not capable of an accurate analysis of current donor data and behavior, let alone modeling future giving. There are opportunities that come with massive technological innovation.
According to the World Economic Forum:
“We believe 5G will change the world even more profoundly than 3G and 4G; that it will be as revolutionary as electricity or the automobile, benefitting entire economies and entire societies.”
Increasingly, funding is going to collaborative efforts that have a probability of solving social problems and creating stronger communities. You know this, but have you taken action?
Donors do not expect social problems to be indefinite. If you are grappling with outputs and outcomes, think collaboration and solutions.
As funders have been preaching for years, collaboration is no longer optional. Case in point, a recent release from the Knight Foundation calls for ideas exploring collaboration using advancing technology:
“MIAMI — November 13, 2019 — The John S. and James. L. Knight Foundation today opened a call for ideas that explore how the widespread digital collection of data can be harnessed for greater civic engagement and stronger communities. The call, which is open for applications through December 13, offers recipients a share of up to $1 million in funding.”
Here is a call for collaboration from the Cystic Fibrosis Foundation:
“The foundation is challenging potential collaborators to submit proposals that will accelerate the pace of progress in cystic fibrosis drug discovery and development, and intends to allocate half a billion dollars to the effort through 2025.”
There is no better time than the present to candidly re-evaluate the state of your organization, and it’s worthiness for funding.
To compete in a capitalist market economy, we have to play by market rules. Truth be told, funders have been lenient. Funding has not been consistently awarded to entities that create solutions. It has been going to the players who are in the system who do good work.
There have never been guarantees of continuation of prior funding. Yet, in this brave new world, funding dollars are ripe for both risk and opportunity.
How would your organization fare if your two largest donors sent their money elsewhere? Seek guidance if you do not have in-house expertise.
Here are six actions to reduce risk and increase readiness for opportunity:
- Hone in on your niche mission more than ever, and improve.
- Reevaluate frequency of strategic planning as prior accepted planning frequency may no longer be sufficient.
- Identify allies and potential collaborators, whether they be persons of influence, government officials and offices, businesses, complementary organizations, or currently perceived competitors.
- Identify worst case scenarios.
- Predetermine triggers that will signal implementation of predetermined actions.
Finally, there is no longer time to delay what your board has agreed upon for years. Diversify your portfolio of funding streams.