December 2, 2013 John Davidoff
When Paul Hamann was appointed president of the Night Ministry in July 2007, he didn’t realize how much of a challenge he’d face in the new role. Hamann had already been a leader in the organization, a Chicago-based nonprofit serving the city’s vulnerable youth and adults. He’d been overseeing daily operations for five years.
A major financial downturn was on the horizon, meaning dramatically tightened funding and heightened stress for every nonprofit. Moreover, as the U.S.’s economy plunged in 2008, the Night Ministry had just expanded the number of shelter beds it offered, as part of a previously planned initiative. “When the crisis hit I sat back and thought, ‘What do we do?,’” Hamann said.
What Hamann and the Night Ministry did next provides an example of how a mission-driven nonprofit can transform a crisis into an opportunity. Mission-driven nonprofits are proactive, entrepreneurial organizations with high-energy leaders, staff and boards engaged in a meaningful mission. “Mission-challenged” nonprofits are the opposite. They’re reactive, low-energy groups with disengaged employees and boards.
In the face of a large-scale threat, such as the 2008-2009 economic downturn, the Night Ministry asserted its position as a mission-driven nonprofit by clinging to its mission and trusting in its own capacity to surmount the challenge.
Let’s consider several key steps nonprofits can take — all of them apply to crisis and non-crisis times — to enhance their mission-driven nature, using select examples from the Night Ministry.
• See Opportunity in Everything: Faced with a crisis, a minor setback or even a natural transition, many nonprofit managers put their proverbial heads in the sand or chase money blindly at the expense of missions. During the recent downturn, there were too many instances of nonprofits focused only on “getting through it,” so they could get back to business as usual. Those organizations missed something important: an opportunity to reinforce or reinvent both their mission and their organization.
An economic/financial crisis can be an opportunity to reexamine your strategy and operational costs. A change in leadership can be an opportunity to inject fresh new thinking. Failing to perceive opportunity in challenges usually leads to a death-grip on the status quo, which almost never yields positive results. As Hamann suggested, “Suffering is what happens when you don’t see a threat as an opportunity.”
When the financial crisis hit, Hamann and fellow leaders doubled down on their mission of providing health outreach, housing intervention and other services to those in need, and thought about how best to do it in a resource-constrained environment.
• Bank on the Board: A strong, engaged board can be one of your greatest assets, both to help you maintain perspective on imminent or ongoing challenges and to provide practical advice for dealing with them constructively. In the aftermath of the downturn, when the Night Ministry was struggling with its finances, key board members helped Hamann understand that it wasn’t his fault. “We’re all in the same boat,” they said, and encouraged him to use the nonprofit’s ample savings (see Plan, plan, plan below) as back-up.
“It was our ‘rainy-day’ reserves. The board said, ‘It’s pouring, let’s use them,’” according to Hamann. The board granted him “permission” to take key measures about which he had been reluctant, and reinforced the idea that cutting back crucial services was not an option.
Having a capable, thoughtful board chair and, for many organizations, an executive committee structure (such as a finance committee and governance committee), are key components of an effective board, as are high standards and accountability for individual members. A highly invested board should be asking for regular updates on strategy, operations and performance/outcome metrics. If your board can’t be counted on in crises or other times, it’s time to wake it up or break it up.
• Plan, Plan, Plan: An effective, comprehensive strategic plan that covers multiple contingencies and scenarios is more valuable than gold when a crisis hits. That means your managers and board members should undertake annual updates of the organization’s strategic plan, keeping the current/projected environment in mind. In the Night Ministry’s case, the nonprofit’s 2003 and 2004 strategic plans had included the idea of building cash reserves “for those challenging times.” As the financial crisis mounted, the earlier planning went a long way to mitigating the impact.
• Stretch Yourself and the Organization: Hamann was brought into the Night Ministry in 2002 to rework the financial system and make sure the balance sheets were “worthy” of donors’ investments.” Five years later, when asked to become president, Hamann was initially reluctant to expand his role beyond operations and interact with external stakeholders. Over time he was willing to stretch into a broader range of responsibilities, including communication with donors.
In fact, in 2008, when Hamann assessed where he spent his time and how much he enjoyed each activity, he was shocked to find how much he liked externally-focused tasks (such as giving talks and meeting donors) and how “worn down” he felt by operational activities. The board helped him reduce his operational load by hiring an accounting manager and other measures), which helped the nonprofit perform at an even higher level and was ultimately part of its strong response to the downturn.
• Trust and Empower Your People: Hopefully you’ve got a strong team in place. If you’re not sure, a crisis will provide clear evidence. Even in less stressful times, nonprofit leaders have to learn to trust their colleagues, to stimulate valuable ideas and deeper collaboration. Hamann, a self-confessed “control freak” by nature, was encouraged by his board’s chair to delegate more, and he took the advice to heart starting in 2007. “I have three vice presidents and I had them take turns leading the organization during my absences,” he said. “When I came back, I didn’t try to change anything they’d done. That was our written agreement. My goal was to support them.” He believes that putting his people in charge helped the Night Ministry build better programs, including the development of a youth shelter called The Crib — an idea Hamann hadn’t supported originally.
According to Hamann, “The guy who sits behind the desk shouldn’t be the one to make decisions about direct services. That’s why we have staff. they are darn good at it.” Today, Hamann said there are only three reasons his team should contact him when he’s away: “A fire, massive amounts of blood or an unexpected donation of $25,000 or more.” He trusts them to handle anything else on their own.
• Share Your Story: In times of widespread difficulty, many nonprofits shy away from the limelight, keeping a low profile for fear that their donors don’t want to hear from them. That’s almost always a mistake. In fact, sharing your story, even if it’s one of hardship, can stimulate empathy and even increase giving, especially if the external challenge aligns with your mission. For example, when the Night Ministry shared that its target communities were in greater need than ever during the downturn, it resonated deeply with donors. Hamann says, “They saw their neighbors in distress and helped us fulfill our mission as part of their personal response to the economic crisis.” Many donors gave more than they had previously; they may not have, had the Night Ministry failed to share the story.
• Be a Mission-Driver: Mission-driven organizations rarely exist without a “mission-driver” at the helm, or several mission-drivers in leadership and board roles. These are the individuals with the vision, energy, drive and capabilities to rally everyone around a meaningful mission and push it to greater heights. As Hamann suggests, “It’s about passion, but also perspective.” He advises that current and would-be nonprofit leaders gain a range of experience in their organizations, including development, finance and frontline service roles. “You’ve got to make the organization’s mission your personal mission,” Hamann said.
Mission-drivers also recognize the variety of contributions people can make. As Hamann pointed out: “Nothing frosts my donut more than an employee who feels they are contributing to the mission more than someone else.” Mission-drivers expect excellence — and put measure in place to promote it — but don’t dwell on mistakes.
Naturally, mission-drivers are always seeking new ways to fulfill and build on the nonprofit’s mission. At the Night Ministry, for example, Hamann and his team are expanding the number of shelter beds they offer, raising funds for a new health-outreach bus and creating more internal leadership positions to support advancement.
Of course, these aren’t the only steps you can take to ensure your nonprofit is mission-driven, but they are among the most important. While crises offer excellent opportunities to assess your mission and means for fulfilling it, any time is a good time to become more mission-driven. NPT
John Davidoff is founder and managing director of Davidoff Communications in Chicago. His email address is email@example.com