We’ve all got an Achilles’ heel – that area of weakness and vulnerability in an otherwise strong and healthy entity. But for some, that Achilles’ heel may just be the single greatest point of greatest vulnerability.
Too many nonprofits suffer from multiple points of vulnerability: an underperforming board; a revenue stream lacking in diversification; an absence of an employee recruitment and retention plan; no strategic plan, or a failure to adhere to it; trying to be all things to all people, and so on. Having any, several, or all of these problems weakens an organization. But the greatest vulnerability—the Achilles’ heel of too many organizations—is the failure to plan for sustainability.
In a recent conversation, a development director described his organization as living hand to mouth, a description that I’m sure resonates with many. When I asked the size of the operating budget, he said $1.85M. My immediate thought was that there’s no excuse or reason why this organization should be living hand to mouth. I’ve no doubt that had I asked him why an organization of this size saw the need to be living this way, he would have had plenty of reasons: limited donor pool, the starvation cycle, too many restricted dollars and not enough unrestricted, etc. But those are misdirection, looking to explain symptoms rather than the root cause.
This is an organization that, again, like so many others, has failed to think about the long term, failed to think about sustainability, choosing, instead, to think only about the now, the day-to-day, month-to-month. This is survival mode, not viability and sustainability mode. When organizations fail to take the long view with their finances, they also fail to take the long view in too much else.
One of the things that I notice whenever I teach a class on program design are the looks on the faces of those in the class when I talk about the importance of a sustainability budget. After all, why would you start a new program if you didn’t want it to hang around for a while? And, yet, it is an odd new program that comes with such an attachment. It comes with a start-up budget, that just might be a two year, as opposed to just the first year, budget.
Not what we would call a sustainability budget. And, too often, that start-up budget is either only half a budget—just the expenses—or a whole budget where the incomes is just coming from grants. And when the inevitable question on the grant applications asks about how the organization plans on paying for the program after the applied-for-funds are expended, the answer that is too often given is generally “additional grants.”
Again, not a sustainability plan. Even though we know that with any new program we are going to need to spend the first several years tweaking the program to insure the desired impact, and we know that it won’t be a perfect program right out of the door, we do think we are going to want the program to become an integrated part of our programmatic repertoire. The odd thing, however, is that despite knowing that, little to no thought is given to its financial sustainability.
Too many organizations are so enamored with the notion of doing more (i.e., becoming bigger) to fulfill their mission promises that they fail to notice the harm that happens when they sacrifice the security of sustainability, and the quality of services that knowledge of the fact of sustainability brings. Don’t get me wrong: they notice that there isn’t enough money to do some of the basics, that they are constantly questioning whether they will be able to make next payroll, that they can’t replace the broken toilet in the ladies’ room, or they can’t hire a development associate. But they don’t notice the long-term harm and costs of what they perceive as a problem of the moment: not enough money for the now. And far worse, they think this is how it is supposed to be, how it has to be. And nothing is further from the truth.
Nonprofits are not supposed to live hand to mouth,
constantly wondering how they will make it to next month, let alone next year,
or next decade. Just because that is how
so many nonprofits operate doesn’t make it the right way or the way it is
supposed to be. That thinking must stop
If an organization’s mission was important enough to start the organization, and the mission is still necessary now and for the foreseeable future, then that organization demands—yes, demands—a plan for its long-term sustainability that involves a realistic multi-year budgeting process and an accompanying diversified development strategy.
To do anything less is, quite simply, immoral. To provide services not supported by a multi-year strategy that ensures a greater chance of a long-term presence than the current strategy of “winging it” is to offer clients an ephemeral promise of help, one that is here today, maybe/maybe not here tomorrow. But Isn’t part of our promise that we will be here, strong and solid, so you can depend upon us for as long as you need and/or want what we have to offer?