Plans Are Great... Until

To our community,

“Plans are great…until the federal government decides your organization shouldn’t exist.” This is a real quote from a nonprofit executive director in a board meeting last week, reminiscent of Mike Tyson’s famous line, “Everyone has a plan until you get punched in the mouth.”

Every tax-exempt organization should be talking about risks related to the new federal administration; many such risks are existential in nature. Existential risks can look like a loss of a primary funding source, loss of tax-exempt status, or a targeted IT security or public relations attack that severely disrupts organizational operations. Ask yourselves:

• Is your organization in the crosshairs of a political attack?

• Does your organization hold positional privilege and responsibility to your field?

• What conversations about risk should your organization be having?

In board conversations, we must hold both mission stewardship and fiduciary responsibility. Too often, boards use “fiduciary duty” as the excuse to avoid the critical decisions that leadership requires. Don’t play that number while your ship sinks. This moment requires a leadership mindset that can hold care for our communities and care for our organizations – a mindset of purpose-driven board leadership.

This might require a shift from “How can we ensure our organization survives?” toward “How can we make sure our organization’s work carries on?” (Check out our “Meeting the Moment” newsletter about protecting the ecosystem through strategic partnerships here, if you want to read more on our thoughts around this.)

How to Prepare Your Organization for Existential Risks

• Understand your balance sheet

  • Your net assets provide the broadest overall view of your financial health and indicate your solvency cushion in long-run scenarios.

  • Assets with restrictions represent obligations and could limit your ability to move nimbly.

  • Liquidity measures, such as days of cash and working capital, inform your ability to respond when risks are realized.

• Identify and monitor risks

  • Assign someone to “own” (in the MOCHA sense of the word) the topic of risk management and mitigation within your organization.

  • Use this worksheet to identify and prioritize risks for mitigation planning and ongoing monitoring.

  • Connect with peer affinity groups. In recent weeks, we’ve found that organizations with shared missions and business models are the among the best places to go for risk monitoring information and conversations. This might look like a membership association in your field of service or a public policy coalition at the federal, state, or local level.

  • Intentionally engage the news, using a critical lens, and at the right pace for you.  Watch out for news that could affect your organization and accept that you can’t know or anticipate everything.

• Prepare your board

  • How well does your board understand your organization’s operating ecosystem, including interdependencies and shared risks with peer organizations?

  • Can your board play a role in local and state advocacy on behalf of your mission and organization?

  • Is your board familiar with the structural options available to facilitate nonprofit partnerships?

• Engage with partners

  • We pursue our missions in connected systems with shared goals and interdependent theories of change. In other words, your ability to pursue your mission relies on other organizations doing their part. This is the time to step into partnership in its many different iterations. Whose work is your work dependent on?

  • Does your risk mitigation plan include the possibility of transferring programs and/or assets to community partners to ensure the continuation of your work?

Take care of yourself and one another. We’re in an historic moment. We are the leaders for this moment. And, this moment will pass.

With Care,

Tangelo Tree Consulting