Between low unemployment, high inflation, and diverse opinions on the risk of recession, nobody seems to know where the United States’ economy is headed. Economic uncertainty creates twin crises for many nonprofits. Fewer jobs and opportunities mean that the needs in the community increase, but those same factors often lead to a decrease in donations. As a result, your nonprofit may experience higher demands while facing limited resources. How do you decide what to prioritize and what to cut when your nonprofit has to tighten its belt?
Here are three suggestions for how you can weather unpredictability while still serving your community.
Measure What Matters
Real-time data tracking is a critical piece of running a modern nonprofit. It provides your team the information needed to best run your organization and gives your and donors confidence that you are efficiently meeting the needs of your community.
It is important to track many different types of data, including program costs, participation numbers, and other output metrics. But it is essential to track what really matters. Magdalena Nowicka Mook of the International Coach Federation explained, “If you’re measuring what matters rather than what is easy to measure, data can offer clarity and direction. Use it!”
Measuring what matters means collecting the data necessary to understand how your programs impact the lives of your participants and the community at large. How you spend your resources matters, especially in lean times, but the results of your services matter more.
When you understand the real impact of your nonprofit, you can prioritize your resources based on which programs provide the best return on investment. You also have insight into which programs would create the most harm if those services disappeared.
Plan with Purpose
Every community faces countless challenges, especially in uncertain economic times. Though you may be tempted to try, no organization can address all of the needs, all of the time. Overreaching your resources and abilities results in lower quality services and less impact.
Your nonprofit will create the most impact by selecting and defining a specific mission. Whether your focus is food insecurity, affordable housing, or accessible healthcare, you must understand who you are serving and why. Focusing on a specific mission allows you to become subject area experts and develop the most efficient and effective strategies to fulfill your goals.
A defined mission acts as a rudder for your organization. It keeps you on track as you make decisions ranging from new services to new strategies to new employees. Defining a targeted mission also helps you prioritize when you must scale back or even cut services. Nobody wants to reduce their services, but limited resources require you to choose between fewer services or eventually being unable to provide any services.
Keeping your nonprofit’s core mission in mind allows you to adjust your short- and long-term plans to ensure that your efforts and resources are being spent where they most closely align with your purpose.
Adapt with Data
No matter how well intended, not every program results in a positive impact. As an example, millions of American students took part in the Drug Abuse Resistance Education program, or DARE, between 1983 and 2009. The program cost hundreds of millions of dollars and ultimately showed negligible results. While some services fail, others outperform their intended goals. The challenge is discovering which program is which.
Collecting and analyzing impact data allows you to uncover services that are inefficient, ineffective, or, in the worst-case scenario, detrimental. It also provides you with an awareness of which programs could expand their positive impact with an increased investment.
Using data to adapt and pivot in ways that ensure your resources are being used to create the most impact should be an ongoing part of your organization’s strategy. When facing resource shortages, those same practices become critical.
Reliable qualitative and quantitative impact data provides you with the insight and understanding to assess the true value of each of your programs, which then allows you to make difficult decisions with confidence.
Interested in more resources for strategic nonprofit leadership? Watch our on-demand mini webinar “The Power of Strategy: Three Must do Actions in January 2023.”