2009 Forecast - A year for resilience and change during uncertain times! Prepared by Ann Bown of Charisma Communications, she is a financial sustainability consultant, mentor and coach to non-profit organisations. Non Profit Organisations know how to cope in troubled financial times but we need to be realistic and ask ourselves if we are in a recession yet, is the full force of its might starting to bite, is this the calm before the storm, will the global downturn hinder development in South Africa? The majority of non-profit organisations know that they will never be in a secure financial space, we do the work and worry about money later, we are vulnerable at all times, it’s how we define ourselves, there are no guarantees, so we adapt to cut-backs very quickly and are familiar with disappointment. Quite simply our strength and purpose on this planet is to respond to the social needs in society and address injustice, to be humanist and make the world a better place. Often this is achieved with nothing more than the smell of an oil rag and lots of sweat equity. As long as we have basic resources and the help of good hearted volunteers we can survive any downturn – the private sector and government would be wise to watch and learn from NPOs and gain some tips on how to do things with little money. A builder once said “a storm is a good time to spot leaks”. During these days of recession we need to be practical and introduce measures to work smarter and focus on areas that will influence the future, and plug leaks. A good place to start would be to review your PEST analysis (Political, economical, environmental, social, and technological) and of course the good old SWOT. Leadership in fundraising actions: We must continue to make our beneficiaries the priority and not the payroll, become stingy if you have to, cut costs, fundsave wherever you can by securing goods in-kind; work harder at staying in contact with your donors, don’t dilute your fundraising efforts but rather increase the number of “asks”, go all out to build new donor relationships, do things with a stronger sense of purpose and use the internet to broaden your profile. Some NPOs have already indicated that they intend to cancel ICT upgrades or new IT projects but this would be shortsighted. There is often a lag between the private sector being hit by a recession and when it starts to bite into the non-profit sector. Brace yourselves for corporate giving to decline by 15% during 2009/2010. Collective Corporate Social Investment (CSI) in 2008 was a record breaking R4,1 billion (source: CSI Handbook 11th edition) on average there has been a growth of 10% per annum since 1998 but this trend will be shackled for a bit but should fair well again in 2011 – so those who depend considerably on CSI funds should negotiate with their funders to realign budgets as well as their fundraising strategy. A more drastic cut will be in foreign funding streams (government agencies, international foundations and trusts), probably as high as 20%, although some grantmakers have mentioned that health; HIV and Aids, Malaria, allocations will remain as promised and could increase. Wealthy countries and affluent people are taking huge losses on their investments such as moneybags Warren Buffet and Bill Gates, and the royals; the Queen of England as well as the Queen of Talk, Oprah. Government will pull back on their spending and become slower in dishing out the dosh so expect a dip of between 8% and 10% in tenders, contract work and grants. Individual philanthropic donors will, as always, remain a constant source although some may have to reduce their annual donations by around 5%, some may even want to stop their debit orders and this is where the biggest challenge remains for fundraisers and that is to encourage a smaller regular amount. Try to increase the number of face to face visits and share news about your work and how the organization is making a difference - get closer to your supporters. All of this will become a huge blow to a number of non-profits between now and August, those who rely on grants and donations for survival, but for those who have established self-generating income projects will definitely find this to be a time for opportunities related to the FIFA World Cup and some other Big Buck international events – perhaps in tourism, crafts, food – so be brave and make a quantum leap and benefit during the 2010 period when we can expect some recovery with an estimated R55 billion flowing into the economy, plan to keep your ‘business’ venture buoyant for at least 5 years. If you have a significant capital campaign in the pipeline (more than R10 million) then allow an extra 2-3 years to reach your goal and extend pledge timelines – plan to secure higher levels of non-financial gifts, prepare a wish list outlining specific needs, e.g. a new Hospice might need 120 beds, a children’s park in a disadvantaged community might want 500 trees, attempt to reduce your anticipated monetary values. A bit of a glow for non-profits but a demon to some is that during lean time’s people turn to games of chance, whilst hoping for a shift in their fortunes – so expect lotto players to increase which in turn will swell the National Lottery Development Trust Fund (NLDTF) coffers. Also some of the SMS competitions, for the benefit of charities, like Winikhaya and St Mary’s Hospital, ‘Swipe Your Card’ campaign, will probably feel some extra buoyancy. Sharpen governance and accountability Impact assessment is not just about numbers but how you can prove that lives have been changed through your work – you might find this to be timely and costly but donors want it, partners expect it and Government demands it so make it part of organizational culture, a habit for gathering-up success stories and writing reports that are engaging, meaningful and insightful. Elections – be heard, be aware Barak Obama’s success to become President of the United States of America has been in parts attributed to new technology – so with over 30 million cell phone users and 11% of the population accessing the internet in South Africa we can expect our political parties to intensify electronic campaigning and also fundraising during this period, the latter will also dilute NPO efforts for much sought after Rands. Technology: In 2002 a report was published by the Global Scenario Group,(Paul Raskin, Tariq Banuri, Gilberto Gallopín, Pablo Gutan, Alhammond, Robert Kates, Rob Swart) , The Promise and Lure of the Times Ahead, wherein it was speculated that the world would experience a financial crisis in 2015, we need to ask ourselves if this is it, did it arrive earlier than expected, or is there another melt-down in the near future – if so, how are we going to prepare ourselves and what do we need to include in our long-term strategies? Be resilient, concentrate on keeping the passion alive within your organisation, remain true to your mission, and expect things to slow down and projects take longer to achieve, think about the future and put plans in place, but you must strive to keep a philanthropic spirit alive in your organisation, remain focused on your Vision and you will survive. In a nutshell:
And when you do feel a bit down, hum, whistle or sing the great lyrics of Bob Marley’s song, ”Don’t Worry, Be Happy”.
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