RE: Nonprofit Mismanagement: Financial Literacy Does Not Equate to Good Financial Leadership
"If you can identify your problems but do nothing to rectify them, you didn’t want your nonprofit to survive."
Well, I think maybe there's something else in play here, an acceptance that the situation may, in fact, be dismal with no way out. No money. No big new ideas. Same old leadership. I've seen that kind of thinking embedded in the culture of cultural institutions going back decades.
Once upon a time, I even heard that one board leader said that if they couldn't afford a 1st class solution, well, then, they'd just have to go with a 2nd class solution... But that board member would say that being 2nd class (or maybe even 3rd) was better than going under. That being institutionally comatose was, in fact, an option. And I think we can find examples of this in our community.
I see what you're saying (and I can think of a couple of examples!) Do you think it would it be fairer to characterize inertia like this as a choice that (directly or indirectly) positions board/staff member wishes not to try to shake things up ahead of the needs or priorities of the constituency the nonprofit is intended to serve? Would that be too reductive?
I think that's very fair to say. You might even go so far as to suggest that the very institutions created to address problems sometimes spend time and money in self preservation. And boards justify that action as "fiduciary responsibility."
But other times that isn't the case and the nonprofit system works like a charm.
What the difference between the two? The right amount of vision, leadership, capacity and - most important of all - the right amount of money.
On the subject of inertia, I think this is also a point where we can elaborate further on what we briefly touched on in class - that in the life cycle of a non-profit there is also a time where it is appropriate to pull the metaphorical plug. My mentality is that after spinning your wheels for so long, when do you make that choice to pull out, and what choices do you make before hand?
I think one option to consider, if the non-profit wants to continue on in a way similar to their original model, is to consider fusing with another non-profit whose mission and constituency is akin to their own. We discussed in class how there are so so many nonprofits in Philadelphia's cultural sector. If there are two with similar missions and constituencies, and they're struggling, why not consider joining forces and growing together instead of dwindling away independently? I'd be interested in your thoughts on this.
Only if the merged, weak institutions can offer mission and programs that make a compelling case for new and greater support. Rather than two weak and similar institutions joining up hoping to maybe thrive, better results might be had by aligning or merging with a stronger partner from a related field with some overlapping characteristics in mission and program. But we should talk about the risks in that scenario, too.