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Welcome To The ‘new Normal’

Welcome to the ‘new normal’

Lawrence Storey, Board member, shares his field notes for not-for-profits operating in a post-COVID 19 world.

As New Zealand emerges out of isolation, organisations are increasingly shifting their focus towards the future. However, as they take their first tentative steps into this ‘new normal’, many are facing economic, social and operational challenges on a scale unimaginable only months ago.

While some may be tempted to default to the tried and true, and resisting the need to adapt, those open to proactively rethinking and reframing their approach are those most likely to remain relevant and ultimately prosper.

Just as private enterprises have had to adopt innovative approaches to survive, many not-for-profit organisations have needed to rethink how they can continue to effectively serve the community in the midst of a global pandemic. Initiatives like virtual individual and group support services, online training resources and information portals have enabled not-for-profit organisations to continue to support community members from a distance.

While the socio-economic implications of the pandemic – including economic hardship, unemployment and social distancing – may trigger an unprecedented drop in demand for those goods and services offered by private enterprises, the opposite will likely be true for those operating in the not-for-profit space. Demand for community support services and expertise can be expected to increase exponentially in the coming weeks, months and years, placing significant strain on the sector.

Despite this increase in demand for support services, it is likely that many not-for-profit organisations will experience financial challenges over this period, as traditional funding streams such as public sector funding and community donations begin to dry up and competition for what remains intensifies.

The same innovative thinking that has enabled not-for-profit organisations to successfully pivot their operating model will also need to be applied to securing adequate funding to continue to effectively support communities in the weeks and months ahead. Unfortunately, given the diversity and differing complexity of organisations operating in the not-for-profit space, no one ‘silver bullet’ approach exists. What follows, however, is a set of high-level considerations to assist those interested in reviewing and rethinking their approach to funding in the ‘new normal’.

  • Investigate financial support options | Not-for-profit organisations should investigate whether they are eligible to apply for the wage subsidy scheme, while this may not cover all costs, it can help to soften the blow
  • Collaborate | Working with and learning from organisations operating within and outside of the sector may prove invaluable. Collaborating to overcome common challenges is likely to expedite the problem-solving process and ultimately result in a superior outcome
  • Make a plan | While the longer-term implications of the pandemic remain unclear, we are slowly gaining greater clarity over the short to medium-term future. Stepping back and reevaluating existing planning, based on a set of underlying assumptions or scenarios, is an important step to regaining some sense of control over where you want to go and what you will need to get there. As a living, breathing document, this can be revisited as an when things change (and they will)
  • Diversify funding | Relying too heavily on one form of funding, be it from the public sector, general public or commercial partners, places an organisation at undue risk. As witnessed, things can change overnight on both a micro and a macro scale, with overly dependent organisations subject to the rug being pulled out from under them. While potentially more challenging to establish and maintain, diverse funding lines are important to an organisation’s long term financial sustainability
  • Innovative funding methods | Not-for-profit organisations are increasingly exploring opportunities to generate income to complement, and potentially supersede, traditional channels. Virtual funding or crowdfunding is gaining in popularity, providing external parties with the opportunity to donate and invest in primarily project-based ventures. As with commercial partnerships, increasing competition for funding means that organisations will need to be increasingly innovative in how they engage, communicate and inspire potential supporters.
    Some other organisations are aiming to partially underwrite their services by selling branded merchandise and other items. While there is some financial risk associated with this approach, if done properly it can be an effective means to augment traditional funding streams, while concurrently enhancing organisational awareness, engagement and ultimately, brand value.
  • Commercial partnerships | Many not-for-profit organisations have become increasingly savvy in the commercial partnership space in recent years, both in increasing brand awareness and appeal and directly contributing to their bottom line. While some private enterprises may be hesitant to heavily invest in promotional activities in the current environment, intense competition for limited discretionary spend means that others are likely to be actively seeking ways to stand out, such as partnering with a relevant cause.
    When exploring commercial partnerships opportunities, it is critical that an organisation has a clear understanding of identity and value to a partner. While some private enterprises may prefer a simple sponsorship arrangement aligned to media profile and reach, others may be open to a more collaborative partnership based on shared values and common objectives. In addition to financial investment, not-for-profit organisations may also explore opportunities for relevant cost relief (e.g. supply of product).
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