Beyond Belt Tightening Part 2, Return to Mission & Values

Mission and values, when applied properly, become key ingredients for nonprofits’ attaining financial success, whether in an emergency like Covid-19 or not. Austin-based finance and operations consultant for nonprofits Sean Hale presents the second in his 3-part series on the habits that nonprofits can use to address financial challenges now.

“You never want a serious crisis to go to waste. And what I mean by that is it’s an opportunity to do things that you could not before.” – Rahm Emanuel. Yes, this is a blog about saving money and finding efficiencies. I promise.

It turns out that mission and values, when applied properly, become key ingredients in a nonprofit’s financial success A return to vision, mission and values helps to clarify, for everyone, which things truly sit at the organization’s heart and center. Those things that are secondary, “nice to have,” or even distractions also become clear. Thus, using the mission and values as the foundation makes it easier to rally stakeholders around an otherwise difficult (if not paralyzing) decision.

For example …
A few years back, I got to know the board and staff of a nonprofit led by a charismatic founder.

One day, a new finance director joined the organization. Within the first month on the job, he discovered that the organization would run out of money in just a few weeks! The founder’s habits of spontaneously starting new programs and making major purchases outside the budget without the board’s permission had contributed significantly to this situation.
The board had always shown extreme deference to the founder. They had always treated him like a close friend, not an employee who they needed to hold accountable.

Faced with bankruptcy, the board took steps to not just resolve the immediate crisis but also put structures in place to avoid a replay of this chain of events. The board demanded, and achieved, strong mission clarity. They achieved increased organizational focus and understanding of the change they wanted to create. This brought an end to new spontaneous programs while others got consolidated, spun out, or sun-setted. They ultimately transitioned from between 7 and 10 loosely aligned programs to just 4. Rather than constantly scrambling to respond to crises and opportunities, staff and the founder found the focus necessary to achieve longer-term stability and to really scale their best programs.

With several individuals having to provide bridge loans to ensure the organization’s survival, the board and finance director also implemented strong financial policies and procedures so that the organization would never find itself in the same position.

All these changes represented basic best practices. Not rocket science. However, as long as the founder kept the organization solvent and “successful” while flying by the seat of his pants, nobody wanted to mess with the “secret sauce.” It took a crisis, plus a skilled finance director and determined board, to implement a strong mission filter.

If you would like more examples of how nonprofits have returned to their mission and values, in the face of crisis, to get to a position of financial strength? Check out this portion of my April 2, 2020 webinar.

So, what new habit do we need to practice?
Bring in the mission and values for all decisions. All decisions, not just the big ones or during a crisis, can use them as a filter. That’s how you make it a habit and maintain your focus. This way, when difficult decisions inevitably need to be made, you already have the habit in place and everyone has already bought into that as a part of the way your organization works.

For example, if your organization with a mission to “shelter and feed the homeless” can’t afford to continue all its programs right now, your mission and values should form part of the decision-making process. The four program areas, food, shelter, job training, and advocacy might have equal levels of impact, success, and financial viability. The mission filter, however, helps clarify which two programs are core and should probably receive more priority right now.

You can even run mundane business decisions, like where to buy office supplies, through this filter. An organization that serves marginalized communities, for example, can take the time to seek vendors from those marginalized communities instead of defaulting to a big box corporation.

And, for goodness sake, don’t let a crisis go to waste. In addition to responding to the crisis itself, implement changes that will make the organization stronger and leave it less vulnerable to similar crises in the future. You’ll never have more buy-in and support for those big changes than during the emergency. Covid-19 qualifies as the biggest national emergency since WWII. Make the most of it!

Pro Tip #1: How to tell if you have a mission and values worth leaning on

Even the best-crafted missions have an expiration date.

You probably have a fresh, strong mission if:

  • A critical mass of your stakeholders participated in crafting it (including beneficiaries, board, and staff)
  • Your staff, board, and others regularly quote it word-for-word
  • It appears prominently in key areas like the front page of your website and office walls

Your mission probably needs a refresh if:

  • Few of your current stakeholders helped to create it
  • Very few people can quote it word-for-word
  • It got filed away in a binder somewhere

Pro Tip #2: No DIY missions, please

Don’t do like a leader with whom I once worked did. He came into the organization one day and told everyone, “you wanted a mission so I created one for you this weekend.” Even though it was well-written and well-intentioned, this mission imposed from above didn’t resonate with the stakeholders because they hadn’t been involved in creating it. Not completely coincidentally, this leader lost his job a few months later.

Similarly, you can’t be a prophet in your own home. In other words, even someone who has won prizes for their awesome facilitation and strategic planning skills cannot lead the process to refresh mission and values if they’re also a stakeholder. I love saving money, but this kind of approach is penny wise and pound foolish.

Your next steps
Are you ready to make sure your mission and values guide your nonprofit through these challenging times? Here are some questions to help you build the new habits to get you there:

  • Do we have mission and values strong enough to lean on right now? If not, start lining things up so that after we get through the biggest part of this emergency you can initiate the refresh process.
  • If it could mean thousands of dollars in savings, and improved long-term organizational health, would it be worth a little extra effort right now? Your answers will help rally others to this cause.
  • Who can I partner with inside our organization? Being a lone ranger is no fun and often gets inferior results. Which board members, staff leaders, and key stakeholders can help you weave mission and values into key decisions?
  • Who else? Who else might help me gain perspective on how to apply mission and values in my organization? People inside my current network? People outside my current network?

Coming soon: more habits to help your nonprofit move beyond belt-tightening: “using the right tool for the right job.”

Sean’s next and final blog will discuss more habits to help your nonprofit move beyond belt-tightening: “using the right tool for the right job.”

Sean Hale, of Sean Hale Consulting, has served nonprofits for more than twenty years. Most recently, as Mission Capital’s Chief Financial & Operations Officer, he made improvements that reduced waste, generated new revenue, boosted staff productivity and morale, grew financial transparency, and shrank risk. Over his career, he’s also helped boards and management to navigate complex situations and consistently left the organizations stronger and ready for their next stage of growth.

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