Operating a Nonprofit (Focused on Vulnerable Populations) Successfully in a COVID Impacted World — A Brief Guide for Boards and CEO’s
Covid19 has already had a massive impact on the world in many ways but disproportionately on so-called ‘vulnerable’ people and groups. Just to be clear a ‘vulnerable population’ is any group or community that is at higher risk of experiencing greater barriers or problems than most people in terms of social, economic, political, legal, technological and environmental resources, or because of limitations they face due to illness or disability. The chart below provides an example list of such groups in the US, (some of which overlap, of course) many of which are quite large in total numbers in the affected population.
Despite their ubiquity (and there are many others apart from the above) most vulnerable populations have one or many nonprofits focused on helping or supporting people in the particular community. This typically means such nonprofits will work hard to understand the needs of the population, advocate for particular people in the group (and the community itself) and often aim to find and raise money to render direct services that they need most. Because the specific programs offered will vary greatly by population, for the rest of this article, I will focus on one with which I am most familiar to illustrate-the senior population (No 3 on this list).
‘Seniors’ are regarded as any individual of 65 and older in the US, but according to the Older Americans Act (OAA), signed into law in 1965, this envelopes all people of 60 or older, which swells this population to 65 million people in 2020 (but growing to 90 million by 2050). The OAA funds services that keep older adults healthy and supports independent services like meals (such as ‘Meals on Wheels’), training, senior centers, health promotion, benefits enrollment, caregiver support, transportation, protection from elder abuse, etc. The cost to the taxpayer is a little over $2 billion each year. This is a small budget compared to other older-adult focused budgets (such as the estimated $75 billion spent on this population by Medicaid, for example). However, it is ‘trickle-down’ federal money to States and Cities and to the majority of the nearly 8,000 adult daycare centers around the country, which often provide a range of services in what might be the only meal of the day for many of their 11 million unique visitors collectively.
If you are a nonprofit, focused on this older-adult space, you are likely to have relied heavily on contract funding with a local City or County to gain access to funds such as those above, but as these are rarely enough to cover costs completely, this needs to be supplemented by grant applications to foundations, contributions by ‘corporate’ and small organizations, and individual gifts and other donations, as and when they can be found. This model should sound familiar to most nonprofits and, given that they are well run and governed, has been a successful pathway for surviving and even thriving for years. Unfortunately, COVID has changed all this, and I’ll spend the rest of this article explaining why and what this means for the future.
We are all aware that federal funding ‘freezes’ and cuts to national programs have become commonplace in recent years and COVID has only increased this pressure in the short, medium, and long-term. In the older adult space, not only has this meant funds like OAA have lagged inflation but they have also hugely lagged population growth, which, in the older adult population, has grown significantly as the ‘boomer’ population has retired and people are living much longer. Even more pressure is added by a 30% increase in the 60+ population between now and 2050. To this we have to add the funding squeezes that COVID has and will continue to apply to States, Counties and Cities, as their economic strength has been weakened by lower property taxes and much lower sales taxes (with consumer spending likely to be considerably lower). In the senior nonprofit space, this means that contracts will be smaller, foundations will have to spread grant awards more ‘thinly’ and both corporate and individual giving has and will diminish. This means that this old ‘model’ for nonprofit performance will be extremely difficult to sustain and we, therefore, have to evolve a whole new approach if such nonprofits are to survive. So, let’s now look at what nonprofit boards and CEO’s/Executive Director might think about and do in the face of these challenges and this pressure going forward?
Vulnerable populations don’t ‘disappear’ because there are funding cuts -in fact, most are likely to grow in size and needs and over time when less money is spent, creating a range of ‘knock-on’ effects that society has to face up to sooner or later. For example, reducing group or congregate meal opportunities often leads to increased mental and physical health problems, which cost the healthcare system many more dollars than they were spending before. I’d therefore suggest that the ‘mindset shift’ that needs to take place is in the vision for supporting or helping and the funding mechanisms that should then be sought. Let’s look carefully then at these two concepts -the nonprofit ‘vision’ and ‘funding mechanisms’.
The word ‘mission’ is thrown around a lot in many nonprofits but not so much the vision. The vision is not about what the nonprofit does day-to-day and month-to-month, but what it is trying to achieve in the medium to long term and in the most tangible or result-oriented ways possible. One definition of vision that I like is that it is “the capacity to think about or plan the future with imagination or wisdom.” This then is the first task as any nonprofit tries to look to the future and ask the questions:
1. What do we want to achieve?
2. How will we know when we get there?
3. What will be required any way of new and imaginative approaches to get there?
4. Who is likely to join us in supporting this vision (Governments, Foundations, Corporates, Others)?
5. Who should we have on board as employees, board, other partners etc.) to give us the best chance of succeeding?
None of these are easy questions and need considerable time and concentration to address with as much collective wisdom as can be drawn together to focus on them. This usually means also bringing in people with different perspectives and a background in critical thinking and innovation to ensure that the nonprofit does not get too mired in the existing ways of doing things or becomes prone to think about only what it is familiar with historically (or simply avoids becoming ‘overwhelmed’ by the enormity of the possible change or transition ahead).
Like Vision, ‘Funding mechanisms’ should be thought about in new and imaginative ways (and naturally tied to the vision that is to be achieved). This is not to say that the sources of funding are completely different to the usual nonprofit ‘go-to’ suspects, but that the particular ones may shift a little and that the message about ‘why’ to fund is likely to change substantially.
What this means in practice is 2 things:
A) Nonprofits should look to particular government entities or departments, foundations, corporates, businesses, agencies, and even individuals that or are likely to be well-aligned to the new vision. These may not be the same as the old funding sources and many completely new ones will need to be found and these relationships built.
B) Nonprofits need to talk not so much in expense funding or program cost coverage terms but in ‘value-creating’ terms. In other words, nonprofits need to find creative ways to explain why their programs will add tangible value to senior lives (in so-called ‘soft’ and ‘hard’ ways). This entails not only that every program acts to save time, effort or money (or makes money) but also advances the nonprofit specifically towards its vision.
Let’s briefly look at what this could look like, at least theoretically, in the ‘seniors’ space, and perhaps for a single adult daycare center nonprofit facing similar challenges to those above.
In a big change from its social side case management, congregate meal provision, group activities and transport programs of the past, this nonprofit decides that it needs to focus on finding and developing cost effective or affordable housing to allow its client population to successfully age-in-place without fear of losing the roof over their head, and to provide an e-commerce enabled healthy meal delivery service every day.
They decide that their new vision will be “To provide 1,000 new affordable and fully tech-enabled’ living units for low-income seniors in the next 5 years within the City of XXX”.
This transition requires a wholly new relationship with government departments and agencies that support and need help with affordable housing at City, County and State level and new relationships with both foundations and corporates and businesses who can partner with the nonprofit to render healthy meals, ordered on an e-commerce enabled basis. This includes evolving completely new relationships with national technology giants and their philanthropic arms. This nonprofit decides that it needs to work with all of its existing stakeholders to communicate and manage the transition over a 2-year period and identifies new people that need to be brought into the organization at staff, volunteer, board and partner level.
I realize that this is a dramatic shift for this particular, albeit fictional, nonprofit, but my goal in using this example is simply to illustrate that major changes such as this may be what the older-adult clients in this situation are deemed to most need, and the path to get there may be much more fundable and even sustainable. In fact, this example is loosely based on a real nonprofit organization. One small and challenged nonprofit in the US North-east, made a change very like this. In this case, although they lost around half of their old OAA funding (because they eliminated congregate meals), they created new relationships with both a State-based affordable housing foundation and a very big national software company which offered a 5-year funding grant to help build the online food ordering and delivery system. The City also helped find and zone/permit new land to help develop these units. This helped this nonprofit to make a successful transition, grow agency staff, achieve their vison in just 4 years (and set new ‘stretch goals’) and treble their annual revenue within 5 years!
To summarize, many nonprofits have been hit hard by COVID19 and may face even more difficult times to come with funding cuts coming from many of their existing sources. Although one coping strategy is to scale back operations, and reduce the scope and scale of services provided, the vulnerable populations they often serve need them even more than ever. A small or potential very large ‘pivot’ or transition may therefore be a much more positive and impactful strategy in the medium to long-term.
Planning such a big change always needs widespread collective leadership and concentration by nonprofit boards and CEO’s and a clear focus on what the new vison should be and where new or different but vison-aligned funding sources could and should come from. Finally, nonprofits should ensure that their communication language is on demonstrating the tangible value they will add-directly and indirectly when any future stakeholder engages with them.
Jon Warner is CEO of Silver Moonshots-www.SilverMoonshots.org, a research and support organization for enterprises interested in the 50+ older adult markets with its own aging focused virtual accelerator. He is also Chapter Ambassador for Aging 2.0 and on the Board of St Barnabas Senior Services (SBSS), in Los Angeles, California.