Lessons from the near collapse of a small NGO

Cate Steane runs a small Californian not-for-profit providing shelter for families between homelessness and a home. Twelve months ago the agency faced collapse as government funding and donations dried up, and its invested reserves disappeared during the financial crises. The agency had to confront the reality that it had run out of money and would have to close its doors. Twelve months on the agency faces a brighter and more secure future.

This situation is very familiar to many small and medium sized NGO's in Australia, for whom viability is a monthly, even weekly proposition.

On the US not-for-profit website Blue Avocado Cate has written an important piece about the strategy the agency pursued to keep the doors open.

Reading Cate's intelligent and honest piece about what not-for profits can do when facing such a crises, and drawing on my experience with small agencies, ten lessons emerge:

1. Act quickly, don't accept denial of the problems and be completely transparent and frank with all stakeholders about the depth of the crises of and what is needed to overcome it (this includes beneficiaries and service users, funders, politicians, donors). Take all stakeholders along on the difficult journey
   
2. Withhold nothing from staff and Board and make use of the diversity of opinion about how to move forward (even when management is doubtful) and acknowledge and work with the negatives.
   
3. Develop a brief Plan (and clear message) of how the agency intends to overcome the crises
4. Mobilise and act in service of the agency's core social mission which is to address social problems and meet social needs. Ensure that the social/community need that the agency exists to address is not compromised
5. Be clear about what and who the agency is there for and what has to be preserved
   
6. Explore all possible angles, including new and better ways to make use of government funding and new sources of funding and be prepared for scenarios that cannot be foreseen in the beginning
7. Keep well informed about the policy context in terms of how these may affect the agency's survival and possible opportunities
   
8. Raise funds through the agency's network of supporters and constituents who understand and support the agency's mission and values, regardless of the size of their donations (don't just pursue big donors). Corporate funding and donors is not a high priority.
   
9. Build and protect the agency's reputation for excellent services, frugal stewardship and scrupulous honesty
10. Develop and retain a strong constituency base and appeal to them to assist in a multitude of ways