David La Piana

Without a doubt our nation, and the nonprofit sector that serves it, have both gone through a very tough time over the past couple of years. The crisis brought a barely averted financial collapse, from which Wall Street has recovered quite nicely. Profits are way up, and our biggest bankers seem to have learned – well, nothing actually. The head of Goldman Sachs described the whole near-catastrophe as practically an act of God that mere mortals could neither have foreseen nor prevented.  Regardless, Wall Street is back in the money, big time.

I wish I could say the same for the rest of us. Unemployment is stuck at record levels, which means, among other things, that nonprofit human service providers are stretched to the limit in many parts of the country, with less revenue and many more demands on their services. The nonprofit economy has continued to languish while the financial markets have begun to recover.  Where nonprofits are concerned, unfortunately, there is little hope for a rapid turnaround.

The largest source of income for many nonprofits is state and local government. The recession, while technically over, is still in full swing in most state legislatures. Higher unemployment means both lower tax revenues coming in and more benefits paid out. In places like California, where “dysfunctional” doesn’t begin to describe our pre-recession political system, each budget brings even more draconian cuts.

What can organized philanthropy do about all of this? Foundation funding has in the past been a highly strategic part of the sector’s sustainability.  It needs to play that role again today. Foundations are loathe to “play God,” deciding which nonprofits will live and which will die, but the time has come to place some bets.

As the sector continues to witness the financial collapse of not just marginal performers but important nonprofits, funders can ask “Which groups are too important for us to lose?”  Foundations should identify their top picks, the organizations their communities and fields cannot live without, and invest in strengthening those groups. This does not necessarily mean picking up the tab for government funding cutbacks, but helping these essential groups to rethink their business model, restructure their management and service delivery, and perhaps even join forces with others to withstand the storm.

A few foundations have launched initiatives to help key grantees rethink their models. It is time for the foundation community at large to jump in.

I recently saw two news stories on kids and computers that caused conflicting reactions.

The first was a research study reported in the New York Times last month. It found that American teens basically spend every waking hour when they are not in school either texting, tweeting, surfing, or on their cell phones. They are connected 24/7. And my mom used to complain that I watched too much TV (around 3 hours a night)!

The second article, also from the Times, appeared on February 11. It described a wired school bus in Tucson Arizona. The story claims that boisterous and rowdy kids were tamed by the installation of a wifi connection so they can now do their homework on the way to school.  But I wonder how much time these kids are spending sending emails, surfing the web and otherwise doing their thing, rather than editing History essays or submitting their Biology homework, as the story claims.

So here is the part where I am conflicted. I worry that so much time spent online reduces opportunities for creative thought, friendships in the flesh, and exercise. Is this worry justified or is it just the 21^st century version of my mother’s concern that I was watching too much TV?

The opportunities to access information that teens and even younger kids have today are amazing, and whether they are ready for it or not, it is here. I recently read that a school somewhere was offering an online safety class for kindergarteners. Where does it end? Preschoolers lined up at baby Macs? Newborns lying in their cribs pushing their feet up to touch screen Internet-enabled virtual mobiles?

The most salient fact about all of this is our apparent helplessness to effect any change in our interaction with technology. We are, by mutual agreement, powerless. As soon as some new thing is created, we all flock to use it, whether we know how and why, or not. Will we someday make rational judgments about which technologies to embrace and conscious choices about how we spend our time, or are we simply consumers mesmerized by the next cool thing? And what does all of this mean or society?

Last week, I was slated to fly to New York for a series of client meetings.  Alas, the great Snowageddon of 2010 arrived first and all flights were canceled. Thankfully, and very uncharacteristically, United sent the cancellation email, a day ahead of time. Unprecedented prescience, I say. My daughter Marisa, is at college in Philadelphia, texted pictures of kids using dining hall trays as makeshift sleds, while school was canceled for two blessed days. My client and I rescheduled, and my wife Mary and I headed to Tahoe for a different type of snow experience, and a welcome one. Sometimes Mother Nature calls the shots and all we can do is follow her orders.

The recent blizzards hitting the Eastern parts of our country led to shutdowns of federal operations in and around DC, Baltimore, and other major government centers. Thousands of federal employees were told to stay at home. Hooray, snow day! But wait a minute. Most of these folks, I would bet, have a computer, Internet connection, and telephone in their house. The government should realize natural and other disasters will from time to time make commuting to the megalith office blocks of the bureaucracy impossible, but why can’t most government workers just telecommute?

There are two principal reasons for this obvious solution not being embraced and implemented. The first is culture. An office-based culture finds it hard to define work as anything that can happen outside the four walls of the building. Work is both a job and a place. But large corporations and nonprofits of all sizes have long embraced this cultural change, enabling people to work from home or the road. The government can do it too.

The second reason is technology. Many government departments have old computer systems and high security concerns, which makes logging in remotely difficult, if not impossible. It is time for those system to be upgraded, allowing our public servants to do their work, without necessarily commuting, and even during a blizzard.

Does your organization have a “snowmaggedon” plan that the Feds could learn from?  How would your organization continue to provide vital services in the face of a commuting disaster?

A January 25, 2010 article in the Wall Street Journal caught my attention.  Entitled “Strategic Plans Lose Favor, Slump Showed Bosses Value of Flexibility, Quick Decisions” by Joann S. Lublin and Dana Mattioli, the article describes several big companies’ efforts to find a better way, in the current economic uncertainty, to plan for the future.

Walt Shill, head of the North American practice for Accenture, is quite blunt: “Strategy, as we knew it, is dead. Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future.” Corporate planners are increasingly revising their forecasts monthly, but this too is the wrong solution in my opinion. It consists of continually moving the goal posts. When you first miss your numbers, recast them. Next month, repeat.

It is great to see corporate America, and consulting giants like Accenture, beginning to see the problems with long-term static planning approaches to strategy. We identified similar problems in the nonprofit sector years ago and prescribed a better approach to strategy, our Real-Time Strategic Planning methodology, which was described in The Nonprofit Strategy Revolution in 2008. Sometimes our sector leads the way! In this work we describe an ongoing strategy process designed to anticipate and respond to challenges and opportunities as they emerge.

Times are tough, and especially so for the executive directors or our nation’s nonprofits. Budget woes, increasing demands for both more services and more measurable outcomes, and the ever-greater difficulty of fundraising make what has always been a difficult job so much harder today. That is why I have a suggestion for every nonprofit CEO in America: get yourself a dog. Whether it is a big, romping, home-wrecker of a lab or golden retriever, an ever-watchful and protective German Shepherd, or one of a wide variety of teeny, tiny little miniature dogs, “purse dogs” they are often called, a well-selected, well-matched, well-trained dog will do several things for you.

First, no matter how miserable or long your day, when you come home your dog will make you feel like you just won the Nobel Prize. You just can’t beat a dog’s perennial happy-to-see-you attitude. It is a lot more predictable than that of your family members, especially if your family includes teenagers.

Second, no matter how tired you are, you will have to go for a walk. A small dog may only require a five minute stroll, but a big, energetic playmate says “grab the ball, dude, we’re going to the park!” So you’ll get some exercise – every day, rain or shine, layoffs or budget battles.

Third, there are few problems you will face that can’t be made better by having your dog under your desk while you face them. At La Piana Consulting every day is take a dog to work day. In fact, when Cody was a puppy, he would snooze on my lap while I wrote emails. Then he started snoozing at my feet, which was great except for the time he ate one of my shoelaces right off of my shoe. But that puppy time passes, and now he either lays at my feet while I work, reminding me every few hours that we both need a ball-throwing break, or he sits in my reading chair with me, head on my lap, reminding me that the world could be so much worse off without a dog.

I recently read a fascinating article in Foreign Affairs by Jack A. Goldstone in which he argues that we do not today have a world overpopulation problem but rather a population imbalance. For example, about 90% of the children under age 15 worldwide live in the developing world. Also, 2010 is the first time in history that the majority of the world’s population lives in cities rather than the countryside, concentrating their poverty.

What does this mean for the future? Fast-forward twenty years and 90% of the world’s 25-35 year olds will be living in the developing world, during their most productive years. Unless things change, we are going to have a lot of aging people in Europe, Japan and the U.S. sitting on their money with no one to do the work of our society, while the developing world will be filled with young potential workers without jobs.

In this light our current immigration debate in the U.S. is completely misguided. We are going to need more immigrants from the developed world to perform essential functions and we better figure that out soon.

Perhaps Goldstone’s most intriguing observation is that we in the developing world need to consider retiring to nice, sunny, low-cost spots in the developing world, such as the Mediterranean, Mexico, Turkey and Southeast Asia. Doing so will stretch our retirement dollars and provide jobs locally. It will also force developing countries to build a better health infrastructure, which will in turn incentivize local physicians so stay, rather than emigrating to the developed world, thus raising the quality of medical care generally. I’m in! Retiring to the coast of Turkey or Mexico sounds pretty great to me.

In the meantime, we continue to work with nonprofit clients to help identify how these trends will impact the future of their organizations and the nonprofit sector as a whole.

The stock market finished 2009 up for the year, way up. Unemployment showed signs of moderating if not yet improving, if 10% can be called “moderate.” Yet the sources most commonly found in nonprofit budgets – state and local government, individual donors, and foundations, are all still pinched.

In fact from Hawaii to California to New York, and even small Nevada, state budgets are more than pinched, they are strangled. In Hawaii the state’s schools are closing 3 days a month. California’s UC system  is furloughing everyone from professors to janitors. In fact Berkeley normally hires around 60 new professors a year; this year it is 10.

The bottom line is the recession is over but that makes no difference to the 11 million people who have lost their jobs. Many of them are relying increasingly on nonprofits, especially after their unemployment runs out.  My new year’s predictions are almost too grim to recount: more nonprofits failing, more layoffs and service cuts, continued self-serving conservatism by most foundations, when now is the time to increase their payouts, as a few brave leaders have done.  So, 2010 will be another tough year for nonprofits, perhaps worse than last.

I have served on the board of Craigslist Foundation for two years and at our recent December meeting I was honored to be selected by my colleagues as Chairman.

I will be joined by Jose Cisneros, the Treasurer of the City and County of San Francisco, as our board’s very able Treasurer, and Kathy Bella, Principal of the Bella Group and expert on just about everything related to nonprofit causes, as Secretary. We also welcome a new board member this year, Rich Moran, an Executive in Residence at Venrock, a venture capital firm in Palo Alto.

Under the outstanding leadership of Lynn Luckow, our President and CEO, and aided by the Craigslist Foundation’s small but energetic staff, we hope to do great things in the coming year.

So save the date for the next Craigslist Foundation Boot Camp on August 14, 2010 at the University of California campus in  Berkeley, CA.   I look forward to seeing you there!

Our new research initiative NonprofitNext and recently published monograph Convergence: How Five Trends Will Reshape the Social Sector has inspired a lot of talk about how to prepare for a future.

We are clear that the trends we study will have a profound impact on the sector’s work but we don’t know how they will evolve, interact, and respond to other economic, social and political developments. What can a thoughtful leader do in this constantly changing landscape?

One thing is certain: traditional strategic planning with its 3-5 year timeframe is not up to muster in this dynamic environment. That’s why we created Real-Time Strategic Planning to create an atmosphere where futurists can flourish.