Converting Proactive Thought to Proactive Action

Writing this column is surprisingly similar to posting on social media, which is not something I anticipated when I started doing this late last year. I routinely get responses and reactions from people. Thank you for that. Many of these responses are akin to getting a “like” on a social media post. Some request additional engagement on the topic of the column or even something completely unrelated to the column. A few suggest topics for future columns. Overall, it’s been a positive experience and more interactive than I expected. Again, thank you!

Why wax poetic about the process? Well, the interactive communication from recent months lines up consistently with some of the more common topics of discussion among not-for-profit leaders in general. I’m referring to topics that are transitioning to be more than topics of mere discussion; they are often now topics of action, where organizations are actively doing things differently based on their observations and perceptions about what is going on right now. The pace at which these strategic discussions are being converted to actionable items is accelerating.

Here are a few of the common themes that are now being actively addressed in not-for-profit organizations, and that every organization should give some thought:

Board and leadership attitude – There are lots of questions and comments about “getting back to normal” lately. It’s important to understand what people mean by this idea of getting back to normal, because perceptions and attitudes vary greatly. To the extent people in your leadership group/ governing board refer to “normal” but mean different things with that term, you will be best served by identifying and addressing those differences.

People seem to fall into three groups when it comes to this consideration of what normal means right now and going forward:

1. People who think of “normal” as what things looked like in 2019 (pre-COVID),
2. People who think of “normal” as what things look like now, more-or-less (some might refer to this as post-COVID), and
3. People who think of “normal” as a state yet to be defined but for which the organization can and should proactively help establish the definition.

At a high level, the idea that your organization is going to get back to how things were in 2019 is an unlikely path forward. Funders, donors, those who your organization serves, and your employees are simply not at the same place as they were in 2019. Even if you ignore COVID itself, the effects of inflation, interest rates, the job market, demographic trends in New York State, the New York State budget, and numerous other factors are simply not the same as they were three years ago. If your organization’s discussions regarding the path forward are centered around getting back to how things were in 2019, rethinking those expectations is worthwhile.

The idea that we’re past COVID and have arrived at our “new normal” is also difficult to support. Many organizations have experienced two years of notable understaffing, material COVID relief funding, unusually positive investment portfolio performance, altered donor behavior (whether a positive or negative varies from organization to organization) and sometimes drastic changes in how you get things done. Remaining flexible given the idea that there will be no additional COVID relief funds going forward, reliance on investment returns and predictable donor behavior is much less certain now, and that the organization will continue to have to react to how your current and future employees may like or dislike how you get things done, is critical. While there is a certain level of comfort in reflecting on all the disruption over the last two years and believing that we’re past all of that, that may not be the reality. Change and disruption continue and are still major factors in the path forward.

So that leaves the group who believes “normal” is still evolving and that the organization can help determine what normal is going forward. Has your organization discussed not just what you expect normal to be but what you want normal to be? Does your leadership express a belief that the organization can proactively help determine what normal is going forward, or is the discussion focused on a more reactive path forward?

Being proactive requires energy and time, two commodities that are not necessarily easy to come by given all of the other priorities right now. Very few people are seeking out things to add to their “to do” lists. However, taking a primarily reactive approach leaves your organization, to some extent, at the mercy of outside forces. Obviously, there are things you can’t control.  But taking a position that effectively assumes that you can’t influence much of anything is a bit fatalistic.

I invite you to take a moment to evaluate your own organization in the context of this idea of determining what your organization’s new normal will be.

Staffing and recruiting practices – Many not-for-profits have effectively transitioned their recruiting and hiring practices to a state of continual action, particularly as they relate to front-line and direct service positions. The days of a position opening up, being posted, conducting multi-layer interviews and conducting screening and ultimately a making the hire are gone. Many organizations are continuously looking for and on-boarding new staff for these positions just to be able to continue providing services.

Most recently, organizations are taking the same approach to administrative and “behind the scenes” positions. The volume of work in human resources, accounting, information technology, marketing, fundraising, and other administrative positions has only increased, and the availability of qualified people with the skill sets to fill these positions has only shrunk.

Historically, organizations have tried to operate these functional areas in as lean a manner as possible in order to maintain a low administrative cost percentage. More recent prevailing thoughts are that the administrative costs of turnover, extended absences, and continuous recruiting, on-boarding, and training efforts are greater than the costs of being slightly overstaffed in administrative areas. In short, many organizations are finding that it’s a better allocation of the organization’s resources to be staffed heavier in administrative areas than to continuously deal with the periods of vacancy that occur all too often in recent times as well as incur the costs to find and on-board people in these administrative positions. Recruiting and hiring for administrative positions on a “pre-need” basis can be uncomfortable for some people. But hiring for a position after that position is already vacant has become an equal or even more expensive and uncomfortable experience.

This “overhiring” practice may seem counterintuitive right now – with the job market so tight finding and hiring the right person can be especially difficult. Focus more on keeping your eyes open, and when you do see a person in these functional areas who is a good fit for your organization, bring that person on board even if you don’t have a specific open position at this moment. An added benefit is that an adequately or amply staffed administrative team can be and is a selling point to other candidates since it speaks positively to what an employee’s overall experience will be in your office.

Automation – The idea that there is a software solution that could make your organization’s operation more efficient, reduce errors, improve documentation, and lessen the clerical and administrative burden on your people is not new.  Such software tools have existed for many years for many typical functions. But there is often a hefty price tag for such tools, accompanied by the sense that the way you do it now isn’t so bad.  It was often difficult to justify the upfront cost.

The COVID disruption pushed many organizations to reconsider the pros and cons of automating day-to-day functions. Processes that called for physical pieces of paper to be shuffled from one person to another proved to be no longer workable with so many people all working from home. It seemed silly to create paper records related to patient services that were being provided via telehealth. The value proposition of automated processes simply made the upfront implementation costs more palatable under these conditions.

The case for automation has been bolstered by the challenges to find and retain people. To the extent that automation makes your employees’ experience better, the case to make the investment in automation is that much easier to support. Also, don’t discount the effect that other providers’ automation efforts have.  If other organizations, with whom you are competing for people, have effectively automated tasks that you are still doing manually, you may have become a less desirable place to work.

Jeff Paille is a CPA and partner at the Bonadio Group and has consulted with tax-exempt organizations for almost 30 years.