NON-PROFIT ORGANIZATIONS NEED A WARTIME CONSIGLIERE.

GODFATHER

As we struggle to survive the Covid-19 Apocalypse, individuals, non-profits, organizations and corporations must come to grips with harsh new realities. The world is forever changed. Covid-19 has brought the world’s economy to the brink of disaster. Employee lay-offs are massive. Unemployment claims continue to spike to record levels. Budgets have been cut. The Federal Deficit has risen to unprecedented levels.

One research firm released an analysis estimating that Disney could lose as much as $3.4 billion domestically alone as a result of Covid-19.

The National Basketball Association is expecting a loss of league gate revenue of between $350 – $400 million. And that is just from the cancellation of their regular season.

Our colleges and universities are also being financially devastated by Covid-19. The University of Florida recently reported an estimated loss of $33 million for the spring and summer of 2020 alone. After the financial crisis of 2008, Harvard’s endowment lost 30% of its value. Harvard’s current endowment is the largest of all United States’ universities standing at approximately $40.9 billion. Analysts are projecting a loss equal to or exceeding that 30% as a result of Covid-19.

Both Google and Facebook are projected to lose $44 billion in advertising revenue in 2020.

Unquestionably, non-profit organizations, foundations and entities relying on public or private funding are going to be severely impacted. Many will not survive. This reality began even before Covid-19 became a global catastrophe.

Changes in the Tax Cut and Jobs Act of 2017 while not generally aimed at charitable deductions, reduced the scope of the tax benefit for charitable giving. A higher standard deduction and the limit on the deduction for state and local taxes caused more individuals to take the standard deduction, as opposed to itemizing deductions. As a result, many individuals who were able to deduct charitable contributions no longer claim this itemized deduction. Other changes exempted more estates from the estate tax thereby eliminating the benefit of deducting charitable contributions in those instances.  The Tax Policy Center estimated that overall charitable giving will decline between $12 to $20 billion annually.

And yet, people worldwide tend to embrace their charitable heart in the face of catastrophes. According to the Chronicle of Philanthropy, a Washington-based news agency that tracks institutional charities like the American Red Cross, after the terrorist attacks on 9/11, Americans donated a record-breaking $2.8 billion to help the victims of the worst terrorist attack on U.S. soil.

Americans also donated nearly $2 billion to victims of the gargantuan tsunami that slammed into Indonesia and other parts of the South Pacific in 2004, killing more than 180,000 people. 

After Hurricane Katrina devastated Louisiana, Mississippi and other states, killing 1,723 people in what the Federal Emergency Management Agency called “the single most catastrophic natural disaster in U.S. history,” Americans donated $5.3 billion to the victims of Katrina, according to the Chronicle.

In 2010, United States donors gave nearly $1.5 billion to victims of the apocalyptic earthquake that devastated Haiti, annihilating much of Port-au-Prince and killing more than 300,000 people.

But, Covid-19 is different. Covid-19 was the “perfect storm” which changed all aspects of our world. Life and Death. Financial. Humanitarian. A global epidemic. This will have a huge impact on non-profit organizations. Indeed, the manner in which non-profit organizations, foundations and entities have traditionally operated is now buried in the past.

Non-profit organizations must evolve and creatively stay ahead of this new reality. Many corporations, wealthy individuals and investors which previously invested in the non-profit sector no longer have the financial luxury or means to sustain their past levels of support. The non-profit sector must understand this reality and find alternative avenues of relevance. Or they face oblivion. And many will sink into the abyss.

In the movie, “The Godfather,” anticipating that the five (5), feuding Italian crime families would be going to war, Michael, the Don of the Corleone Family, removed Tom Hagen as the family’s consigliere (“trusted advisor.”) He knew that the Family needed a “wartime consigliere.”  A wartime consigliere is a senior advisor  with the cunning, wit and intellect needed to defeat an enemy during times of open conflict. Unconstrained by the caution and deliberation called for during regular business order, a wartime consigliere acts and plots creatively, perhaps in unorthodox and unexpected ways but understands that the rules and the world have changed. And in order to preserve what is important, he must adapt and stay ahead of the new world order.

So too, each organization must conduct a thorough self-evaluation and determine if their President, CEO or perceived leader is up to the task of leading that organization into the next decade. Do they possess the skill, experience, intellect, bravado and courage to find the new paths which lay in the future and then be able to guide the organization onto this path and to a place of success? Does your leader understand the reality that non-profit organizations can no longer simply approach financial supporters hat-in-hand and ask for donations as they did in the past?

Does your leader understand that because of these catastrophic economic times, your organization must be able to not only completely understand the vision, the mission and passion of their past financial supporters but to embrace their mission? Your leader must convince past and future supporters that they are NOT making a donation to the non-profit organization but instead, are making a sound financial investment in themselves! Your organization must have a product or a service that they can use to partner with their financial supporters to not only accomplish the goals of the non-profit organization but to help their financial supporters rebuild their financial structure. These entities will NOT be your donors but instead, will be your financial and visionary collaborators.

THAT is what a wartime consigliere will and must do for non-profit organizations. They must have vision … Daring … Courage … Intelligence … and be willing to undertake bold initiatives. They must convince their past financial supporters that by investing (NOT donating) in the non-profit, they are actually investing in themselves, their employees, their families. And through collaborating with you, they are making a sound investment.

The non-profit organizations which have that type of wartime consigliere will survive and eventually thrive. Those that do not …

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