The collaboration that wasn’t: Benefits Data Trust

Here’s a thought… 🤔 when you get a big infusion of cash, try collaboration instead of (or alongside) rapid growth. 🤝

This is a very sad story 😥 that stopped me in my tracks this morning. I usually find happy stories of collaboration and restructuring that I share every Monday. #MergerMondays is about normalizing collaboration and restructuring in the nonprofit sector. It’s about a recognition that existing in perpetuity or shutting down out of the blue are only two options on a whole spectrum of choices organizations can make to evolve and shift as the world changes. Or grow responsibly to meet a moment.

Large grants are not entrusted to small organizations so that they can get bigger 📈. They are given with the intention of making the problem smaller 📉. When the problem gets smaller…the need for the organization ceases to exist.

Why EVERY nonprofit doesn’t have an “exit plan” is beyond me. 🤦‍♀️We’ve built so much infrastructure and normalization around strategic planning and rarely do we include an exit strategy as part of that visioning and planning work. I see this among my consulting colleagues all the time. So here’s my call to action: If you have the privilege of consulting with nonprofit organizations, stop taking their money if you aren’t adamant about your clients addressing some version of the following questions somewhere in your strategic planning process:

1) What are the conditions or events that could prompt your organization to close or radically downsize?

2) If one or several key positions left unexpectedly, what impact would that have and how will you respond?

3) Pretend for a moment that your organization closes its doors: Who will be impacted and how (think internally AND externally)? Who would you tell first and what would you share?

Let’s break down that first question: It’s very easy for clients to imagine losing a grant or getting caught up in a PR scandal or a crisis in key leadership vacancies. But can you guess the condition or event that is the most difficult for nonprofit leaders to imagine? The day when their mission is met.

Now that’s not the case for Benefits Data Trust and other recent closure examples. But it highlights something very important: Don’t plan for your exit because of everything that could go wrong. Plan for your exit because of everything that could go right. And if it does go wrong, you’ll be more prepared than had you never thought about it at all.

The consequences of not answering these questions is spelled out pretty clearly in this open letter from Benefits Data Trust staff. It’s real and it’s raw - and it’s going to negatively impact the people Benefits Data Trust was supposed to help.

I wonder how this story might have turned out differently had they leaned into collaboration - there may have been more checks and balances, more communication or opportunities for early intervention, and one or several organizations at the ready to pick up the pieces when it fell apart. Rapid growth is hard for any organization (for-profit or non-profit) to manage. And it has to be done very carefully. I love all the new and innovative ideas and technology coming into play to solve deeply entrenched social problems. And yet, treating nonprofits like tech start-ups is a slippery slope.

I understand why mega grant makers like Scott don’t have enough proximity to make effective smaller grants to grassroots and community-driven organizations. They don’t know the players and they don’t have the connections. They want to move big money fast.

But when you take a “bigger is better” approach, you’re really missing the point. Bigger is only better if its in service of eventually making your organization smaller, because you’ve solved a problem or shifted the conditions that created the problem in the first place.

Think about one of the necessities of growth: Staffing. When you hire staff, you’re likely poaching talent from another nonprofit with a similar or related mission but crappier pay. Why not let that staff person stay where they are, and approach the leadership of the “competitor” organization to see how you can collaborate? You might learn something about what they do really well. That staff person may have connections to community members and relationships that turnover would negatively impact. Turnover is disruptive, to say the least.

If you’re one of the privileged few who receives a big grant, 💰 share the wealth. Use it to strengthen your partnerships and relationships. Consider a model that distributes and shares power. You’ll create more stability for the people you serve.

You all dream about a big truckload of cash baking up onto the front lawn of your nonprofit. I get it - I’ve had that dream myself. But in the event it actually happens - that infusion of unrestricted grant money comes your way - resist the temptation to keep it for yourself. And partner with the people and organizations who are already doing the work.