December 2008 President's Message
John W. Hicks
The Economic Storm: Challenges and Opportunities—Changing the Paradigm to Meet Community Needs
The Foundation Center, NYRAG and United Way of New York City convened a roundtable session on November 19, 2008, hosted by Citi, to consider the current financial crisis and how it will impact the non-profit sector. New York’s situation is complex, with a 10-year high in unem-ployment, a 16-year low in consumer confidence and shrinking tax revenues that will necessitate cuts in services. “The community counts on us as ‘first responders’ to be strong,” noted Natalie Abatemarco, Citi’s Director of North America Community Programs, although the sector is vulnerable to economic turmoil.
Today’s economic storm is our Katrina challenge, said keynote speaker Geoffrey Canada, President/CEO, Harlem Children’s Zone. With Wall Street in trouble, “New York is ground zero.” The “new poor,” who are losing jobs, homes and 401(k)s, are joining the “old poor” who face life-or-death crises. The sector must respond to both, holding the safety net together for “a couple of real hard years” to protect our human infrastructure from decline. Drawing on our expertise, we must make the case to our elected officials for federal deficit spending in underserved communities. The City can’t afford a return to the years of fiscal crisis such as in the 1970’s.
We must maintain the highest quality core services, said Linda Gibbs, Deputy Mayor for Health and Human Services, noting that the Mayor is working to protect Medicaid reimbursement for the neediest households and to attract infrastructure projects that will bring jobs. We can’t count on immediate federal assistance, Gibbs said. Her commissioners hope to target budget cuts to protect core services rather than across-the-board cuts. Cost-of-living adjustments will continue, to protect front-line social service workers. Focused on client service outcomes, the City will eliminate waste and sub-level performance, said Gibbs, affirming its strong commitment to the non-profit sector.
“Collaboration is essential across the sector,” said Bradford Smith, President, The Foundation Center. “Facing a global recession, we all share responsibility to articulate a broad social vision.” Gordon Campbell, President/CEO, United Way of NYC, cautioned participants not to let the crisis go to waste, quoting Rahm Emanuel, President-elect Obama’s Chief of Staff, who said a crisis is “an opportunity to do important things you would otherwise avoid.”
Engage in scenario planning for best and worst outcomes with your boards, advised Clara Miller, President/CEO, Nonprofit Finance Fund; protect your own liquidity and cash management. Fight denial, added Stephanie Palmer, Executive Director, NYC Mission Society; with board members worried about their own job security, the proverbial glass is empty. Boards must rethink assumptions of 90 days ago about donors. Grass-roots organizations, with budgets below $1 million, will be most vulnerable to closing, Palmer predicted.
Keep leadership focused on services that matter most. For example, an annual report may be essential, but not for $30,000; produce it on line for $1,500, recommended Palmer who did this at the NYC Mission Society. Find efficiencies in expenditures, especially in fundraising, suggested Carolyn Cavicchio, Senior Research Associate for Global Corporate Citizenship, The Conference Board Center for Corporate Citizenship and Sustainability. Encourage existing organizations to embrace new ideas and innovative practices so that young people with new ideas will see our existing agencies as viable employers, rather than go and simply form new organizations.
This roundtable session was co-sponsored by the Greater New York Chapter, AFP. |
