RECESSION OR REINVENTION? What will it be for your non-profit? (Part 1)

By March 23, 2020Community, Partnerships

INTRODUCTION

There’s a song that concludes the 2006 movie ‘Donnie Darko’ called Mad World[1]. It’s swirling around my head day and night (for those too young to remember Donnie Darko, whilst in isolation add it to your watch list – it’s weird but wonderful). The lyrics are creepily pertinent now, as the world is in lock down and Australia lumbers from one crisis to another, and the next one will, undoubtedly, be economic.

I don’t mince words; I speak my truth for what it’s worth and people always know where they stand with me. Due to an adventurous & challenging life[2] I’m exceptionally resilient & very much a realist. Pollyanna, I’m not, but I’m feeling optimistic – despite running a small business which is – like all small businesses at present – vulnerable. I do hope the following provides some reassurance and a fresh perspective in the current crisis. I’d love your thoughts, comments & contribution.

Whilst we’re in the thick of the crisis right now, we WILL get through this, and when we do we’ll be required to get back on our feet FAST. We all need to grit our teeth, ride out the tough time because there are people who rely on you & your services and there’s opportunity on the other side. Let’s look at the opportunity before the zombie’s bash down the door.

Crisis or Opportunity – or both?

“The Chinese use two brush strokes to write the word crisis.  One brush stroke stands for danger, the other for opportunity.  In a crisis be aware of the danger, but recognise the opportunity” John F Kennedy (speech 1959)

Whilst this is a lovely sentiment, from a well-respected statesman, widely shared via memes & quote sites, it’s actually untrue[3]. It’s human nature to reach out to seek advice & answers on what to do when confronted with a crisis. In this era of fake news & misinformation it’s important now more than ever to be discerning about who and what you listen to. Please, listen & take advice from people who are not just ‘experts’ in their field, but people who have experience in navigating a volatile environment. Research their credentials, ask about the results they’ve produced and gather social proof of any person or consultant offering you advice. This is not the time to take things at face value. There’s a very short window to get your house in order before the impending recession hits, and there’s no time to waste or money to lose.

Why take 20 minutes of your valuable time to listen to me?

Not only am I experienced in my field – 25 years of matchmaking corporates & non-profits, over 50 win win partnerships, I’m also a survivor (or as I prefer, a thriver). I have my finger on the pulse of both for-purpose & for-profit sectors: working with non-profits & social enterprises to guide them towards corporate partnership success and working with corporates & brands to develop CSR strategies and find them the perfect charity partner. Companies like K-mart, IAG Foundation, Disney Australia, Mondelez, Vodafone Foundation and numerous others. I’ve authored 7 publications based on rigorous research, have been tracking consumer attitudes towards Social Good & CSR for 2 decades.

When I started Cavill + Co in 1995, I survived the naysayers who cautioned that there wasn’t a market for someone matchmaking companies to charities (this is pre-internet, pre-CSR). I survived numerous technological advances: introduction of this thing called the internet; the smart phone; the Y2K hysteria, the GFC and 2 failed mergers. Through it all the one thing that has kept me strong, and sane, has been the faith of others, my wonderful collaborators, mentors and clients.

As a partnership matchmaker I’ve always known that collaboration was the key to survival, and now more than ever I believe it’s going to be the key to renewal and thriving. If we embrace it.

Australia heading for recession

Like it or not, the economists are predicting that Australia, like the rest of the world, will very likely plunge into recession in the coming months. A ‘recession’[4] means two quarters of economic contraction.  In Australia, we’ve not had a recession (technically, based on this definition, although we’ve come close) in 30 years – in fact we hold the world record for the longest period of prosperity. So, for many Australians this will be a new & challenging experience.

These are the questions that have been landing in my inbox:

Q: Will the Australian government be too focused on investing in bush-fire ravaged communities, propping up the economy & major infrastructure industry to worry about non-profits?

Q: What does a recession mean for non-profits and their ability to fundraise & secure corporate income?

Q: What does it mean for non-profits partnering with corporates in the years to come, who tend to cut luxuries like giving in tough times?

I’m no futurist or Nostradamus, nor do I have a phone line direct to Scott Morrison, but I do have some thoughts on the above. Here’s what I suggest – as a survivor, a corporate partnerships expert, a marketer & communicator, an entrepreneur, a pragmatist & optimist: 1) LOOK BACK 2) LOOK FORWARD 3) LOOK AFTER YOURSELF & OTHERS 4) LOOK UP and 5) LOOK WITHIN.

Part 2 of this blog will land in your inbox on Wednesday 25 March 2020 along with practical, actionable tips.

1. LOOK BACK

“If you want to know the future, look at the past” Albert Einstein

Whilst this crisis is unprecedented, and we won’t know the full impact of it for a while, fundamentally human behaviour (in particular, the need for partnership, for community) doesn’t change that much, even in a crisis. To consider how the market might behave post-COVID-19 it’s worth looking at the past when Australia and the world faced recession. What happened?

The last economic downturn in Australia (and a recession around the world) was in 2008. You’d have to ask fundraising experts what happened to ‘giving’ back then (or read some of the credible articles on the net like this one[5] or fundraising video from Sean Triner of Moceanic[6]), but I know from research that ‘financial hardship’ is only 50% of why donors stop giving (the remainder is made up of a myriad of things including ‘not being thanked’, ‘unsure how funds are used’ and ‘donated to another’). In terms of my area of expertise – corporate & business – it’s rather interesting to look much further back as it indicates that crisis and recessions create rapid disruption & the opportunity for innovation in business.

 “Innovation loves a crisis” Jong-Yong Yun, CEO of Samsung

The USA suffered a 20-year depression at the end of the 1800s triggered by the Vienna stock market crash. Companies that emerged from this include Eli Lily, IBM, Merck, Gillette and J&J – now billion-dollar giants still with us today.

     

After the great depression of the 1900s, companies like HP and 20th Century Fox sprung up.

In the oil crisis & market crash of 1973, global giants like Microsoft & Apple emerged. Not long after  Alibaba, Mailchimp, LinkedIn, Shopify, Shutterstock and our very own Atlassian became everyday fixtures in our increasingly online lives.

In fact, when it comes to the business & corporate sector, my research into the past indicates that in boom times – when everything is going well, few companies change or innovate, as there’s little incentive to do so.

Since the most recent global recession of 2008 which pushed Australia into economic contraction, companies that saw the efficiency of online programs –  Airtasker, WeWork, Zoom and Go Fund Me – surfaced and flourished in Australia.

As successful entrepreneur Daniel Priestley[7] says “Companies forged in hell have a much more durable DNA coming out”

Assuming you’re currently implementing survival strategies for the coming months of isolation & chaos, are you thinking far enough forward? How you will not just survive but thrive in the post virus recessionary world? Are you thinking about how to partner with those companies forged in hell that will become the billion-dollar giants of this decade?

2. LOOK FORWARD

“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed” Charles Darwin

Whilst many of us are suffering, there are companies that are doing well in the crisis. Not every company is in the process of laying off staff, cutting back luxuries, or planning to close their doors. Supermarkets, online services, streaming services, vitamin companies, delivery services and toilet paper brands (way to go… Who Gives a Crap!) are just a handful that are doing well by serving the current customer need.

Inevitably some big companies will have to innovate and those not adept at dealing with disruption may likely collapse. After the last recession of 2008, stubborn companies that refused to change, like Blockbuster, Kodak, & Toys R Us went under or into bankruptcy. Companies like Netflix, Apple, Disney & Microsoft have survived several USA crashes due to their continued innovation.

So, the key to surviving is to adapt, innovate and stay very focused on your customer’s needs.

Can you imagine life without Instagram, WhatsApp, Uber, Airbnb & Dropbox?  They all took advantage of changing customer needs and low interest rates during the 2008 economic crisis and built billion-dollar businesses.

The story of Airbnb

The $31 billion-dollar website began after two 27-year old guys were so broke they couldn’t afford their San Fran rent. A big conference was coming to town & there were no hotel beds to be found (the guys were in crisis, so were conference delegates). They bought 3 air mattresses, turned their loft into a bedroom and charged $80 to stay.  One of the guests thought it was a good idea for a business and the trio set about seeking investors. It took them 2 failed launches, 15 Angel investor rejections, numerous name & website reinventions but in April 2009 they got seed investment. The rest is history.

Today, technology is laying the foundations for smarter ways of working and offering a global market to Australian entrepreneurs. Governments around the world are pumping money into the economy. Interest rates will come down taking pressure off homeowners. Retired boomers have more cash than any other generation in history and they want to spend it while they’re still alive.

Recession can and WILL lead to reinvention. Innovation doesn’t go into isolation in tough times – it thrives.

Savvy entrepreneurs and smart non-profits know that to be successful in the long term, it’s vital to balance your time & investment across 3 areas – short-term, medium term and long-term income potential. This chart, reproduced thanks to my friend and former client Shannon Anderson, from her amazing book ‘Yes You Can Fund It’[8], shows the different strategies that bear fruit across the 3 areas. As you can see corporate partnerships & sponsorships are in the middle – although many of the partnerships we’ve built have lasted 10+ years (one, Seek Volunteer, is in its 20th year!) so when you get it right, they become long term.

Whilst it’s tempting in a crisis to revert to short-termism, that’s the worst thing to do. 

PetRescue[9], a tiny but well-known digital charity that connects Australians with rescue fur babies, put in place Cavill + Co’s corporate partnerships strategy 3 years ago. It bore fruit immediately as they signed up PetStock and Woolworths. In the words of Founder & Joint CEO John Bishop yesterday:

“Without our corporate partners, right now we’d be in deep shit”. 

Whilst it’s important to check in with your existing partners & sponsors, indeed all your stakeholder relationships, to see how everyone is impacted, you must also focus on the future. Are you recession-proof? Are you willing to use this crisis to reinvent how you do what you do? If all you do right now is play the ‘hand to mouth’ game, it’s likely you’ll be playing it for a long time to come.

The companies that will emerge from this recession, leaner & stronger, will most certainly be Dot.com driven. Social isolation has led to a boom in online solutions & learning, and that’s only going to increase. You’ll want to embrace digital opportunities because these Dot.com giants will want to partner with digital savvy, responsive, contemporary non-profits with great emotive stories. Whilst rebranding might seem like a luxury right now, if your brand is looking a little tired or daggy talk to Marlin[10], the best communications firm serving the sector. Your comms will need to ‘jump out’ in 2021 as you won’t be the only one wanting to reel in the big fish ( 😊).

How will you source your income? Government has plenty on its plate – keeping the economy propped up. There are obvious charities that will be at the front of the queue for any government grants – community builders, mental health, health research (especially of the virus kind). But what about all the other non-profits doing amazing work?

Are consumer purses now empty after so generously supporting bush fire appeals? Are they sceptical after bad press around money not being released fast enough or to promised areas? Will the threat of losing their job, their business and their home mean all donations are off the table for the remainder of the year? The world is changing so fast, who’s needs are the greatest? It wasn’t that long ago that Australians were saddened over the decimated koala population. A few weeks later, there appear to be much bigger problems & ‘more important’ things to worry about.

It’s an extremely volatile environment and in these circumstances you look to the most strategic and most abundant sector for support – and that’s always been, and will continue to be, the business & corporate sector.

I really don’t believe too many corporates will, in the future, be willing or able to ‘donate’ in the way they perhaps did so generously to bush-fire appeals. With a sharp eye on every dollar being spent, they’ll look for investments that deliver a tangible, measurable return. CSR & cause-partnerships will be crucial – not only because they provide a return – in reputational benefit, motivated staff, differentiation and brand halo – but because in tough times companies are more sharply focused on giving customers what they want – and customers want companies that do good. I have plenty of recent Australian & global research to validate this.[11]

Is your organisation ready to win corporate partners in the challenging years to come? If not, perhaps it’s time to invest in your people, re-skill those that may appear redundant, with an online course that not only give your organisation clarity & a professional make-over, but also gets you partner ready. Until now there hasn’t been such a course, but in a few weeks there will be. Check out BePartnerReady.com™.

Thank you for reading. Part 2 of this blog will land in your inbox on Friday 27 March 2020 along with practical, actionable tips.

Hailey

Footnote

Transparency is very important to me.  You may have noticed I’ve recommended Marlin in this blog. This IS NOT because they’ve paid me to (I don’t do that), but because I genuinely love them, and they’ve done exceptional work for my clients in the past year. When I find a gem like Marlin I want to share it with everyone. They do incredible work in the branding; comms & digital space and they serve only for-purpose.  https://marlincommunications.com/

I’ve also recommended a new online training program called BePartnerReady.com™.  This is a brand-new business I’m part of with a group of amazing social entrepreneurs that have translated my 25 years of experience into a robust online learning & implementation course to enable non-profits & social enterprises to prepare for and win corporate partners & sponsors.  We’ve been developing it for over a year and launching after Easter. If you’d like to be the first to know when we’re open for business, take a peek here. https://www.bepartnerready.com/

[1] Mad world by Gary Jules (a different arrangement of Tears for Fears original song) https://www.youtube.com/watch?v=4N3N1MlvVc4

[2]. An abusive childhood, parental abandonment, leaving home at 16, monthly bomb attacks in London, malaria in Kenya, gorillas in Rwanda, Everest base camp, emigrating to Australia, marriage breakdown, death of my dad (my hero)…are just a few of the things I’ve survived

[3] http://pinyin.info/chinese/crisis.html

[4] Economic decline during which trade & industry are reduced, generally identified as a fall in GDP in 2 successive quarters

[5] https://ssir.org/articles/entry/fundraising_in_tough_times#

[6] https://www.moceanic.com/2020/covid-19-your-cause/?inf_contact_key=cd86a1bc46c4041984c3668122eb65b2680f8914173f9191b1c0223e68310bb1

[7] Daniel Priestly is a successful entrepreneur, co-founder of Dent Global, one of the world’s top business accelerators for leaders https://www.forbes.com/sites/danielpriestley/#42d963e421b3

[8] Yes you can Fund It, a brilliant book from someone that’s introduced transformational strategies at organisations such as Lifeline, Vinnies & Guide Dogs Victoria – available on Amazon https://www.amazon.com.au/YES-You-Fund-not-profit-ebook/dp/B018L5N78M

[9] PetRescue https://www.petrescue.com.au/

[10] Marlin https://marlincommunications.com/

[11] Talking the Walk®2 – https://www.cavill.com.au/talking-the-walk/ – Free (instead of $70) to all charities that put in the code ‘STATS’ upon ‘purchase’ for the next month

About Hailey

Hailey Cavill-Jaspers - AKA Dokta Do-Good! Founder of Cavill + Co, gregarious, cat lover, tea drinker, Latin dancer and the most prolific partnership match-maker you'll meet.

2 Comments

  • Lynda Inglis says:

    Great read, Hailey. Having worked with you and known you now for over a decade, you really do THRIVE in partnership match-making! Your willingness to share your knowledge and expertise is inspiring and appreciated, especially in these uncertain times. We (for-purpose organisations) will get through this, and come out stronger, especially with support from our corporate partners, it just may look a little different to this time last year. We should look at this with excitement, I think. You’ve got many really valid points in your blog, thanks for doing the research and sharing these gems. Lynda Inglis, RFDS (Qld Section)

  • […] Cavill has written an interesting post called Recession or reinvention? What will it be for your non-profit? It begins with a reference to the movie Donnie Darko so that’s a good […]

Leave a Reply