Philanthropy's Path To Redefine Efficiency
"In a crisis, short-term efficiency can be a shock amplifier. Long-term efficiency comes from building resilient institutions," states Andrés Spokoiny, president of the Jewish Funders Network, in a recent article in Stanford Social Innovation Review.
Spokoiny writes that if funders want to be prepared for the next recession, "we need a new definition of efficiency."
According to Spokoiny, long-term efficiency includes:
- contingency planning: "Conduct 'war games' to plan for different scenarios, both within individual organizations and the community more broadly."
- rational and robust overhead. "Organizations will need tools and personnel to proactively prepare for hard times, and crisis response requires training, planning, and staffing. A contingency plan is not just a piece of paper; it’s the hours of time spent by employees who aren’t consumed by other urgent business."
- rainy day funds. "Despite its importance, organizations may be nervous about devoting their meager resources to a rainy-day fund, just as donors may not see the need for an emergency chest."
Funders themselves need the same contingency planning and exercises as nonprofit professionals. We need a strategy for times of crisis, and we have to work with grantees to make sure that there’s alignment between our contingency plans and theirs. The next recession will come. What we do will shape much of how it affects our communities.
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