The Sector Is Shifting: Here's How to Lead

This article is a summary of Episode 44 of our Designing Tomorrow podcast. Each episode is a conversation between Jonathan Hicken, Executive Director of the Seymour Marine Discovery Center, and Cosmic’s Creative Director, Eric Ressler.

A lot happened between seasons of our Designing Tomorrow podcast. Mainly, a lot of policies in America have had trickle effects around the entire world that have directly hit the social impact sector pretty hard. Harder than even a lot of us had feared.

Today we’re going to talk a little bit about our view from the field. What are we seeing out there from our different perspectives? What are we hearing from social impact leaders out doing their everyday work? And most importantly, what should we all be doing about it?

What We're Hearing From the Field

By and large, what we're hearing is that everybody is doing a few things.

• They are slowing down. 
• They are reducing scope
• They are de-risking things
• They're looking to mitigate single points of failure

Meaning, if they were relying on federal funding and that funding became at risk, they don't want their entire organization to fall apart based on that one thing. So they're trying to build multiple points of failure. Everybody we're talking to is being impacted by what has happened in our country in the last couple of months.

At the Seymour Marine Discovery Center, they did not lose any direct federal funding. They are not reliant on that for their business. But even with that, the reaction at the Seymour Center was very human in nature. The Seymour Center is a community institution, and so the first reaction was to go check on the people and the organizations that might get affected. And sure enough, in Santa Cruz, there were people we know who were let go or laid off or whose jobs suddenly became at risk. The human toll in the Santa Cruz community was instantly palpable.

This Feels Like the Early Days of COVID

We’ve been hearing from a bunch of different nonprofit executive directors, and some social enterprise CEOs even who are affected by this. The thing that we keep reflecting on and coming back to is that this moment feels a lot like the early days of COVID.

Everyone seems to be in this state of fear and confusion and this general feeling of chaos. And in certain ways, there are a lot of parallels. There's existential threat happening largely from a funding perspective, but even more so from an identity perspective.

There used to be this general feeling that if you were doing work in the social impact space — if you were working for a nonprofit or a humanitarian aid organization or anything in that space — you could assume people would just be on your side. We're doing good work. Yeah, there might be some critics out there. Yeah, there's a bunch of talk inside the sector around redundancy. But you have the support of the population and of humanity and of the public at some level. That just doesn't feel true anymore for a lot of people and for a lot of organizations. And that is honestly kind of a shame.

In the world of science, the gut reaction is: Oh, science itself is really under the microscope now — pun intended. The identity part is real. There's real self-questioning, but also a certain level of reactive self-confidence too. Like — hell yeah, this is important.

Seeds of Criticism, and the Sector's Response

We started to pick up on this even before some of these recent developments, even just paying attention to culture and seeing this rising trend of criticism around nonprofits and social impact organizations and whether or not they were really all that effective.

Where we really started to see it most was online. Specifically around homeless services and humanitarian organizations working on that sector and that problem. We're in California. There's a huge issue and problem with the unhoused population. And what we started to see — even listening to some friends who were out of the space, or seeing people comment on Reddit forums or whatever — was this perception that all these organizations are a big scam. They're wasting a bunch of money. They're total grifters. And that there's this nonprofit industrial complex that's just a big tax write-off.

We started to see seeds of that argument forming. And there are some kernels of truth to some of those criticisms for certain organizations. This is a theme we've been thinking about a lot: a lot of these accusations and criticisms that are being thrown out often have a small — sometimes a microscopic — but a small kernel of truth behind them. But then they just get completely overblown as a reason to make some really poor choices.

To us, this reinforces a lot of what we think about all the time. We need to be better at getting these stories out in a way that actually breaks through.

Getting Local, Getting Focused

One of the things we continually notice is this reaching — this desire to make sense of what's happening. One of the ways we’ve observed is in the way social impact leaders talk to their team and communicate their work. It’s getting much more local, much more community oriented. They are reducing, or at least coming to terms with, the sphere of influence they have, and really looking around at the people who are most connected to their work and calling for attention, calling for support.

By and large, that's a good thing. Getting focused within your sphere of influence matters. But it also feels like if it swings too far, it could get too insular, too siloed, or too exclusionary. There's a balance that needs to be sorted out. But there does seem to be a reducing of scope, or reducing of size, that's happening — and we wonder if that's good or bad.

On Forced Contraction and Blame

A couple of stories come to mind on the topic of reducing scope. We were talking to an organization out of Jamaica. They had a huge commitment of funding from USAID that had been approved, and they had programs already spun up around it. That went poof overnight. They were in a position where they were forced to scale down because they lost a large percentage of the resources that they had earmarked, allocated, planned for, and started to implement.

So, there are different scenarios. One is being forced to scale down because you just lost a bunch of funding. We've seen a lot of this happening, especially online, around folks — even among consultants and advisors and partners to nonprofits like Cosmic — saying: "See, we over-relied on federal grants and we shouldn't have done that. And now we need to use this as an opportunity to correct that." We've said that before too, though not as strongly. But we’ve seen some pushback on that perspective that we think is valid.

For a very long time, a lot of these organizations — with really good planning and in real partnership with the government — have built a model around that funding. And another thing that's been really interesting is hearing a lot more about our sector from people outside of our sector than we ever have before, because of these federal cuts and USAID being spun down and drastically defunded. 

It's really interesting to hear how people who are in the social impact space are thinking about this. One of the things we realized is that a lot of people have no idea how social change happens in the world, and how integral nonprofits and other social impact organizations are to actually implementing that change.

That's not to say there aren't other ways to make that happen. And we weren’t super informed on that either until we worked in the space. There is a lot of connective tissue behind the scenes that's making our world work the way that it does. And often these organizations are picking up some of the hardest problems and doing their best to fix them. But, we have to be careful about jumping to conclusions around ideas like — "You shouldn't have ever been so dependent on that one source of funding in the first place." — because a lot of really smart people did a lot of really good work on that model working for a long time. What's happening is literally unprecedented.

Maybe you're going to get a momentary boost in your engagement or your attention or whatever. But by and large, for our sector, when we start to get into that, it's a net negative. 

We’ve seen that there's this feeling that we're not allowed to be successful or positive or optimistic at this moment. We're quick to throw shade at each other and other people. And for good reason. There are a lot of people hurting, and there are a lot of organizations who have either closed up shop already or are really feeling like that's getting close. We don't mean to diminish the impact of what's going on. And also — we believe that we, as a sector, need to be lifting each other up and shining lights on possibilities rather than saying, “You did this wrong or you did that wrong.”

Reframing Challenge as Opportunity

Being positive is the hardest thing to do in a moment like this — to look at what, for many organizations, is going to be, and maybe already is, one of the most challenging times they've ever had to navigate, and to figure out how to reframe that into an opportunity instead of a challenge. That's one of those things that's a lot easier to say than it is to actually do.

There was a similar-ish period during the pandemic. What we noticed then, and what we’re starting to notice now is that some organizations freeze up and scale down and hunker down and do a protective play. They don't want to rock the boat, they don't want to be in the limelight. They want to hunker down and just get through it — weather the storm.

And without being critical — because there are certain situations where that is the right call — we do sometimes worry that that default reaction can be shortsighted. What we noticed through the first major disruption in the sector since we've been in it professionally, is that the organizations that took a moment to breathe and orient, but then activated very rapidly and strongly — even if they ended up pivoting that activation or that play that they made — those were the organizations that ultimately came out stronger. And we admit, it’s much easier to say that than to actually do it.

We've been really impressed that amongst all of this chaos — working with organizations who were very directly affected with funding or extra scrutiny or both — found a way to show up for their community. They opened up communication channels around that — backed by action in the real world — and are on a path to figure out how to navigate a landscape that's very different, that’s very fluid. They made an active choice not to freeze up and hunker down, but to move into action in a way that is really courageous and admirable.

Now Is the Time to Stand Up

In a way, right now is the best time to stand up for core values. The alternative is to step back, slow down, reduce scope, and go back to the core bread and butter of the business instead of reaching.

We have to acknowledge that that might not be possible for everyone. We’re not here to throw shade at anyone who is in a situation where that isn't possible. 

There are organizations — some we've worked with — that were extremely forward-thinking around inclusion and diversity and equity programs in their actions, not just their words, in a way that was really pragmatic and smart and data-driven, not just performative. Some have made the strategic choice to remove all of that language from all of their marketing communications. They were really sad to do it, but they made the choice because they were scared that if they didn't, they would lose funding, be extra scrutinized, have partnerships fall apart — and that ultimately it would be a net negative on their impact. Multiple organizations we've worked with have had some version of this that they’ve had to navigate. We have to acknowledge that that is okay too.

But if you are in a position where the net negative is not as existential — then you sort of owe it to the movement, so to speak, to be strong. To not just roll over. To not throw in the towel on the things you believe in as a leader and as an organization.

What Social Impact Leaders Can Actually Do

Let’s shift to how we can best show up right now. What are some actual actions that social impact leaders can take from various positions?

A Call to Funders

One thing that we've thought about a lot is a call to action to anyone who is in a position to fund or to invest in these organizations. Now is a really good time to write some checks because there's a lot of folks out there who are hurting, who need help, who had funding just go “poof” overnight with no real warning and no real strategy or grace around how that happened.

We believe there's a time for measuring effectiveness and being really strategic about these investments. We don't have to throw that away. But one thing we did see during COVID is a lot of foundations and funders step up and provide emergency relief for these organizations. Although there are some organizations leading by example, we're a little underwhelmed, frankly, about how little funding is being brought to these organizations in an emergency response way.

For Executive Directors and CEOs

A couple of things we would like to say to Executive Directors and CEOS. 

1. Check in with your donors and your funders, and do it in an altruistic way. Reach out and say: You've really helped us and our organization deliver impact, and we know you care about this impact, and we want to help you make sure that you're feeling really good about that, whether it's with us or another organization. We just want to check in with you and make sure that we're still in this together. 

You know which donors to reach out to, and not. Think about who it would be appropriate to reach out to.

1. Reach out to your partners. If you're collaborating with other organizations — and a lot of social impact organizations do, that's the recipe for impact in a lot of cases — check in with them and ask: Is there anything we can do to help? How can we strengthen our own networks, our own webs of impact? Just check in with people and strengthen the thing that ultimately is going to create long-term impact.

These are long-game plays. You're not going after an immediate return on those things. It takes time. But it's really worth it.

We've been in a nice position to be able to make some introductions between different clients that we work with who have opportunities to collaborate. But even more so, it's okay to have just a moment of solidarity. To admit to each other that  we're going through some rough stuff right now. Even just acknowledging that as a sector and helping other people is a great way to make yourself feel better about a bad situation that you're in.

Most organizations we've worked with, and are working with and talking to, are actually kind of thankful because they have at least one story of someone they know really well who's going through it even worse than they are right now. That's maybe a weird way to think about it, but that's something we're hearing.

If You're Really In It: How to Handle Contraction Gracefully

Hypothetically, if we were faced with contraction of some sort, the first thing we'd do is go back down to our core impact — going back all the way to the origin story if needed. Really going back to what is the very essence of what we're doing, and starting to think about what work is absolutely necessary in order to continue delivering that.

That is so much easier to say than to do — especially when you have people on your team who are relying on you and your organization for their livelihood. That is really hard in practice. But eventually there is a way to do cuts compassionately.

So, start to prepare to help the people on your team land on their feet. If you're going to need to let people go or contract your team, the best thing you can do for the fabric of your community, or for the fabric of your cause, is making sure those smart, capable, passionate people can continue doing that work, even if it's not with you. Start to think about how you might equip these people with the tools they need to move on.

Those are the knee-jerk reaction things to be thinking about: 

• Get down to the very core of the work
• Cut anything else that's not central
• Help the people you have to let go land on their feet

Communicate — More Than You Think You Need To

Now is an extra important time to be over-communicating to your community and to your supporters about what's happening. Because of all of the scrutiny, because of the uncertainty, because of the chaos, a lot of organizations — especially when it comes to strategic communications — are scaling back. Maybe even just because they're overwhelmed and other higher-priority things are happening.  We totally get all that.

But a lot of people don't actually know what these organizations are going through — even their supporters, maybe even their partners. Not that you need to do this in a woe-is-me, sob-story framing — even if it's justified — but just keeping your community abreast of what's going on, what you're going through, what you're struggling with right now, how they can help.

Doing that in an authentic way and doing that in a personal way is going to be really important. And we also hope that — going back to turning a challenge into an opportunity — we can take this as an opportunity as a sector to really elevate telling stories about why our work matters. Why it's important. Why it's worth doing. Why it's worth supporting. We need to do so in a way that can counter some of these disinformation narratives around a grift economy of the nonprofit space — which is just so ironic amidst what's actually happening at a federal level.

People have even thanked them for being brave enough to say something, and for keeping them in the loop around how they're thinking about it. Repeat, repeat, repeat, repeat impact stories. Now's the time to do that.

On this season of our Designing Tomorrow podcast, we are hoping to cover a lot of topics that will help folks in the social impact space make some big moves — even amongst all this uncertainty. We're going to do our best to keep in mind what the playing field is right now, and what the realities are for you as a social impact leader. And at the same time, we want to make sure that we don't make ourselves smaller — or feel smaller — just because of these realities.

Check out the full conversation on our Designing Tomorrow podcast.