In a new report (March 2021), Buffering Against Uncertainty, SMU DataArts analyzes the condition of capital in nonprofit cultural organizations as we move forward from the COVID-19 crisis. While the report distinguishes between organizations that self-describe as BIPOC-serving and others, its conclusions are relevant across the entire sector. Authors Zannie Voss and Rebecca Thomas recommend a number of strategies for funders and for organizations to capitalize on “this moment of challenge and change.” They align perfectly with some of the core tenets of our work here at EmcArts, and we hope grantmakers will take them to heart:
- Support recovery, reimagining and rebuilding
This goes far beyond the structure of funding. Success will be based equally on the human capacities in organizations, and processes that give them agency in what we call “adaptive re-imagining.” The authors “encourage funders to support grantee-defined strategies for recovery and adaptation.”
- Invest in capacity-building
You don’t get adaptive change with the same capacities you used to set up the past. Building adaptive capacity is now the number 1 priority, underpinned by “flexible multiyear capacity-building funds … so organizations can address gaps in human capital.”
- Reinforce new business models
These don’t emerge from the implementation of linear rational plans. They are always a leap of the imagination, with multiple potential pathways forward explored and revised through brave experimentation and rapid learning. Developing an experimental mindset – and then getting it into action when outcomes must necessarily be unknown – are at the center of our work. This is how grantmakers can “signal trust in grantees” and promote resilience.
- Help prevent history from repeating itself
The lack of Innovation Capital in our field – reserves held not to support cashflow (the primary purpose of working capital) but to invest in innovation and adaptive work at the right stage – is among its biggest problems, especially now. We can’t wait for old models to return to stability (they won’t) before investing in adaptive change. If organizations have to wait for capital of this type, they will expend their remaining energy in trying to go back to the “old normal” and then it will be too late. EmcArts has a comprehensive approach to the three stages of investing capital in innovation in order to make possible the new core businesses of the future. Take a look at this video from Workshop 10 of our Staging Change program in Toronto that expands on this idea.
Take a small risk by partnering with EmcArts with “flexible and patient support” to build adaptive capacity, rehearse adaptive change and strengthen adaptive leadership. “During this moment of challenge and change, we encourage funders to take risks on nonprofit strategies that have the potential, over time, to lead to healthy businesses….”