Created By: Stephen K. Orr and CJ OrrMarch 14, 2023 The sudden and unexpected failure of Silicon Valley Bank (SVB), Signature Bank, and others isn’t just business news. It has short and long-term implications for the economy and therefore matters to nonprofits, even those operating far from northern California. As with the Covid pandemic and the Great Recession of 2008, this time of unrest presents an opportunity to model leadership within and beyond your organization. Below are three simple but crucial pieces of advice for nonprofit leaders: 1. Keep calm. At this point, the regional bank crisis does not appear to be as severe a crisis as Covid or the Great Recession. It might share more in common with the savings and loan crisis of the 1980s and 1990s, which brought down one-third of the nation’s savings and loans. Nobody knows what will happen next, but we do know that this is not the time to abandon your capital campaign or other fundraising plans. (Fear of the unknown can be paralyzing, but panic doesn’t solve anything.) In a crisis, you should maintain a level head and seek to understand the risk outlook today and in the future—for your organization (which has banking relationships of its own), for your donors and, of course, for anyone your mission touches. This advice applies to external relations and within your organization. It’s up to you to set an example and remain focused on mission rather than playing pundit. >>> The Investment Mentality: What Nonprofit Leaders Need To Know 2. Stay informed. It’s too soon to say whether the bank failures are an isolated incident or the beginning of a protracted crisis. Some investors are encouraged by the Federal Reserve Bank’s swift action to stem the contagion, while pessimistic prognosticators are pointing to commercial real estate, which remains in a weakened state in the wake of the pandemic, as the next domino to fall. Nonprofit leaders should be conversant in the language of finance, which requires both a grasp of fundamental knowledge (about how banks work and their relationship to the Federal Reserve and the Federal Deposit Insurance Corporation) and a handle on events as they unfold (which means checking in daily with CNBC, Bloomberg, and the Wall Street Journal). If you are the executive director or VP of development, consider this as an opportunity to engage a few members of your team as “study partners” in finance, sharing articles or podcasts, thus building your organization’s knowledge base. Board members with financial expertise might be willing to participate on an informal basis. The return on investment is a culture where staff and donors—most of whom are investors—share a common language. That’s a cornerstone of the business of philanthropy. >>> Observations (Not Predictions) Of The 2023 Nonprofit Landscape 3. Check in. Always overcommunicate. Send this blog to your frontline fundraising staff. Furthermore, as Orr Group recommended (and practiced) in the early days of the pandemic, a crisis is a moment to reach out to anyone in your network who might be affected. In this case, that might be anyone involved in banking, venture capital, or tech startups, whether or not they had an account with SVB or another regional bank. Donors view nonprofit executives as trusted and neutral partners, and brief check-in phone calls are a good way to build upon that trust. As an added benefit, you’ll pick up information and perspective that might be useful background for other conversations. This is, of course, not the time to solicit a donation or to push for attendance at the gala. Your role in these interactions is to listen, and to do that, you need to know enough about the situation to ask thoughtful questions—and then to wish them well. >>> Getting Real: How Being Authentic Can Improve Your Fundraising Again, nobody knows what’s going to happen next, but your words and actions in a crisis make a difference in how your nonprofit will navigate this crisis—and any others heading our way. You know you can advance your mission and achieve your goals only by maintaining your financial stability. Contact us today to take advantage of Orr Group’s business mindset. Contact Us Steve Orr is the Co-Founder and Managing Partner of Orr Group, and draws from his investment banking and finance background to bring a problem-solving approach, a focus on metrics, and an outcomes-driven perspective to the nonprofit sector. CJ Orr is President and Partner at Orr Group. CJ has served as a trusted partner to clients for over 10 years, and his extensive background in finance provides him with a strong foundation in analytics, metrics, and ROI.