2025:  Cause for Concern or a Call for Action?

My mentor, Jack Horak (author of “The TANGO Nonprofit Method”) used the metaphor of a three-legged stool to explain the importance of the nonprofit sector in American society. Today, the stool is under immense pressure.  Its three legs (government, business and nonprofit) are not operating in harmony which is to all of our detriment. The nonprofit leg, in particular, is navigating significant fear and uncertainty.

Social media updates emerge on a near daily basis regarding the freeze or cancellation of government funding and the weaponization of the IRS through legislation (for example, HR 9495) or executive action to target the tax-exempt status of certain nonprofits.  These developments understandably evoke strong emotions among nonprofit leaders — volunteer fiduciaries (directors) as well as management personnel.  Heightened fear and anxiety is augmented by the current landscape’s fluid, frantic and unpredictable pace.  When is a comment a bluff versus a prelude to concrete action? Do these developments present cause for concern or a call for action?  I think the answer is “both.”

While nonprofit leaders have every right to feel fear and anxiety under these circumstances, they cannot allow themselves to be indefinitely consumed by these emotions.  Their fiduciary duties require them to objectively focus on the facts and circumstances as they exist, to leverage outside qualified advisors (including attorneys, accountants, lobbyists etc.), and to act reasonably and in the best interests of their organizations. This is fundamental “duty of care,” memorialized in statutory law and reinforced in case law.

While the duty of care demands a diligent and informed decision-making process, it does not demand a perfect result nor is it subject to a lens of perfect 20-20 hindsight.  This is good news, because there is no defined playbook for a nonprofit to use in order to navigate the current landscape.  There are, however, some basic considerations for nonprofits to consider.  For example, it is generally prudent for nonprofits to develop alternative strategies to respond to said fluid and unpredictable landscape.  It is also prudent for nonprofits to continuously reassess said strategies.  Generally, it is prudent for nonprofits to strategically invest in compliance measures to preemptively prepare for potential investigations and/or audits.

There is more good news: nonprofits are not alone as they traverse this landscape.  They have advocates within their ranks, among their service providers and among those they serve.  It’s time to embrace the importance of the nonprofit leg of the stool.  I will go as far as to call it the most fundamental pillar of our society.  It’s a pillar that deserves to be embraced and defended.  These times present an opportunity for nonprofits to not only educate society about their significant real world social and economic contributions but to further humanize their missions. We all have family members and friends who have been served by a nonprofit and who understand, empathetically, how important this “leg” is to society.  “Advocacy” and “lobbying” are not dirty words in this landscape.  Nonprofits need to unabashedly embrace these words and proactively communicate with stakeholders and policymakers.

Some final good news: these times present opportunities.  They present opportunities for nonprofits to explore strategic collaborations and to zealously explore all new revenue generating activities by fully embracing the social enterprise movement.  Certain nonprofits will embrace the opportunity to emerge as leaders and standard-bearers for their respective missions and program participants.

In closing, these times present valid cause for fear and anxiety, but it’s how nonprofits respond that matters.  I encourage nonprofits to respond by balancing these emotions with strategic and informed decision-making, investing in their resilience and mobilizing their advocates to navigate this landscape.