How not-for-profits can face the future

Posted on 07 Feb 2024

By Paul Higgins

Successful not-for-profits need a balance of anticipation and flexibility when looking beyond the horizon says futurist Paul Higgins.

For not-for-profit organisations, facing the future requires a balance between the capacity to anticipate and the capacity to be flexible and reactive as things unfold. The right balance of anticipation and reactiveness depends on the organisation's context and the landscape it faces.

An organisation such as a water company is making decisions on assets that might last 30–50 years, so it should tend more towards anticipation.

An organisation that operates in a complex landscape should tend towards reactiveness because complexity means anticipation is almost impossible.

I deliberately use the word “tend” because rather than being completely separate, anticipation and reactiveness can complement each other. Thinking about what might happen helps us react better when things change because we already have possibilities in our minds.

In my experience, organisations generally rely too much on anticipation, which seems strange for a futurist to say.

The way I look at anticipation is to create scenarios – including some that the organisation hasn’t already foreseen – and to ask questions about them. This includes improbable and preposterous scenarios. Then we can ask three questions:

If this future happened, what would we do?
If this future happened, when would we do it?
How do we know when “when” is?

Then, we look at strategy in three ways:

What is clear enough in the present that we should take standard action according to our strategic or business plan?
What actions can we take where we manage risk while maximising options (developing capabilities, networks, brand, trust, etc) that will give us a head start if certain things happen in the future?
What things are important but unclear, so we cannot take action until we have greater clarity? Then, we build a scanning system to operationalise that through formal board processes.

Road ahead — Successful not-for-profits need a balance of anticipation and flexibility when looking to the future.

"For the things we do not anticipate, we need structures and governance that free us from sticking to a top-down strategy and push decision-making and responsibility more towards the edges of the organisation."

Let’s look at a recent example involving climate change. A few years ago, some not-for-profit organisations I worked for started seeing climate change as an existential risk in relation to funding.

The scenario they created was this: “If there is a big change in social attitudes to climate change, what happens to our funding base?”

The answer was that funding sources would flow more towards organisations trying to do something about climate change. These organisations could not change their central mission but could start doing things to reduce their carbon footprint faster to demonstrate they were not part of the problem.

Even organisations that were low on capital could enter into rent-to-buy arrangements for solar installations that reduced their costs while reducing their carbon footprint without weakening their balance sheets.

Here’s another example. Imagine your organisation is looking to expand into areas of operation that you anticipate might grow because of changes in government policy. As long as there is sufficient demand and funding, you can position yourself to rapidly take advantage of the policy change when it occurs, with little downside if it does not.

For the things we do not anticipate, we need structures and governance that free us from sticking to a top-down strategy and push decision-making and responsibility more towards the edges of the organisation.

A few years ago, I worked with a large not-for-profit organisation with a board that was very focused on building a five-year strategy they saw as being steadily rolled out with little change.

On the other hand, the management team saw the future as being far more changeable and complex. Emergent Futures helped them build a strategic growth plan with no growth goals.

Instead, they set down a rigorous set of principles that defined what type of funding opportunities they would take on. The authority to take them on was delegated to the leadership team.

The board role changed to taking more of a helicopter view to ensure that the leadership team did not stray off course by taking decisions that made sense individually but collectively caused mission drift. Despite having no goals for growth, the organisation grew almost 300% over the next three years!

Improving how you do this does not make any organisation perfect.

The worst approach I see is in organisations that believe rigorous analysis has reduced the irreducible uncertainty they face. I can name successful organisations that have done this, but they are successful because the future they thought was going to arrive has arrived.

This is like playing a board game by planning for a six to arrive when you throw a dice and then applauding yourself for being a strategist when a six comes up.

So, be aware of the weaknesses of any approach to foresight and strategy that you adopt.

Paul Higgins ([email protected]) is a futurist with Emergent Futures, and is chair of Social Venture Partners Melbourne, which assists not-for-profits that work with disadvantaged young people by providing pro-bono capacity-building and grants.