To the surprise of pundits and polls, Donald Trump will be the 45th president of the United States. Regardless of your personal feelings about that event, a Trump Administration dramatically shifts the risk landscape for nonprofits. Here is what you need to do right now.
Predicting the Unpredictable – Likely Impacts of a Trump Presidency on the Nonprofit Sector
Donald Trump ran a campaign surprisingly lacking in specifics. Indeed, Mr. Trump’s appeal was based on his promise to shake up the status quo and respond to voter discontent. Many of Mr. Trump’s signature themes – including mass deportation, building a wall along the Mexican border, tearing up trade agreements, and rebuilding factory production in the Rust Belt – may never gain footing. The Beltway politics of contesting interest groups will undoubtedly inhibit some of Mr. Trump’s plans. Others will founder as other nations refuse to submit to US demands and bluster. Broader economic forces, moreover, make it unlikely that we could ever re-create the US manufacturing behemoth of the 1950s and 1960s. But three elements of the Trump campaign are quite likely to have broad impact early in the Trump Administration.
First, the Affordable Care Act – Obamacare – is unlikely to survive in its current form. With a Republican House and Senate and a Republican president all demanding Obamacare repeal or defunding in whole or in part, healthcare change is nearly inevitable. Furthermore, it is uncertain what a (if anything) may be adopted by a Republican Congress to replace Obamacare provisions. This has two practical consequences. Operationally, nonprofits who have struggled to react to Obamacare’s impacts on their own organizations will face substantial uncertainty as Obamacare is removed from the health care landscape. More poignantly, vulnerable service populations of nonprofits who cannot otherwise afford health care may soon find themselves again without a healthcare safety net. Social service nonprofits will face new demand for services as events that would have been mere health care challenges for families with Obamacare become health care crises in its absence and cascade into other areas of a victim’s life.
Second, a Trump Administration is likely to reduce or eliminate a wide range of government regulations. This shift toward more limited government will affect not only health care, but the environment, financial services, workforce rights, and other areas commonly addressed by nonprofits. As government engagement scales back, advocacy and action will necessarily shift to the nonprofit sector, creating budgetary strains and imposing tough choices among competing priorities.
Third, even if some of the more frankly egregious aspects of Mr. Trump’s anti-immigrant rhetoric never materialize into law or policy, immigrant populations will feel a strain under the Trump Administration. Hostility, hate crimes, and anti-immigrant law enforcement will become more prevalent. Again, particularly in regions where local governments cannot or will not take up the slack, nonprofits will be forced to shoulder greater protection of vulnerable populations.
What To Do Now
With such clear changes ahead, nonprofits should take three steps immediately to prepare themselves.
Inventory Your Risks. Perform a risk inventory of the threats and opportunities facing every functional area of your organization. If you don’t know what risks your organization currently faces, you don’t know how to effectively utilize your existing resources. A risk inventory is an inexpensive investment that pays substantial dividends in clarity and peace of mind.
Build Reserves. While addressing short-term needs, remain focused on long-term sustainability by building reserves. Because they address populations who have limitless demand for the services they offer, many nonprofits already live hand-to-mouth. They spend resources as fast as they raise them. As demand for services increases in response to Trump-induced changes identified above, resist the impulse to expand existing service offerings or develop new services. Remember that your stakeholders include not only current recipients of your services, but also future recipients and others who depend on your organization’s continuity in your community. If you don’t bank reserves that can protect your organization from unexpected events, you put your mission at risk.
Explore Combinations. Size can enhance safety. In many communities, numerous nonprofits provide overlapping or complimentary service offerings. This can create uncertainty for the recipient seeking services, and often creates duplication and inefficiencies in a service market. Now is the time to explore partnerships, acquisitions, and mergers. By combining staffs, eliminating duplicative programs, and generating synergies, nonprofits can increase their resilience while helping their target populations face a less bewildering service environment. Task your board and executive team with exploration of how you can partner or combine with similar organizations to increase your financial and organizational strength and sustain your mission in the face of a risky and rapidly shifting nonprofit context.
The Trump Administration is coming. Do the right thing by adopting sound risk management basics now. As you take those steps, consider these resources:
Blog Posts on risk inventories and questions to ask during a risk inventory:
Questions on operations, IT, and finance, volunteers, compliance and risk management, talent management and reputation management, “sales” to service recipients, development, planning and visioning, and governance.
Podcasts about risk inventories and prioritizing risks:
Podcasts about beginning risk management:
[Note: an updated version of this post may be found on LinkedIn’s Pulse feed: https://www.linkedin.com/pulse/trump-presidency-raises-risks-nonprofits-heres-what-do-ted-bilich?published=t]