Environmental Factors Affecting Nonprofits

by Floyd Rumohr

“Danger Will Robinson!” is a familiar phrase I recall from the 1960s sci fi television series, Lost in Space. The space family who was alerted to scientific samples or dangers lurking behind shadows commonly referred to their dutiful robot as “environmental.” And for good reason.

Businessdictionary.com defines an “environmental factor” as an “element…that affects the survival, operations, or growth of an organization.” The aptly named Robinson robot would analyze planetary atmospheres to determine life-support capabilities and wildly wave its arms to warn if danger was detected.

I don’t know of any nonprofit that has an environmental robot (please alert me immediately if you know of one!), but organizations that have some sort of equivalent system to analyze and monitor the factors that could affect them will be most able to adjust to new conditions.

For example, forces that could act upon a local health care clinic include federal legislation such as the Affordable Care Act. An opportunity for growth could be found in what is commonly referred to as the individual mandate by assisting low income residents in the area to find appropriate coverage. A threat could arise from the projected national shortage of 63,000 doctors by 2015 and 130,600 by 2025 according to the Association of American Medical Colleges. A key strategic question for this clinic would center around its ability to compete for health care talent.

In the case of a community based theater company, for another example, key indicators in the environment could be population growth and changing demographics. Strategic planning for change might include programmatic adjustments that reflect the evolving community or allocating resources that build relationships with emerging organizations and businesses.

An essential question that I like to ask: What indicators are there that could positively or negatively act upon the organization? Be honest and courageous in your responses to this question and make sure the information is credible. If yours is a health care nonprofit, for example, understanding the entirety of the Health Care Act and not relying on what people say about it is essential to responsible organizational leadership.

A good tool for this is a SWOT (strengths, weaknesses, opportunities, threats) analysis, which looks at forces internal and external to the organization. But be cautious. DO…listen to you inner environmental robot and corroborate information, be courageous, and ask hard questions. DO NOT just fill-in empty boxes or make assumptions particularly as far as strengths are concerned. Claims about your program(s) that simply aren’t true or are exaggerated can be an internal threat to credibility and is far from the honest look required from organizational leadership.

Why not add Environmental Factors as an ongoing agenda topic for quarterly board meetings? Sustained analysis provides necessary information that enables organizations to navigate safely and sensibly in a world that is changing faster than ever before! By doing so, leadership decisions will be based more on facts, less on fantasies, and enable the organization to stay on course.

Next up: competitive advantage.

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2 comments
  1. Environmental update: Goldman Sachs predicts the U.S. will grow 200% from now through 2050. The BRIC countries (Brazil, Russia, India, and China) are expected to grow 1700% during that same time period. How will U.S. based nonprofits be affected if the U.S. is not the economic super power is has been for decades?

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