Constrained by Scarcity: “Eventually, somebody is going to lose out and I’m afraid it will be us.”
We grabbed a working lunch at Loveless Cafe to talk through expanding her nonprofit’s revenue streams. The CEO was as kind and thoughtful of a leader as you will ever find. Her gifts were evident, and the passion she had for leading her organization was rarely matched by other leaders. And like most key leaders, she breathed the mission and knew the impact of their work in the field. But there was a big problem involving the year to year revenue, and it burdened her. I am not kidding, her affect was flattened.
“Here’s the thing, John. Everyone around us is fundraising for good causes. You know how many good nonprofits are in Nashville. We aren’t getting new donors, and our longtime givers are starting to die. I don’t know if our work is still viable because there is only so much money to go around. Eventually, somebody is going to lose out, and I am afraid it will be us.”
The heaviness of the moment was real. I saw sadness and defeat in her eyes where just 5 minutes earlier I saw passion and vigor. She couldn’t imagine the mission she had dedicated her life to coming to a halt, but at the same time she saw no path forward with the pool of resources she was certain were scarce.
The next three posts are for the leader who needs a reframe–the leader that isn’t certain that available resources can keep up with the vision you have for your nonprofit. This word is for Heads of School, Executive Directors, CEO’s, and board members.
The nonprofit leader’s world is dynamic and complex, and the concept of scarcity often transcends the mere limitation of resources. It manifests as a mindset that can hinder growth and innovation. Consider for a moment the detrimental effects of a scarcity mentality on your nonprofit, your leadership, and your board. They are massive, and require breaking free from the constraining mindset before any growth can happen. To put it simply, the Executive Director’s problem wasn’t a revenue problem; it was a mindset problem.
Let’s make sure we are clear on terms. Scarcity is a mentality; it is a psychological state. This mentality is characterized by individuals or organizations believing that resources are inherently limited, leading to a constant fear of shortage and a reluctance to take risks. In the context of the key leader (or leadership team), this mindset can sour culture, moderate the loss of high-performing employees, and inhibit vision. In the context of nonprofit boards, this mindset can severely impact decision-making, hinder collaboration, and limit the ability to seize opportunities for growth.
Consider three ways scarcity may be impacting your nonprofit. These are typical, and it would not be a surprise if they feel familiar.
We don’t take risks: A scarcity mentality often leads to risk aversion, as key leaders and boards may be hesitant to invest in new initiatives or explore alternative approaches for fear of depleting already limited resources.
We aren’t innovative: Nonprofits who are trapped in a scarcity mentality may be resistant to innovation, sticking to traditional methods and missing out on opportunities for creative solutions to complex problems. This is particularly problematic for boards. (Jaskyte, 2012, 2015; Jaskyte & Holland, 2015)
We stopped collaborating: The fear of resource scarcity can strain relationships and collaboration within and among nonprofits. Leadership may be reluctant to share knowledge, pool resources, or engage in partnerships, believing that doing so may diminish their own limited assets.
It’s like I have been sitting in your boardroom since March of 2020, right? The truth is, it would be a waste of time to write a lengthy post if this were a “unique-to-you” challenge. So take heart, this is a mindset that shows up in vision casting, advancement meetings, and Executive Committee of the Board gatherings fairly regularly. You are not alone, and there is a breakthrough pathway you can trust.
Establish an UNBOUND mindset: When perception is often reality, then you have a lot of power to reframe your circumstances, posture, and mindset. Shifting from a scarcity to an abundance mindset is crucial. Nonprofit leaders should recognize that resources can be expanded through collaboration, innovation, and strategic partnerships, fostering an environment of abundance.
Take a risk. Even just a little one: This is your first step to embrace strategic risk-taking as an essential component of growth. Nonprofit boards and leaders should assess risks thoughtfully, recognizing that calculated risks can lead to new opportunities and increased impact. This is an area where boards should challenge leaders, and leaders should challenge boards. When both groups step up to that challenge, all waters rise. (And you know our affinity for “Watch for rising!”)
Open what is closed. Be innovative: Key leadership must encourage a culture of innovation within the organization. You set the tone for how everyone else will approach new paths. This starts with the board. Nonprofit boards should be open to new ideas, technologies, and approaches that can enhance efficiency and effectiveness in fulfilling the organization's mission. Be compelling (if not outright aggravating) in your unending quest of innovation in the organization you serve.
More of “we”: Nonprofit leaders must foster collaboration as a nonnegotiable practice. Your number one priority should be to break down silos and foster collaboration within your organization and among other nonprofit organizations. By working together, teams can share ideas, boards can share resources, the sector can share knowledge, and everyone can benefit from shared expertise. Be unyielding in your pursuit of creating a collective impact that goes beyond what any single organization could achieve alone.
Throw a party (but don’t buy everyone pizza and think that is celebration): When fighting through a scarcity mindset, you must acknowledge and celebrate successes, no matter how small. By focusing on achievements, nonprofit leaders can shift the organizational culture toward one that is optimistic, resilient, and forward-thinking. Why not throw a party (no, not an employee appreciation pizza party)? Affirm the good that is happening, and then watch for more of it to follow.
So what do we do first?
The first step is internal. It is realizing that scarcity is born in the self…that autonomous place just underneath your skin…and that you have all the power to break through the mindset.The scarcity mentality is a self-imposed limitation that will certainly hinder the potential of your nonprofit. And once you have done the self-work, it is time to work together. The leader and the board must actively work together to break the system free from this mindset, embracing an abundance mentality that encourages innovation, collaboration, and strategic risk-taking. By doing so, nonprofit leaders can pave the way for sustained growth, increased impact, and a more resilient and forward-looking sector. Remember, abundance is not a destination as much as a mindset that propels nonprofits toward a brighter and more sustainable future.
Jaskyte, K. (2012). Boards of directors and innovation in nonprofit organizations. Nonprofit Management and Leadership, 22(4), 439–459. https://doi.org/10.1002/nml.21039
Jaskyte, K. (2015). Board of directors and innovation in nonprofit organizations model: Preliminary evidence from nonprofit organizations in developing countries. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 26, 1920–1943.
Jaskyte, K., & Holland, T. (2015). Nonprofit Boards: Challenges and Opportunities. Human Service Organizations: Management, Leadership & Governance, 39(3), 163–166. https://doi.org/10.1080/23303131.2015.1035612
