At the risk of going against the crowd, I’d like to add my perspective to the Idealist crisis. Idealist.org is a job site for nonprofit organizations that has been around for 10 years. It’s a great site that brings nonprofit organizations and aspiring nonprofit job seekers together. It has launched many a great career, including that of Rosetta Thurman, nonprofit consultant and Gen Y leader who is a huge supporter of the site.
Earlier this week Ami Dar, Executive Director of Idealist, sent out an emergency appeal for funding to Idealist supporters. It seems that the recession has taken a serious toll on the nonprofit organization, and they are desperate for funding to stay afloat. Ami’s impassioned appeal has made its way around social media sites and raised quite a stir. They are hoping it will bring in some serious donations. And it seems to be doing that–you can see the running tally of recent donations on their homepage.
I admire what Idealist does and think they serve a real need, but with this campaign they are making a mistake that nonprofits sometimes make when they hit a crisis like this. An appeal for emergency funding can raise quite a bit of money, for a time, but then what? What is the long-term plan? How will Idealist overcome the obstacles that got them to this place so that they can emerge stronger, more effective and more financial sustainable in the future?
In his appeal, Ami says that the weak economy got them to this place because of a significant decrease in job posting revenue over the past 16 months. That is completely understandable. But over those past 16 months what has Idealist done to diversify their funding model? What has been the result of those changes? And what are their plans for the future? Ami is fairly vague on these points:
Very briefly, here’s what happened. Over the past ten years, most of our funding has come from the small fees we charge organizations for posting their jobs on Idealist. By September 2008, after years of steady growth, these little drops were covering 70% of our budget. Then, in October of that year, the financial crisis exploded, many organizations understandably froze their hiring, and from one week to the next our earned income was cut almost in half, leaving us with a hole of more than $100,000 each month. That was 16 months ago, and since then we’ve survived on faith and fumes, by cutting expenses, and by getting a few large gifts from new and old friends. But now we are about to hit a wall, and this is why I am reaching out to you.
I understand why they are in this position. But what I don’t understand is how they are going to get out of this position after the emergency funds that they are attempting to raise dry up. According to Ami, their plans for the future are:
If in the next week or two we can reach everyone who’d give us a hand if they knew we are in trouble, I believe we’ll come out of this crisis even stronger than before. I believe this because while this has been a tough stretch, I’ve never been more optimistic about the future. The content on Idealist has never been richer, our traffic is surging, we are building a whole new Idealist.org that will be released later this year, and the potential for connecting people, ideas, and resources around the world has never been more urgent or more exciting. Your contribution will allow us to maintain all our services…and it will also give us some time to diversify our funding. Being able to breathe, recover, and plan ahead for a few months will be an incredible blessing.
If Idealist hasn’t been able to figure out financial sustainability in the last 16 months, why should I think that they will be able to do it in “a few months”? And scarier still is the fact that economist are predicting that the jobless economic recovery will continue for the foreseeable future. So I’m not sure “a few months” is really going to change things all that much.
What I would like to see from Idealist is a bold plan for action, a revamped business model that will allow them to continue to provide needed services to the nonprofit community in a financially viable way. Emergency funding is great, but only if it is a stop gap measure that will get an organization through a very specific, finite period of time and that on the other side of the crisis is a new business model for a viable way forward.
I think the nonprofit sector can learn something from Idealist’s crisis. There are many other nonprofits in this same position. And many who are contemplating or have launched an emergency appeal. But keep in mind, you can only cry wolf once. So while you are working to stay afloat, you also need to be taking a hard look at how to radically change your approach, your business model, your funding streams. And you need to put those changes into a comprehensive plan and communicate that plan to your funders. In that way, you all will know that you won’t be back here again.
UPDATE: The Tactical Philanthropy Blog hosted a debate between Nell Edgington and Rich Polt from Louder Than Words about the Idealist appeal. You can read the debate and comments here.
Let me start by saying I love idealist.org. I have used them since the early 2000’s when I was in undergrad. They’re a great resource for those interested and passionate about the non-profit sector.
I am also very pleased you wrote this post. I received Ami’s passionate appeal via email earlier this week (or last?). As I read it my thoughts mirrored yours, however they weren’t nearly as eloquent. My gut reaction: idealist.org is asking for a bailout in the same way the government bailed out the big banks.
Idealist is a GREAT resource, BUT in the changing business environment they must change their business model as Nell suggests to adapt to a changing market and changing business realities. Finding new revenue sources and implementing new business and funding models is not easy. But in bailing out idealist.org, how are we promoting fiscal responsibility of our non-profit sector? I want and expect more from non-profits.
I would challenge those who love Idealist to inundate them with new business model and revenue model suggestions. Who knows, maybe YOU can say you were the one that gave idealist a new way to generate revenue and kept them serving the non-profit community for the next ten years.
Stacy,
Your comparison with the bank bailout is a great one. Why sink money into an old model that doesn’t work anymore? The market is obviously demanding change, so let’s take advantage of that opportunity. And I love your idea of crowdsourcing a solution to Idealists’ plight. Let’s see what happens.
Nell,
This is the second post of yours I have read. As a consultant who has over 20 years of experience working in the social sectors, I like the way you think! After reading this article, what I hear Idealist needs to do is make their case by showing they have clarified their idea of what they are passionate about, what they can be the best in the world at and what drives their resource model. The intersection of those three things is their sweet spot. That is what they should be working on promoting. I am not at all familiar with this organization, but I suspect that they need to create or revisit their strategic plan, mission and vision. And, in times of crisis, it is so difficult to take a step back and do what is important instead of being distracted about what is urgent. I wish Idealist all the best!
Hi Neil and Stacy,
Thanks for taking the time to write this. I am sorry I can’t answer all your questions right now, but just a few things:
– I am not sure that an email appeal was the best place to lay out all of our alternative plans for the future.
– The banks were bailed out by the government, using tax-payer dollars. We asked our community – people who have benefited from Idealist over the years and believe in what we do – to give us a hand in a tough moment. We have helped hundreds of thousands of people over the years, always for free, so I don’t think that asking for help once in 15 years is a terrible thing. So far, 4,000 people have stepped up, with donations averaging $30. I think that’s a great thing for a community to do, and I am glad we asked.
– We have received hundreds of suggestions for what we should do, ranging from, “you should go to the Foundation Center,” to much more sophisticated ideas. We are looking at all options, but we need a few months to implement them, and we will.
Thanks!
Ami
Ami,
Thanks for writing and for being open to this dialogue. I applaud your willingness to engage in debate during what is, I’m sure, a very difficult time.
I wasn’t suggesting that you lay out all of your plans for the future in your email appeal. Rather, I’m suggesting that you signal to your supporters and donors that you have undertaken a complete review and restructuring of your business model so that you can emerge from this crisis on a whole new path.
And I don’t think you should just be “implementing ideas,” rather, I think you should be coming up with a completely new business model and new strategic direction. Perhaps that is in the works, but I’m not hearing that.
Hi Ami,
So great to hear your response! I am glad that you have community support, as you should after all your years of assisting the non-profit community and bringing people together.
While I understand the reason you took your plea to the idealist community, I do feel asking for such support is a slippery slope (hate the term, but am using it anyway) and a tactic that if utilized broadly in the non-profit community would hurt us all.
I truly look forward to what Idealist has in store and how you adapt to the changing landscape in which we are all learning to operate.
Stacy
Thanks again! And yes, for us, at least, this was/is a once-in-an-organizational-lifetime kind of appeal, and I definitely don’t want to be in the same place again. And yes, we do have a new strategic direction – to complement the current work – but it still needs some work, so we had to do this now.
Thanks again!
Ami
I find the advice being given to Ami a bit condescending and self-congratulatory. Ami Dar has built an extremely effective organization from nothing. I am quite confident that he is WAY ahead of the kind of rudimentary advice that is being offered here. How can one make assumptions about what Ami is not doing and then criticize him for it?
Let’s give Ami the breathing room he needs, and the confidence he has earned, to do what he does best. I see this thread as taking away from his valuable time and the public confidence that he has earned.
Steve,
I think it remains to be seen whether Ami and his team have a strategy, beyond an emergency appeal for funding, for getting out of the crisis that Idealist is currently in. I really hope that they do because I think Idealist provides a very necessary service.