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Charlotte Amalie
Monday, August 15, 2022
HomeNewsArchivesSource Manager's Journal: Non-Profits -- Good News and a Warning

Source Manager's Journal: Non-Profits — Good News and a Warning

Here is the good news: Non-profit agencies in the Virgin Islands will have access to federal stimulus dollars, and the process is beginning. Based on what we know, not a minute too soon. These organizations provide some of the most important services and are essential to the community’s health and its sense of well-being. And, in the Virgin Islands and elsewhere, the threat to continued existence in this downturn continues to go largely unnoticed.
Now for the warning. The federal stimulus legislation is based on a simple — but unstated — assumption. This assumption is: However severe the current recession is, it is a "normal" one. That is, the economy will decline and then, as always, it will "recover" in a year or so. The "business cycle" lives on. Based on this belief, governments, business and the non-profit sector are receiving infusions of cash to get through this difficult period and to stimulate the economy to recover and grow. So, for non-profit agencies, the scenario is that they get stimulus money to get through the crisis. Then, as the economy rebounds, their funding sources will once again kick in, and things will return to normal.
Raise your hand if you believe that this is going to happen. These days, it often seems as if none of our leaders knows what to do. This may be because no one really does know what to do. And the reason for this inability to come up with answers is that this is not a "normal" recession or financial crisis. It is possible that most of the nation’s big banks are insolvent because they hold so many "toxic assets," and even the smartest people are at a loss as to how to solve the problem. Many families, which two years ago had steady income, a solid pension fund and a valuable home, now have none of these things. The credit-card default shoe is just beginning to fall. The "middle class" is a lot less middle than it was just a short while ago. And unemployment has clearly not peaked, although the stimulus money will have a significant positive impact in this area. An alternative to the standard assumption: Normal is not coming back anytime soon, and certainly not in the next two years.
We all make choices based on our assumptions. Often we don’t even examine or test these assumptions. And we all tend to fall back on what we know and what we are comfortable with. For example, it is fairly clear that President Obama’s economic team — all very smart mainstream people — are operating from a framework of what they think is normal. Except that what is happening is not in the mainstream, and their experience isn’t very helpful. New York state is faced with a crushing deficit. The New York state legislature, which makes the Virgin Islands Senate look like a model of Periclean democracy, cannot break out of its historic pattern of destructive incompetence. To take just one example, if there isn’t a reversal of this pattern very soon, the New York City transit system, the city’s lifeblood, will be put on the path to ruin. The assumption is that something will happen because it always has in the past.
Typically, the biggest wrong choices take the form of failure to choose. In good times, the corruption and incompetence of New York state’s government is a problem, but not a disaster. Now it is a disaster, largely because of an inability to make choices. Since we have elected these people, it is accurate to say that the citizens of New York have chosen failure.
For agencies — but also business and government — in the Virgin Islands, the danger of inaction is the same. It will be to view these dollars as a vehicle for some form of business as usual. Thank God the money arrived. Now we will be able to go back to doing what we were doing. That will be a big mistake.
The best approach in the current situation is to make maximum possible use of the available dollars and to plan for a future without them. There are two big questions: What are the probabilities? And what are our realistic choices? If we look at the history of failure, there are many explanations. But possibly the most common one is that, when confronted with choices, people were passive, did not act and events took over. They refused to change. Or, in more modern terms, they were never willing to get out of their comfort zones until events forced them out. And then it was too late. Anyone interested in this subject should read Jared Diamond’s Collapse: How Societies Choose to Fail or Succeed.
No one knows what is going to happen over the next several years. We live in a culture of cable-television hucksters and predictors who don’t even realize that they are totally discredited. What we can and should do is plan for a range of alternatives. One of these should involve what to do if the stimulus dollars are coming to an end, there has not been an economic recovery and it appears unlikely that there will be a new stimulus package. This is a worst- case scenario, but one that is distinctly possible.
Stimulus dollars should be seen as a window of opportunity. They must be gotten into the system and used productively. At the same time there should be planning for an optimal achievable future after this money is gone. This future, if it is achieved, is likely to be quite different from the present. It will include a clearer partnership with government, a stronger catalytic and brokering role for community foundations and United Way, and more sharing, pooling and integrating of functions, resources and services between organizations. For agencies and leaders accustomed to a lot of autonomy, these adjustments will be difficult. Compared to the alternatives, they will be very attractive.
Uncertainty about the future tends to freeze us in place. But failing to think and choose is a choice. It is almost always a bad choice. This is the time to move.


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Here is the good news: Non-profit agencies in the Virgin Islands will have access to federal stimulus dollars, and the process is beginning. Based on what we know, not a minute too soon. These organizations provide some of the most important services and are essential to the community's health and its sense of well-being. And, in the Virgin Islands and elsewhere, the threat to continued existence in this downturn continues to go largely unnoticed.
Now for the warning. The federal stimulus legislation is based on a simple -- but unstated -- assumption. This assumption is: However severe the current recession is, it is a "normal" one. That is, the economy will decline and then, as always, it will "recover" in a year or so. The "business cycle" lives on. Based on this belief, governments, business and the non-profit sector are receiving infusions of cash to get through this difficult period and to stimulate the economy to recover and grow. So, for non-profit agencies, the scenario is that they get stimulus money to get through the crisis. Then, as the economy rebounds, their funding sources will once again kick in, and things will return to normal.
Raise your hand if you believe that this is going to happen. These days, it often seems as if none of our leaders knows what to do. This may be because no one really does know what to do. And the reason for this inability to come up with answers is that this is not a "normal" recession or financial crisis. It is possible that most of the nation's big banks are insolvent because they hold so many "toxic assets," and even the smartest people are at a loss as to how to solve the problem. Many families, which two years ago had steady income, a solid pension fund and a valuable home, now have none of these things. The credit-card default shoe is just beginning to fall. The "middle class" is a lot less middle than it was just a short while ago. And unemployment has clearly not peaked, although the stimulus money will have a significant positive impact in this area. An alternative to the standard assumption: Normal is not coming back anytime soon, and certainly not in the next two years.
We all make choices based on our assumptions. Often we don't even examine or test these assumptions. And we all tend to fall back on what we know and what we are comfortable with. For example, it is fairly clear that President Obama's economic team -- all very smart mainstream people -- are operating from a framework of what they think is normal. Except that what is happening is not in the mainstream, and their experience isn't very helpful. New York state is faced with a crushing deficit. The New York state legislature, which makes the Virgin Islands Senate look like a model of Periclean democracy, cannot break out of its historic pattern of destructive incompetence. To take just one example, if there isn't a reversal of this pattern very soon, the New York City transit system, the city's lifeblood, will be put on the path to ruin. The assumption is that something will happen because it always has in the past.
Typically, the biggest wrong choices take the form of failure to choose. In good times, the corruption and incompetence of New York state's government is a problem, but not a disaster. Now it is a disaster, largely because of an inability to make choices. Since we have elected these people, it is accurate to say that the citizens of New York have chosen failure.
For agencies -- but also business and government -- in the Virgin Islands, the danger of inaction is the same. It will be to view these dollars as a vehicle for some form of business as usual. Thank God the money arrived. Now we will be able to go back to doing what we were doing. That will be a big mistake.
The best approach in the current situation is to make maximum possible use of the available dollars and to plan for a future without them. There are two big questions: What are the probabilities? And what are our realistic choices? If we look at the history of failure, there are many explanations. But possibly the most common one is that, when confronted with choices, people were passive, did not act and events took over. They refused to change. Or, in more modern terms, they were never willing to get out of their comfort zones until events forced them out. And then it was too late. Anyone interested in this subject should read Jared Diamond's Collapse: How Societies Choose to Fail or Succeed.
No one knows what is going to happen over the next several years. We live in a culture of cable-television hucksters and predictors who don't even realize that they are totally discredited. What we can and should do is plan for a range of alternatives. One of these should involve what to do if the stimulus dollars are coming to an end, there has not been an economic recovery and it appears unlikely that there will be a new stimulus package. This is a worst- case scenario, but one that is distinctly possible.
Stimulus dollars should be seen as a window of opportunity. They must be gotten into the system and used productively. At the same time there should be planning for an optimal achievable future after this money is gone. This future, if it is achieved, is likely to be quite different from the present. It will include a clearer partnership with government, a stronger catalytic and brokering role for community foundations and United Way, and more sharing, pooling and integrating of functions, resources and services between organizations. For agencies and leaders accustomed to a lot of autonomy, these adjustments will be difficult. Compared to the alternatives, they will be very attractive.
Uncertainty about the future tends to freeze us in place. But failing to think and choose is a choice. It is almost always a bad choice. This is the time to move.