RISK AVERSION

What can we learn from President-elect Barack Obama’s all-volunteer economic recovery advisory group that can be applied to non-profit organizations? The question they face is one many non-profits are asking themselves right now. Given the depth and breadth of our economic problems, will the new administration tackle issues of health care, education, energy independence, climate change all at once or stagger these major initiatives over time? For non-profits, do we add fundraising activities and fundraising staff or do we tighten our belts and make due with what we have or less?

Scrutinizing “the other guy” is an easy and cheap way to learn something -- how the experts behave, what thriving businesses do, how successful non-profits perform. This past Sunday’s New York Times was instructive in itself. Thirteen of the 22 pages of the front section of the Times had full page ads. Eleven of them were full-color, which is quite pricey. They are spending that kind of money during this time of hardship.

Certain economists underscore the need for a lot of federal spending. Sound like John Maynard Keynes? Dr. E. Kathleen Adams of Emory University explains that Keynesian economics, which helped pull us out of the Great Depression and stresses the use of government tools to stimulate the economy and direct government spending, is perhaps our most effective fiscal policy tool. This could mean businesses hire, families spend, and the entire economy thrives once again.

For non-profits, cutting back on fundraising is the best way to reduce your income. The paradox is, if we stop spending money to make money and stop investing in the future, we risk further hardship. Death by risk aversion!

http://recessionwatch.blogspot.com/ is sharing what is happening in other countries during this global recession. Feel free to share your experiences with them and with me. 847/227-7174 or Katmiller1000@aol.com