Moving Beyond the Scarcity Mindset

A common mindset in the nonprofit sector is that of scarcity. Meaning, there is a preoccupation with a perceived lack of resources. When you focus on limitations, it hinders your success and your organization’s effectiveness. So, if you’re finding yourself in a place of limiting beliefs, here's how you can overcome it.

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This episode was brought to you by Songbird Leadership -- Amplify your organization's mission through outcome-based executive coaching, strategic planning, and capacity building.

Transcript

Thank you for joining us today. I’m your host, Jill Fowler of Songbird Leadership.

Mindset is so important because it shapes the way you interact with the world. It influences your behavior, affects your mental health, impacts your relationships, and ultimately drives your success. 

A common mindset in the nonprofit sector is that of scarcity. Meaning, there is a preoccupation with a perceived lack of resources, typically money, but sometimes this belief can spread to human, intellectual, and physical resources, as well. These limiting beliefs can develop due to a variety of reasons. Maybe you’re used to operating with limited or unstable funding. Or, while you have great passion for your mission and programs, you lack business acumen. Or, maybe you fear failure and you’ve become risk-averse as a result. Whatever the reason, when you focus on limitations, it hinders your success and your organization’s effectiveness. Here’s how.

Leaders with a scarcity mindset can have a limited vision of what’s possible for their organization and their team. They focus on constraints, rather than innovation and what’s possible. How many times have you heard someone say, “We’ve tried that before and it didn’t work?” It’s deflating and frustrating to the team, and it hinders progress and creativity. Sure, it may not have worked in the past, but who’s to say it might not work today with some retooling? Nonprofit leaders must not only have a strong vision, but also effectively lead their team toward it. If a scarcity mindset is lurking, that vision and the efforts behind it will be stunted.

Related to this is a short-term focus. Leaders with a scarcity mindset can be hyper-focused on immediate needs, rather than a long-term, strategic vision. They literally go from crisis to crisis and, as a result, don’t have the bandwidth for sustainable progress. 

Another way the scarcity mindset can impact your productivity is that it promotes fear-based decision making. I have seen this manifest two ways. First, and most prevalently, is risk aversion. Risk-averse leaders can become so overly cautious, they become almost paralyzed when faced with an important decision, miss out on opportunities, and stagnate. Or, they go the opposite way and make knee-jerk decisions without properly assessing the situation and then things blow up due to their haste. Either way, fear-based decision making will not result in a healthy, sustainable outcome.

The scarcity mindset can also lead to hoarding behavior. These leaders are so afraid of running out of resources, they prohibit the use of them. This typically appears with money and budgeting. I once worked in an organization that relied heavily on a levy for funding. The organization was highly valued in the community and voters had never not passed a levy in their favor, yet during the year prior to each levy, the leaders took on a scarcity approach to budgeting. Only mission-critical expenses were approved, there was a hiring freeze, programming was limited to the basics, and staff had to provide their own office supplies. Not a penny was spent that wasn’t required to keep the doors open. And this was an organization with a nine-figure budget. Staff and volunteers all felt the squeeze and it became a long-running, internal joke. And I’m sure the community felt it, too, so maybe it was a tactic to ensure levy passage, I don’t know. But either way, there’s a difference between being responsible with resources and hoarding. The latter will prevent growth and stunt efficiency. And, as with the organization in my example, negatively impact morale.

My final example of where the scarcity mindset can appear is in fundraising. If you truly believe that there aren’t enough funds out there to go around, you’re apt to be less ambitious in your fundraising efforts and your confidence may suffer. I had a client who was invited to apply for a $100,000, unrestricted grant. Her organization was recently incorporated, and this would have been her largest grant application to date. She waffled at the invitation and was considering only applying for half of the full amount. I asked her why she wasn’t going to apply for the full hundred, especially since the funder personally invited her to do so, and she said that funding was so limited in our area, she felt badly about requesting the full amount. First, her belief about the limited funding simply wasn’t true. Second, her self-sacrificing behavior wasn’t going to help her or her organization or her clients. (We’ll have an episode all about self-sacrifice soon.) After some coaching conversation, she applied for and was awarded the full amount, but it was not without some angst on her part. Unfortunately, the scarcity mindset makes it easier to settle for smaller fundraising goals and accept less than you would otherwise, which certainly isn’t helpful for your organization’s sustainability.

As you can see, the scarcity mindset can really create a negative culture and get in the way of your success. So, if you’re finding yourself in a place of limiting beliefs, how can you overcome it? 

Well, it starts with self-awareness. Reflect on your thoughts and behaviors in a scarcity context. Are you more fixed or growth-oriented? Do you feel more empowered or limited? What are your patterns? Describe your comfort zone and consider its implication on the strategic direction of your organization. Once you have identified specific areas you wish to develop, set SMART goals for yourself and celebrate every win. A coach can help you with this process.

Once your self-awareness muscle is flexing, take a moment to observe any negative thoughts that may pop into your head surrounding scarcity. Purposefully replace these thoughts with those of possibility, potential, and opportunity. Do your best to adopt a mindset of abundance and gratitude. Surrounding yourself with others who have this perspective is also a helpful option, as they’ll be a positive influence. It may seem totally foreign at first, but over time, you’ll get more comfortable with it.

You can also encourage innovation among your team. I once worked in an organization that was truly having critical financial problems. Scarcity wasn’t their mindset; it was their day-to-day reality. The leadership asked every employee to provide at least three suggestions for either increasing revenue or cutting costs and then held one-on-one meetings to discuss. Some truly great opportunities came from this exercise—creative solutions that wouldn’t have been considered otherwise. 

Another method of overcoming scarcity is through strategic planning. Planning, when done right, can force you to consider the longer-term, collaborate, and seek solid strategies for the future sustainability of your organization. The act of strategic planning will also make you a more naturally strategic thinker, which is another great byproduct. When you’re a truly strategic thinker, there’s no room for scarcity.

Finally, embrace your challenges and treat them like opportunities. Sure, things might not turn out the way you expected, but you can learn from them and become more resilient and resourceful in the future. 

Overall, a mindset change is a process. And trust that process. (Yes, I said it. Those of you who know me know I love saying that.) But by shifting from a scarcity mindset to one of opportunity and abundance, you’ll realize a broader vision, new methods of innovation, and opportunities for the ongoing sustainability for your organization. The possibilities are endless.