 |
||||||||||||||||||
 |
Nonprofit execs no longer doubt that funding support will drop; the question is how much and what can they do to mitigate the impact. The financial turmoil these last few weeks has captured everyone's attention. Foundations must balance funding commitments against endowment losses; government agencies at all levels have to reduce budgets; venerable corporations are disappearing, merging or already cutting back; and many individuals are struggling to keep afloat. Organizations as diverse as the United Way of NYC, Harlem Children's Zone, and City Harvest have spoken out publicly about how they are dealing with the implications of Lehman's bankruptcy and the Merrill Lynch - Bank of America merger. We devote this issue to what nonprofits can do during the economic downtown so that the people they serve continue to get quality programs and support. Please let us know what you are doing so we can share your best practice with others. Focus, Focus, Focus Nonprofits serve their communities best when they identify the fundamental services they excel at and apply resources and energy to them. Successful leaders don’t get distracted by ancillary programs or activities. Identifying which services are core to your mission, and which aren't, will help you decide where to reduce expenses, what staff activities are less important, and where you want to concentrate to make sure your priority programs get even better. Focusing the board, management, and staff on fundamentals will ensure the agency uses your limited time and energy most effectively. Executives need to reduce the number of balls they are juggling so they can pay more attention to fund-raising (particularly funder/donor relations), watching expenses more closely, and to demonstrating programmatic impact. Clearer, narrower job descriptions can help staff be more productive and less easily distracted. The temptation will be to delay filling non-essential staff positions. Consider carefully the unintended consequences of your choices. Now may be the time that you really do need to hire that development associate or fill the HR job so you have the needed resources to support your programs. It is always a challenge to find the right balance between organizational and program capacity, and the requisite funding to support both. Improve Your Cash Flow Bringing your expenses in line with your revenue is a key factor to financial sustainability, but making sure you have a positive cash flow is actually more important. Work with your CFO/controller to make sure you maximize your cash flow. It's not glamorous, but it is critical to an organization's longer-term survival. Your financial manager can work with you and your program directors to speed up the cash coming in the door in several ways:
Work to Maintain Donor Interest Many nonprofits are adjusting their fund-raising strategies, particularly for individual donors. Some are delaying capital campaigns, concentrating instead on current operating needs. Or they are deferring fund-raisers until the new year, after the election and when they hope markets will be calmer. Others are seeking matching grant funds or are shifting to more lower-priced giving opportunities to encourage donors. Some nonprofits are cutting development expenditures to maximize net revenues. They are reducing the number of mailings and using those savings to launch a "giving thanks" appeal. Agencies are reducing their event expenses, reflecting the growing trend away from ostentation and even encouraging donors to hold more intimate fund-raising dinners at home. Forecast Ahead and Plan Accordingly Make realistic projections frequently throughout the coming year to assess where you are against what you budgeted so you can take steps accordingly. For example:
If you don't think you can generate the resources you need based on your projections, consider moving the under-funded program to another agency. You serve your clients better by moving a program than by trying to hang on in difficult times. While this is an extremely difficult decision for you and your board to make, the sooner you face the financial realities, the more flexibility and time you have to explore options and arrive at the best solution for your clients, your staff, and your entire community. We Want Your Suggestions! Let us know whether or not you find our newsletters helpful and why, so we can improve, too! And we'd love to hear from you about suggestions for future issues. View printable version of this newsletter.
|
 |
||||||||||||||||
 |
||||||||||||||||||
