While the overall economy may not (yet) be at the same level of crisis as it was during the Great Depression, one thing is for sure—nonprofit organizations have never faced more precarious economic conditions. Whether we want them to or not, tough economic conditions lead to tough choices in how we operate our organizations. While there is no single ideal course of action to get through times as difficult as these, here are three suggestions for struggling nonprofits:
1. Put everything on the table. This means that there are no “sacred cows.” Everything should be considered for elimination, scaling back, or postponing. The more clearly this message is conveyed to staff, the easier it will be to convince them that tough choices aren’t being made arbitrarily.
2. Manage the fear of layoffs. This falls into the “easier said than done” category. Thanks to Blackberry devices, the rumor mill starts the minute that word is given that cuts will likely be made. Executives can alleviate the fear by being frank with staff about the possibility of staff cuts, and by being quick and decisive about which employees are cut. A work environment that is dragged down by the constant fear of “getting axed” will be unproductive—and will ultimately add to the financial challenges.
3. Look for creative ways to cut expenses. You might be surprised at how quickly cost savings add up when you implement reductions in the areas of travel (consider mandatory ride-sharing to appointments), office supplies (institute a paperless office environment), and staff training (limit multiple attendees at out-of-state conferences and consider using Internet-based training).
Has your organization been affected by the economy? What have you found to be the most effective strategies in dealing with the current economic struggles?
Note: This post is authored by guest blogger Dan Thompson. Dan has more than 17 years of experience serving a variety of capacities in nonprofit organizations in Lansing, Grand Rapids and Jackson. Most recently, he was Vice President of Annual Giving at Spectrum Health Foundation in Grand Rapids, where he was also responsible for grant seeking and management. Prior to his time with Spectrum Health Foundation, Thompson served as Chief Operating Officer at the Michigan Primary Care Association in Lansing, and in several program development and leadership roles at the Michigan Health & Hospital Association. He has a bachelor’s degree from the University of Michigan and a master’s degree from Michigan State University.