Nonprofit Organization Survival Tips:
Surviving and Thriving in Tough Economic Times
Seth Bloom, Bloom Consulting, Inc.
Recession, inflation, deflation, correction, etc., whatever you want to call what we’re going through the simple fact is that many of us have already made adjustments at home and in our businesses, and most of us may need to consider further belt-tightening in the near future. As community leaders, many of us are also wrestling with the impact this economy is having on our nonprofit organizations. As consultants specializing in nonprofit fundraising, strategic planning, marketing and leadership development, Bloom Consulting has had extensive experience with the financial challenges that all nonprofits face from time to time, and we recognize the difficulties that the current situation poses. Fortunately, we believe there are ways to reduce its impact and insure that your nonprofit not only survives, but thrives, in the days ahead.
This list is for anyone with a common sense approach to surviving and thriving in tough economic times. While nonprofit organizations should consider many of these initiatives, they may not all apply to every nonprofit. Yours may have already adopted some, while others may seem too simple or too difficult. Chances are you’ll find a few here to consider, and undoubtedly others will stimulate your own creative ideas.
The Big Picture
Don’t panic! The good news is that nonprofits have weathered economic storms before. That being said, we all realize this will be a challenging period.
Many of the recommendations translate into cutting back, or asking more of others. Fortunately, not everyone is being as adversely affected by the economy as others, and some may even be doing quite well. Keep in mind that some people can and will respond by doing more.
Communicate! Keep your supporters and staff informed about actions you’re taking and how they can be part of the solution, whether through their increased financial support, or simple things such as turning off lights when they walk out of a room or wearing a sweater inside the building since the heat is turned down a few degrees.
Ask your staff and volunteers to offer suggestions of ways to save money or raise funds. Instill a sense that the organization is theirs… and that its challenges are theirs to meet. .
Don’t be penny wise but dollar foolish. If the roof needs fixing and neglecting it will only cost you more in the long run. Bite the bullet. Compelling needs will be supported.
Mindset/Behavior Changes:
Ask a volunteer (or a few) to host or underwrite a social reception for distinct groups such as long-standing contributors, seniors, young families, etc. Doing so can shift some of the financial burden off of the organization budget, and you’re offering these groups something for nothing – a great way to demonstrate appreciation, increase involvement, strengthen retention, etc.
Everyone should have a will and everyone can include something for their favorite nonprofit organization, even if it’s contingent upon any money being left after other bequests have been made. Leadership should set the example by signing Letters of Intent. Just imagine how much easier this tough economic period would be if generations before had established a sufficient endowment fund generating supplemental income. This is our obligation for generations to come.
Maximize all recognition opportunities, whether for financial contributions, in-kind services or volunteer time. While public recognition – honor roll lists, plaques, etc., – is very effective, it’s not the only option and other ways are also greatly appreciated. Sometimes a handwritten note or phone call to say “thank you” will go a long way. Inspire others and positively reinforce desired behaviors through lists, stories, announcements, etc.
You may need to use your line of credit from the bank to get through some rough periods. If you don’t have a line of credit, don’t assume it’s impossible to obtain one now. While credit has been extremely tight and lines of credit may generally be less available than they were prior to the downturn, if your nonprofit has a good relationship with its bank, you should be able to obtain one. If your credit worthiness is shaky, consider asking individual financial supporters to co-sign on your behalf.
Consider “borrowing from yourself.” Your organization’s rainy day may be here, so it’s OK to access endowment/reserve funds, ideally with a plan to repay the borrowed amount for a future rainy day.
Remember, not everyone is being adversely affected by the economy. Form a Task Force to identify real needs and identify potential sources of funding. Develop a menu of programs to address the identified needs and make them available to select prospects for funding. For example, the need for program expansion or facility enhancement may resonate particularly well with potential donors.
Don’t apologize for asking for support or for considering cost savings. To the contrary, supporters will want to know you’re being good stewards of their support.
Keep in mind, if you don’t ask, the answer is always “no.”
Cost savings:
Where possible, renegotiate terms on longstanding contracts as they come up for renewal. Shop around.
Minimize postage. Consolidate mailings and ask supporters and members to receive information such as your newsletter, membership directory and program announcements through e-mail.
If your organization doesn’t do so already, require reservations in advance for events where food will be served so excess food won’t be ordered. Consider rescheduling/canceling programs with limited interest. Charge people who register but don’t show up.
Install a thermostat timer and zoned heat/air conditioning. Install light switches with motion sensors, programmed to turn lights on when someone enters a room and turn them off after not sensing any motion in the room after a few minutes. These are particularly cost-effective in bathrooms!
Educate your staff about your monthly utility bills and, where practical, challenge them to help reduce the bottom line. For example, encourage everyone to wear a sweater in cooler months and turn off their computers at the end of the day. Communicate monthly results.
If a vacant position can be left unfilled for the time being without adverse consequences, consider delaying the hiring. In extreme cases, you may need to consider a temporary salary/hiring freeze and/or layoffs. Consider using an intern and/or volunteers rather than hiring a new staff member. Inform your staff about volunteer opportunities that may otherwise require hiring someone … office personnel, lawn maintenance, etc. There may be recently unemployed individuals associated with your organization who would welcome the opportunity for meaningful volunteer work.
Consolidation and collaboration can produce significant cost savings. For example, a small class could become one class. Co-sponsoring events will enable your organization to share expenses while increasing your exposure to a new constituency.
Consider bulk purchasing of staples such as cleaning and office supplies. Band together with other nonprofit organizations in order to negotiate lower fees.
Establish a co-op program offering all affiliates opportunities to serve the organization through service or to pay a nominal fee. Service can include committee work or actual hands-on cost savings services, but ultimately, your supporters will be more engaged – and committed.
Evaluate every program … question everything. If only a handful of people are coming to a particular program, perhaps it’s time to eliminate, modify, or at least to readjust the number of times the program is offered.
Take advantage of every store program offered to nonprofits … supermarket scrip, free credit card programs, etc. Establish a committee of your thriftiest shoppers to manage this effort.
Increase income:
Identify and prioritize, distinguishing real needs from things that would be nice to have or do. Secure funding for these needs, whether it be through a “quiet campaign” among supporters or through an organization wide campaign.
Your board should be the best informed group regarding the impact of the downturn, and board members may be among the most inclined to make additional elective contributions. Consider asking board members to make a contribution toward a defined goal, as if there were a mini-campaign. The goal could correspond to a budget shortfall or the amount needed to preserve an important program, as long as the things to be paid for are among your identified needs. Depending on magnitude of the needs, consider approaching select major donors. If the goal is substantial enough to require universal support, publicize after 50% or 60% of the goal is reached, and state the challenge to make contributions toward reaching the total goal.
Have leadership – officers, board, staff – identify 1 – 3 people perceived to have significant wealth and/or access in order to nurture/establish a relationship, identify areas of interest, and ultimately ask for their support.
Identify potential new donors by considering people formerly affiliated with your organization, relatives of current supporters, donors to similar organizations, etc.
Consider a single, annual ask for your potential major donors to help support operations of the organization rather than solicitations for every event/initiative. Price it high enough to cover the cumulative of top categories of every event. Don’t solicit these people again, but invite them to attend and recognize their support.
Rater higher-end prospects and pre-solicit them in advance of fundraising events in order for you prospective donors to have a sense of a specific gift to consider.
Offer sponsorship opportunities of events, your website, etc., to local businesses. Such sponsorships create win-win partnerships with businesses by providing visibility to the community. For businesses, donations are often considered a marketing expense.
If your nonprofit is considering dues or other fee increases, make modest annual adjustments rather than hitting people with a significant increase all at once.
Offer free estate planning seminars highlighting tax savings options, including planned giving.
Maximize use of your building by renting available space to outside groups (bingo, dance clubs, etc.).
Charge outside vendors a fee to be eligible for use in your facility … caterers, florists, etc. All vendors should be asked for their financial contributions.
Offer babysitting on site for a nominal fee during events, business hours, and programs. Not only will this be an appreciated service, it’s conceivable you can secure volunteers to provide the service and/or receive enough income to make a modest profit for the organization.
Constantly urge supporters to consider matching gifts programs available through their employer. Often schools or programs open to the community are eligible for corporate matches.
Conclusion:
Chances are at some point the current economy will challenge your nonprofit organization to consider creative strategies for minimizing the impact on your delivery of service. This cannot be a period of “business as usual.” While there are many external factors beyond your control, there are many initiatives to consider to enable nonprofits continue to fulfill their mission. The organizations that embrace this challenge will be the organizations that will survive the current situation and thrive in the long-run.
Seth Bloom is President of Bloom Consulting, Inc. Bloom Consulting specializes in nonprofit fundraising, strategic planning, marketing and leadership development. www.bloomconsultinginc.com
Seth Bloom
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