Instead of reducing services and looking at ways to hold another special event or launch another appeal, nonprofits should take this time to evaluate their position within the local community. Taking stock of their competition (yes, nonprofits "fight" over their constituents served), their donor base, organizations that may be able to offer additional resources or leverage for their mission. When resources are tight in business, they look for strategic partnerships to continue their operations and grow sales, which is what nonprofits should do.
There is a huge influx of smaller nonprofits, ones where their founders mean well, but nonetheless they seek out the same pool of donors, provide similar services and in the end duplicate, perhaps, what other more established organizations have continued doing. Although it appears that I place the onus on the smaller nonprofits, I charge the "named" nonprofits to become more adept at changing their operational structures to be inclusive and partnering with the smaller groups. Ideally, after strong partnerships have formed and the outcomes provide evidence of positive measurements, then perhaps fruitful conversations will take place on how this partnership can grow into a merger of some sort.
As the economy continues to move forward, away from a recession, nonprofits need to utilize this period to look at their mission and explore the unlimited possibilities of strategic partnerships with their smaller competitors (as well as their donor base). An organization that can respond to any situation, directly, competently and confidently will be able to whether this recession and ones in the future.