Wednesday, February 3, 2010

How to grow and sustain your mission in a down economy

Do you feel that you're not moving forward?

Are your donor dollars not there as they were before?

These are trying times, not only for society as a whole, but particularly within the nonprofit sector. As jobs are lost, salaries are frozen and retail sales are hitting a plateau, individuals and companies are looking to tighten their belts. The first hole to be ratcheted up, invariably, is discretionary funds for charity (Not the $5 lattes)! You're not alone, and in your role as a nonprofit administrator, board member, volunteer or even friend realize first hand that you have two choices: dig in and hold your line (which resembles the sand being swept away under your feet at the ocean), or you can grow your funding strategies (Yes, I said grow) during this period.

The first step everyone takes is looking to cut internal costs. That might mean using the backside of scrap paper or lowering the thermostat in the office, but those are just efficient business changes. These actions are not growing your income; these are just smart cost-cutting actions. An initial step should be looking at your present income streams and deciding which ones are not being fully vetted, or in other words, who or what is eating into those hard costs. For example, your special event goes to the same location year in and year out, but does the price of the plated meal go up? Maybe this year, it’s time to bid out your event to several competitors (seeing if that per plate price drops $2-3). It's really nothing extraordinary that needs to be done, but it's essential that you look at how you present yourselves to the larger community when asking for donations. Have you updated your outcomes and measurements to show donors how critical your mission is to society? Perhaps, now is the time to work on some new grant-proposals to provide for capital and/or one-time project start-up costs, thus relieving pressure on your main sources of income.

There is no good rule of thumb or industry standard as to how to best evaluate your income streams, but I'm of the opinion that no source should account for more than 1/5th of the entire budget. Doing so only sets your organization up to complacency, which is never good. Therefore, you need to charge your board (and their version of a fund-development committee) with the desire to understand the current revenue streams and see which areas can be increased through a more direct approach, or through negotiations with vendors to reduce hard costs. Really, what this article is getting at is that it just takes a strategic approach to growing and sustaining your mission in a down economy. Now, more than ever, do people need the resources of the nonprofit sector. Instead of hunkering down, take charge, assess the situation and look at the resources you have within the organization, as well as those that you can draw on from the larger nonprofit community to help you meet these financial goals.

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