2009 May Be Tough for Nonprofits (Part 2 of 2)

So, it seems a pretty good bet that 2009 will be a tough one for charitable organizations. Here are some ideas about how nonprofits can respond.

First, budget very conservatively. Start with your tightest budget and reduce it by 10%. This will force you to keep expenses low, particularly on the personnel side where you need to move early in the year to have any impact on the budget.

Second, ask early! If this negative scenario unfolds it will get progressively worse as fiscal 2009 progresses. Early asks are more likely to be successful than later ones. Make your asks as attractive as possible for corporate and other donors to get them to commit ASAP.

Third, devise less expensive ways donors can participate. Whenever they can substitute volunteer time for a cash gift, that's a great idea. Or, if you are in a capital campaign, sell more bricks because they may go a lot faster than more expensive naming opportunities.

Fourth, pay a LOT of attention to your wealthiest donors. They will be least affected by the economy. Let them know of your concerns and your need for their increased support in the coming year. Give them time to plan, so they can be responsive to your need. They will be impressed that you are planning ahead rather than waiting for difficulties to occur.

Fifth, focus on new friend raising. I have found in past recessions that when giving slows down I can invest time in forming new relationships. While this may not help in the current fiscal year, it lays the groundwork for a very strong recovery when the economy eventually turns for the better. Invest slack time in face-to-face meetings with people who can be helpful to your charity.

Sixth, involve the entire board in owning and solving the problem. Make them aware of the possibility of a tough year from the very beginning. If you emerge from a tough period with the board engaged and enthused, then you will have laid the groundwork for great successes in the good times.

Recessions are not to be feared. They are a fact of life. A successful charitable organization, like a successful business, needs to survive many of them over time. Good preparation and solid execution will be rewarded in the long run.

Robert Thalhimer

Posted at 1:48 AM, May 15, 2008 in Nonprofit Management | Permalink | Comment