Spring 2010 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

Weathering the Economic Downturn With the nation trying to recover from the recession, not-for-profit organizations face unique challenges in surviving this tough economic climate. The results of RubinBrown’s 2010 Not-for-Profit Economic Climate Survey indicate that despite the fact the recession is officially over, NPOs are still feeling the effects and will continue to do so throughout 2010. As NPOs typically lag the economy, these results are not surprising. NPOs are taking a variety of measures to cope with this economic climate. Generally, though, in order to ensure future financial stability, organizations are faced with two options — either bring in more money or cut costs — or perhaps a combination of the two. All organizations would like more money, but typically the task of raising or earning that money is more difficult than it seems. Organizations need to be both strategic and creative in this endeavor. Some potential new strategies to explore include: By Judy Murphy, CPA, and Amy Altholz, CPA

• For organizations that rely on earned revenue, evaluate your current programming. Are current revenue sources as diversified as possible to ensure a sudden drop in one source does not dramatically threaten the organization’s financial stability? Is there programming that will attract larger audiences and therefore generate more revenue? Are there “free” programs for which charges could be initiated? Or, is it time to consider increases in existing fees? Has your organization considered social entrepreneurship? Are there new earned revenue opportunities such as facility rental that you haven’t yet pursued? • Are there untapped sources of contributions you haven’t explored? Make efforts to identify new potential donors (e.g., younger donors) and grant opportunities, or consider different types of fundraising solicitations (e.g., a focus on planned giving). Are there opportunities to expand the board to assist with development efforts? Are there “public” funds or tax credit programs available? • What are your competitors doing and what can you learn from them? This competitor analysis could potentially shed light on new opportunities (as well as weaknesses) and ways to distinguish and market your organization more effectively. With a finite amount of resources within a community, the sometimes easier approach taken by not-for-profit organizations is to try to reduce expenses. To do this: • Review your budget and look for cost savings opportunities. For most NPOs, the largest expenditures are salaries and benefits. Most have already instituted salary freezes, furloughs, reductions in employee benefits and 401(k)/403(b)/pension contributions or matches and/or reduced staff levels because such costs

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