Spring 2010 issue of Horizons

be realistic and honest with your employees on the challenges the organization faces.

have the greatest impact on the budget. Also evaluate other expenditures — could cost savings be realized by renegotiating vendor contracts, internalizing previously outsourced services, etc.? • Perform a cost/benefit analysis for programs, fundraising efforts, etc. While always staying true to the organization’s mission, can expensive, underperforming programs be revitalized in a more cost-effective manner? Are all existing programs effective/necessary? Do you really know what your programs are costing? Consider fixed vs. variable cost analysis. Are fundraising events costing more than they bring in? If so, perhaps downsizing, eliminating give-a-ways or even cancelling some events is warranted. • Investigate potential collaborations, partnerships or even mergers with other not-for-profit organizations to gain efficiencies. • Go green. Investigate ways to conserve energy such as automatic on/off switches, an energy efficiency audit and employee education. Consider making your office more paperless. In addition to helping save the environment, you also could save money. • Can you utilize volunteers, board members, etc., to perform services for which you previously paid? In tough economic times, people generally have more time than money but still want to give back to the community. Now is the opportunity to potentially solicit donated goods and services. • Reevaluate the frequency and location of staff, board and committee meetings. Can/should more meetings be brought in-house? • Set realistic budgets and consistently monitor them. You have the opportunity to engage the entire organization in setting and sticking to this proposed budget. Although optimism is good,

You might be surprised what ideas are generated when employees are empowered with this responsibility. At the same time, hold them accountable for budget goals by performing timely monitoring and communication of actual results.

In addition to just surviving the recession, not-for-profit organizations also have the opportunity to proactively develop a strategic financial plan to prepare for future economic and organizational down-turns. This plan could include: • Specific identification of what measures will be utilized to monitor the organization’s financial health, such as budget vs. actual analysis, comparison to industry benchmarks, and review of long-term budgets and forecasts. Timely monitoring by management and the board can allow the organization to address potential issues before they actually become issues. • Review of current policies, including investment, endowment spending, risk management and reserve. As the organization reacts to external • Focus on succession planning. Take the opportunity to evaluate your current management team and board as you look toward the future. Consider the abilities/skills/talents that are needed. Develop a plan to ensure that future successions will be seamless and that the loss/departure of any one key individual will not be detrimental to the organization. There is a silver lining to every situation, even a recession. Although not-for-profit organizations have struggled and will continue to struggle in this tough environment, the organizations that survive will be stronger than ever. conditions, are the current policies still appropriate or are updates needed?

47 u spring 2010 issue