Thursday, February 19, 2009

Nonprofit Tough TImes

Question: With federal, state and local governments spending less on social programs because of the looming budget crisis, what actions do you recommend nonprofits take to protect ourselves? Question Submitted by James in Utah

With many nonprofits receiving some sort of government funding, the current national financial crisis will more than likely affect your nonprofit. Even those surviving from foundation or individual donors will more than likely see a decline in funding. The reality is that even though we don't know how much we will be affected, we have already seen all 2008 stock market gains lost in the first few weeks of 2008. Therefore, foundations and individual donors will have less money to donate. So what do you do now to protect your nonprofit?

1. Begin working on your 2009-2010 budgets now. It's important to know what funding you are sure to get and what funding is at risk. Take time to understand your funding. Do not see this process as something you have to do? Look at this process as something you need to do for yourself.

2. Review every budget item and position to make sure they are absolutely necessary. If you believe you will need to go through lay offs, take time to understand where they may come from.
3. If you have a billing problem on any of your contracts, figure out how to solve this now while you have time. When you don't have money coming in, you don't want to be caught in a situation where your funders aren't paying you because you didn't do something right. This is free and easy.

4. Begin to identify your 2009 individual donor process now. When will you mail your solicitations and who will you call? Your individual donors can buffer the drop in government funding.

5. Identify and plan your fall 2009 dinner now. Focus on how much you want to net. This is the only thing that matters. Your annual dinner is not about PR. It's about raising money. period! If you know that you will have a cash flow problem in October, put your dinner in October. If you know you will need an additional $50,000 during that time period, you still have time to raise it.

6. If you've had an annual dinner before, solidify your corporate sponsors now. If you have never held a dinner before, organize it now or don't have one this year.

These are some basic answers on how to protect your nonprofit from the economic turmoil. If you'd like me to expand on any point or answer a new question, please e-mail me at

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