Right on the Money: Tough Times Mean Belt Tightening for Youth Programs
This spring, Boys & Girls Clubs of Greater Washington, in Silver Spring, Md., was staring at a $7 million deficit, declining membership and outdated facilities. To stay afloat, the organization began the arduous task of making cuts to staff, programs and services.
In the end, the group changed its business model so it could focus less on repairing roofs and more on serving young people. Clubs were closed, buildings sold and services moved into schools and recreation centers. The 100 programs the organization operated were trimmed to 25.
In addition, senior staff took 10 percent pay cuts, some employees were laid off and other staff took furloughs.
Like Washington’s Boys & Girls Clubs, many youth-serving agencies are facing thorny decisions about what to cut when ends don’t meet.
“What worked for us is that we always stayed mission-focused,” says Leah Lamb, the clubs’ chief development officer. “We put together a restructure plan that focuses on freeing up resources to reach more youth in the future.”
In addition, the organization used the following principles to guide the process:
Involve everyone. “This was not a top-down process by any means,” Lamb says. Staff from all over the organization were kept informed and allowed input. Clearly, morale is an issue, so making decisions inclusively is instrumental, she says.
Check the balance sheet. Financial statements not only help organizations decide which programs best fit their mission, they also serve as a crucial tool for communication with board members, staff and donors. Moreover, analyzing statements can give executives a clear sense of where costs are getting out of control and help organizations change their practices to meet emerging needs. Well-funded programs could be streamlined to make room for new programs. Or managers might determine the costs of running of a program are too great given its outcomes or the number of youth being served.
Aim for measurable results. Lamb says every cut made had to be justified in terms of the net effects it would have on the organization’s mission and how many youth would be served. With the goal of striving for higher-quality programs, the groups’ leaders devised a number of measures each program would have to meet to be retained.
Avoid knee-jerk decision making. Taking the long view helps leaders avoid succumbing to “the sky is falling” mentality and making cuts that will ultimately undermine the organization’s future.
At the same time, don’t delay decisions. It’s easy to make the mistake of waiting for more information before making the difficult decision to slash a program. In a crisis, a group’s leaders ultimately have to pick the best moment to decide.
Keep an eye on the future. A healthy nonprofit sets aside reserves, diversifies its funding sources and builds long-term relationships with community partners and donors. And from each crisis, it learns to operate more efficiently to be prepared for the next storm.
For more information about fund raising, see NCFY’s Guide to Starting a Youth Program.