Right on the Money: Staying on Course Amid the Recession

A target with darts in it.

As we near 2010, the slowing unemployment rate and a gradual rise in consumer spending have given hope that the recession may be nearly over. But nonprofits and charities, particularly those that assist hard-hit youth and families, continue to face the challenge of serving more people while bringing in fewer dollars. A November 2008 online survey by the Bridgespan Group, a consulting source for nonprofits, found that nearly all of their more than 100 respondents had already seen a simultaneous decrease in gifts and increase in community need; the Community Foundation of Utah, in a yearlong survey of the state’s nonprofits, has found that the same concerns still loom large a year later.

A new year presents a fresh opportunity for youth-serving organizations to reassess their priorities, infrastructure and preparedness for tough economic times, says Fraser Nelson, president of the Utah Nonprofits Association and executive director of the Community Foundation of Utah. “Corporate and individual giving has been down but will recover with the economy,” she says. “But foundations award grants and other assistance on a rolling, more long-term basis, so directors need to be thinking creatively about what’s likely to be a decline in foundation giving over the next two years.”

Nelson gives the following advice for ensuring that your organization stays afloat as the economy continues to recover:

Reassert your core mission—serving youth and families. Above all, Nelson says to stay focused on helping the families and youth who need your organization. “Find efficiencies, be sure to document them and always be looking for new ones,” she says.

Cut programs strategically. Nelson advises managers and board members to “cut entire programs that are less impactful” rather than making sweeping, across-the-board cuts. She adds that this can be a good time for boards to focus their goals on the biggest needs—say, lowering their community’s runaway youth population or assisting adolescent mothers. Boards should make sure to communicate any changes in programming to donors.

Embrace collaboration. Nonprofits are collaborating more than ever before, says Nelson, and that will only continue. “We may see more shared office space and administrative staff—like accounting, human resources and marketing—because it helps everyone to combine forces.” Engage other youth- and family-serving organizations in shared buying strategies, even for little things like office supplies, which add up. Consolidating helps save money.

Establish a savings plan. Among the community foundation’s most startling discoveries was the fact that 35 percent of Utah nonprofits have no savings at all: 26 percent never had savings to begin with, while 9 percent have depleted the ones they had. Nelson stresses the value of establishing endowments if possible, to safeguard organizations’ finances against the economy’s ups and downs.

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