A recession, by its nature, is not pleasant. Obviously, cutbacks and sacrifices have to be made, but perhaps one of the most unfortunate aspects of a recessed economy is that companies and individuals feel less able to contribute to nonprofit organizations.
Charitable contributions are quite often one of the first budget items to be cut by companies when times get tough and one of the last to be reinstated when the economy starts to turn around. So not only must nonprofit organizations brace themselves for the monetary pinch they are certain to experience, but they must also poise themselves to withstand what could possibly be an extended down cycle.
As a nonprofit, however, you have a number of strengths to draw upon. Now, more than ever, you need to accentuate the positive as you focus on three critical elements of your operations: people, processes, and technology.
People: No one ever wants to consider layoffs, but to ensure that your organization is able to sustain itself through the downturn, job reductions could become necessary. It is also not uncommon for employees to seek greener pastures when times get tough. In either case, layoffs or attrition, it is possible you will find yourself without the depth of human resources you need.
First and foremost, be proactive. Remember that it is imperative that your organization retain the employees it cannot afford to lose – for a nonprofit, those are often the employees who maintain the donor relationships and institutional knowledge needed to maintain a steady course. To do that, you need to have programs in place to recognize individuals’ efforts and benefits packages that incentivize employees to stay. While both may sound like extravagances, that isn’t necessarily the case. After all, those who dedicate themselves to nonprofit work are often motivated by more altruistic rewards, so recognition programs need not be tied to large monetary bonuses or expensive perks. A half day of vacation or a small gift card can often do the trick. And of course, benefits can be costly, but your nonprofit organization may be able to procure more attractive and more affordable benefit options by engaging a broker or an outsourcing agency.
Then, to really accentuate the positive, make the most of a bad situation by tapping into the talent that resides within your bank of dedicated volunteers. Volunteers who may be under-employed or between jobs could perhaps commit more time to your organization now. Assign them a task that allows them to build their resume’ while you tap into expertise you may not otherwise be able to afford.
Process: Just like for-profit businesses, you need to be cognizant of your costs, and to the extent possible, identify ways to reduce costs during challenging economic cycles. Reducing costs, however, should not mean you automatically resort to cutting overhead expenses such as critical people or worthwhile community programs.
Your organization can achieve significant savings and operate more efficiently by streamlining processes and eliminating redundancy. Of course, while directors of non-profit organizations may have a remarkable propensity for creating life-changing charitable programs, they may not be as adept at process management. Fortunately, there are a multitude of external experts and professional service agencies that can help organizations revamp and administer their back office processes. In some cases, experts might even be willing to take on the responsibility as a pro-bono project or at a reduced fee for a nonprofit.
Technology: With a whole host of software available that can track contributions, monitor employee’s time, or create payroll reports, it is clear that technology can help nonprofits better manage both people and processes. Despite the pervasiveness of today’s technology, however, enterprise-quality software systems can still be too expensive.
But again, nonprofits may have some opportunities to explore. Try to identify a community partner that is able to share the cost or help with installation and implementation. Many will be willing to assist you because they recognize the value of having your organization’s day-to-day operations run as efficiently as possible.
While it is natural to feel negative about the current state of the economy, as a nonprofit, you have a lot of positives working in your favor. Rely on your strengths and lean on your community partners to provide capabilities that can supplement contributions. In short term, if your people, processes and technology are performing at optimal levels, your organization will not only be prepared for the worst, but also poised for better times ahead and growth in the long term.
