Nonprofit University Blog

While I was hoping to get away from the theme of tough economic times, it seems nigh impossible to do so right now.  But I don’t like what I’m hearing from the board rooms and want to offer an alternative that should be considered. 

 The knee-jerk reaction to tough economic times is to cut:  cut, cut a little more and then cut yet more.  One executive director I know has been asked by her board to bring back several scenarios for next year’s budget:   a budget reduced by 10 percent, 25 percent and 50percent of the organization’s current budget.  And the request was not tempered by the parallel request that the board will work on scenarios to increase its fundraising work (assuming it isn’t currently at 0) by 10 percent, 25 percent and 50 percent.  How far can an organization cut and still deliver on its mission?  Not far, given that the majority of nonprofits run already pretty close to the edge.  Thus, cutting without a parallel strategic fundraising approach (by which I do not mean simply sending out a second “annual” appeal with a desperate cry for help) might be little better than doing nothing. 
 

There is, however, an alternative to cutting, an alternative that some might consider bold.  It is called merging.  These tough economic times beg all boards to take a close and deep look at the general sustainability and viability of their organizations and question whether trying to go it alone is the smartest decision.  These tough economic times require the putting aside of pride, grandstanding, legacy building, etc., and thinking only about how best to deliver the promises of an organization’s mission to its clientele.  These tough economic times demand boards, more so than ever, to remember that they are there to steward the promises of the mission.  And the best way to do that might not be to cut budgets but to find a strong partner with which to weather these tough times and build an organization that will be well equipped to weather the next– and inevitable — bad economy.