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Non Profits_Need_New_Strategies_to_Weather_Budget_Crisis
| Non-Profits Need New Strategies to Weather Budget Crisis
Non-profits everywhere are facing very difficult times as
government funding is dwindling and public need for services is
increasing. Sitting at my local county budget hearing on
recently, it was quite obvious that many organizations are in
panic mode, fearful of what will happen to them and their
constituents if their county funding is cut. Unfortunately,
elected officials have very tough decisions to make, and some
non-profits will end up losing out.
This is an extreme year, but based on my experience with
non-profits, these problems are nothing new. Non-profits, while
very passionate about their missions, can also be dangerously
short-sighted, not wanting to think about what ifs and prepare
contingency plans. This leads many organizations to be caught in
a revolving state of emergency. I am also a volunteer for the
American Red Cross, whose mission in to help people prepare for
and prevent emergencies. Most non-profits could stand to learn a
lot from this philosophy. The issue here is sustainability.
Having the foresight, management strategy, and reserves to
weather storms like the current budget crisis.
There are several components to a sustainable non-profit
strategy. The first is obviously building a diversified funding
base. We are advised to do this with our own investment
portfolios and for good reason. Non-profits need to continually
be looking for new and varied funding sources. These could be
fee for service ventures, corporate affiliations, updated
fundraising campaigns, adding board members with financial
clout, or targeting new donor segments. Complaisance with status
quo funding, can eventually lead to crisis.
Second, the non-profits who are most likely to succeed in
competing for scarce funding are not necessarily those with the
most just cause. They are those that can sell themselves best.
This means having a dynamic marketing strategy and taking
advantage of public relations opportunities. Invest in name
recognition and community presence and it will pay off because
people are more likely to support organizations they recognize.
Third, show accountability to yourself and your constituents. At
the Commissioners hearing, while everyone was moved by the
heartfelt human impact stories, I was struck by the lack of hard
facts about outcomes, especially for the human services
non-profits struggling to keep their funding. Non-profits not
only need to operate at the highest level of efficiency, but
they also need to measure the results they produce. How many
people does your organization help place in jobs annually? How
many people are kept out of the criminal justice system and what
is the savings for society? How much money is saved by keeping a
child out of the foster care system? While non-profits hate to
think of themselves in terms of dollars and cents, those
appealing to cash-starved government entities, foundations, and
businesses that care about bottom lines, need to be able to
provide this type of information.
Finally, non-profits should never let down their guard. A
collective sigh of relief is often uttered after the annual
budget review is done and funding has been secured. But that
generally leads to a false sense of security for a year. Like
businesses, non-profits need to be constantly surveying their
environment. What national economic trends are likely to affect
them next year? Who are major constituents today and who are
they likely to be tomorrow? Are there any new competitors and
what does that mean? What are current internal strengths and
where can new opportunities be leveraged? Are there other
agencies duplicating services with whom you might forge a
partnership? Surveying the landscape and anticipating change is
key for ongoing success.
Organizations in crisis mode are generally not as effective in
fulfilling their mission. Looking at all of these areas and
taking steps to make improvements can give any non-profit a
little more breathing room to face up to their next funding
challenge, and most importantly, continue serving their target
populations.
About the author:
Cynthia Bade is principal of Carlson Bade Associates, which
provides business development consulting and strategic planning
for non-profits and businesses.
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