Many of us are finding ourselves filled with uncertainty and anxiety about the world situation and the domestic economy. One hopeful development is the important role that a non-governmental, non-corporate organization-the United Nations-has been playing. This reminds us of the roles that our local nonprofits (which are also non-governmental, non-corporate organizations) play in trying to seek agreements, to bring people together, to strive for justice, to argue for common sense, to hope for a better future. - Jan Masaoka
NEW JOURNAL WITH DISCOUNT FOR BOARD CAFÉ READERS
A new publication for nonprofit sector thinkers is the Stanford Social Innovation Review; its first issue this month has an article by Board Café writer Jan Masaoka on "The Effectiveness Trap," as well as articles about "going to scale," foundation payout rates, and more. Board Café readers can save 30% off the $69 price if you subscribe by April 30, to http://www.ssireview.com , click on subscribe, and enter promo code "cafe43."
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After each issue of the Board Café we receive dozens and dozens of letters. We apologize that we can't respond to all of them . . . but please continue to write! We do try to answer letters, and many of the unanswered letters lead to articles being included in future issues.
GREAT EMAIL SIGNATURE
We got an email message recently from Jane Ellen Bleeg of Rochester, New York, who signs all her email this way: "Proud Board Member of the Upstate Guide Dog Association. For more information about this organization or how to support UGDA, please visit www.ugda.org. How simple, and how great!
This month's Main Course article:
by Vince Hyman
Nonprofits across the country are facing tough times. States are canceling contracts with nonprofits and even "unallocating" funds, and funders are reducing grants, just as the need for services grows.
What to do? Five years ago, Emil Angelica of the Wilder Foundation and I surveyed cutback responses as part of research for our book, Coping with Cutbacks: The Nonprofit Guide to Success when Times Are Tight. We found three categories of approaches to cutbacks: financial strategies, structural strategies, and engagement strategies. In a crisis, an organization should pursue all three. This framework is not a list of short-term fixes, but rather a way to think strategically about organizational continuity.
- Financial strategies include cost cutting and fundraising approaches. Most nonprofits first react to cutbacks by cutting expenses, laying off staff and reducing services, or they try to add income by raising new funds or increasing fees. Such strategies are often effective, but if the organization is already functioning on a tight budget, may not be enough, and may affect constituents more negatively than necessary.
- Structural strategies involve changing the organization's internal structure, its mix of programs, and perhaps even its mission. For example, a fitness community center was faced with intense competition from two new for-profit gyms. Rather than try to compete directly, the board decided to focus on fitness access for seniors, youth, and financially stressed families. This would not be easy to implement: it would mean finding new funders, new constituents, and probably new staff and new board members. By undertaking a structural change, the board is taking a high-risk, high-gain approach to the new environment.
- Engagement strategies involve taking the organization's questions to the greater community-to the clients, patrons, business, religious, philanthropic, governmental, and other systems in which the nonprofit is embedded. For example, the fitness community center could choose to convene its current members, other community centers, the public health department, the new competitors, and others. Suggestions from such a meeting might include recommending that the organization close, gaining the public health department as a new funder, moving its location to a hospital, or working out a joint venture with one or more of the competitors. In the best of situations, participants would emerge from such a meeting ready to help the community center.
We have briefly listed 185 cutback techniques (example: "Examine all costs to see if they are necessary.") at www.wilder.org/pubs/cutbacks/cutbacks_strategies.html.
Vince Hyman is director of the Wilder Publishing Center and co-author of Coping with Cutbacks: The Nonprofit Guide to Success When Times Are Tight, available at www.wilder.org/pubs
Next month in the Board Café: Thinking About Succession Planning for Nonprofits of All Sizes
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