4. Are we in crisis? If your organization is and/or potentially may be facing a financial shortfall, first determine the nature and size of the problem. Ask yourself:
   
   • What’s the range of the budget shortfall?
   • Is this shortfall short-term or long-term?
   • Is this a cash flow or balance sheet issue?

   It is not always easy to ask for help. However, do not exacerbate a situation by avoiding a problem because you haven’t yet found a solution. Secondly, don’t make a knee-jerk reaction. “Haste makes More Waste!” Examine your long-term and short-term strategies and objectives, and how these plans impact operational decision-making.

   • Fieldstone Alliance prudently advises not to make knee-jerk reactions, but rather use a "stop, step back, and check the long view" process to help avoid these responses that use up energy but don't really advance your cause.
   • Engage your board. Ask for some of the financially savvy folks to take a look at your financials and to recommend some cost-saving or revenue producing options.
   • Don’t have the talent on the board? Enlist outside counsel in a ½ day cost management brainstorming session.
   • Blue Avocado, the online magazine for community nonprofits, suggests, “Instead of worrying, try a few scenario exercises: Let’s imagine that by next quarter we’ve heard our biggest grant won’t be renewed. What will we wish we had done three months before?” Come up with optional scenarios and recommendations. Prepare one budget that can be enacted if funding comes through as planned and another in case funding falls through. Examine your cash flow projections over the next three months. Determine your options.
   • If your organization decides to declare an emergency, recognize this as a unique opportunity for change. Allow yourselves to break out of the old mold, provide new vision to your employees and become energized by bold and creative new ideas.
   • Take a hard look. Do you need to consider merging before your situation further weakens the potential to advance the mission?
   • If you fear going into significant debt, choose a date to close.

5. What do our supporters think? Now is the time to evaluate your organization and your essential services from your constituents’ perspective. Your clients, funders, partners, donors, peers, and friends may have some interesting things to say about you. Considering they are the people who are going to keep you afloat, perhaps it is time to get a barometer reading of your perception in the community?
6. But we still have to fundraise, right? Right. Money may not be as free flowing as it was previously, but folks still believe in supporting a cause and a mission. So make sure you understand your organizational vision and clearly communicate it to your constituencies.
   • Prospect research. You may be able to locate prospects for individual and corporate donations, including in-kind contributions (i.e. furniture).
   • Fundraising. Is it time for a mini phone-a-thon or other inexpensive fundraising efforts? Take advantage of electronic technology to expedite receipt of gifts. Focus your strategies and turn your attention to your multi-year, individual and major gifts donors. Tell them your situation and ask for help. Treat them well with a personal touch and keep them engaged.
   • Resource management. If your budget permits, engage a consultant to perform a development audit. Organizations that examine themselves internally are more likely to maintain their current levels of revenue with greater potential for increased funding support.
   • Cash flow management. Call your funders and see if you can get grants in the door quicker than promised. For example, if you are in the first year of a three year grant, request that the total monies be converted to a two year grant.
   • Earned income. Can your constituents afford to pay more for your services? Are there untapped markets in need of your services? Are there opportunities to sell your organization’s intellectual property by way of consulting services?
   
   
7. How can we remain marketable without breaking the bank?
   • Don’t forget about the power of social media. Think Facebook. Think Twitter. Online PR and search engines present unprecedented marketing opportunities.
   • Seek low-cost marketing and public relations opportunities. Write letters to the editor or create public service announcements that speak to your organization’s top services and issues. Include your fundraising appeals in local business mailers.

Please contact us if we can be of assistance in organizing or conducting an analysis or facilitating a consensus discussion.  412-434-1335 or lbonner@deweykaye.com

Sources: Dewey & Kaye requested suggestions from our readers for managing tips amidst the current economic outlook. This article is the result of your helpful suggestions. We thank you for your time and insight.

1. Joanne Fritz. “Saving Money Is as Important as Increasing Revenue.” Joanne Fritz. http://nonprofit.about.com/od/nonprofitmanagement/tp/cuttingcosts.htm.
2. Jan Masaoka. “And Now for Something Different About Nonprofits and the Economy.” http://www.blueavocado.org/content/and-now-something-different-about-nonprofits-andeconomy-1109.
3. Fieldstone Alliance. “20 Cost Cutting Ideas for Nonprofits." http://www.fieldstonealliance.org/client/tools_you_can_use/01-2209_cost_cutting_ideas.cfm#list
4. Fieldstone Alliance. “20 Emergency Funding Sources for Nonprofits.” http://www.fieldstonealliance.org/client/tools_you_can_use/12-1608_emergency_funding.cfm?disccode=TOOL012209