Nonprofit Doesn't Mean Breakeven

Is anyone else tired of all the doom and gloom?  I think that even the happiest person in the world would be depressed after listening to the news for 5 minutes.  Yes, the world is in an economic crisis and there is a lot of bad things happening to good people.  However, the one thing that everyone seems to be forgetting as we throw around the word “crisis” is that the definition of the word does not specify a negative outcome.  The Greek root of the word means ‘turning point’ and ‘decision’ among other synonyms, but it doesn’t specify a negative or positive outcome.

The financial outlook for nonprofit organizations over the next 12 months is not good.  Foundations and endowments have lost 20%-40% of their value causing decreases in grants and investment income.  Additionally, individuals are cutting discretionary spending and donations, which means decreased event attendees and individual gifts.  Nonprofits that are able to maintain their funding levels will be doing really well.

However, there will be some nonprofits that really shine; that come out of the crisis in a better position.  How is that, you ask?  First and foremost, they are accepting the situation for what it is and focusing on what they can control.  They are not operating in a state of shock and scrambling for every penny no matter what the cost.  More than ever, fundraisers have to work smarter and focus on the ROI (return on investment) of their fundraising activities.

The organizations that will be successful are currently involved in an indepth evaluation of their programs and operations.  They are eliminating programs and activities that are not related to their mission, that are not producing results, and that do not strengthen the organization.  Smart nonprofits are really prioritizing to make sure that their resources are directed to the programs that matter the most.  They are looking for efficiencies and reviewing processes to streamline their operations and maximize their resources.  They will emerge from the crisis leaner, meaner and ready to take off when things turn around.

The smart nonprofit is also capitalizing on positive public relations and stewardship.  They are sharing their success stories and demonstrating the value their organization brings to the community.  People want to see rays of light through the gloom.  If you are able to make your organization shine through, you will really be noticed.  Smart nonprofits are also very focused on communicating with current donors and planting seeds for future donors.  They are building their “followers” without alienating them because they can’t give now.  By using low cost methods like online communities and volunteer programs, they are able to get new people connected and strengthen existing connections.  When the economy loosens up, they will be primed and ready to donate.

Nonprofit organizations that focus on controlling what they can, making the most of what they can’t and seizing the new opportunities that present themselves, will emerge from this economic crisis stronger and better positioned than when they went in.  It’s not necessarily going to be easy or fun, but it can be done.