Chrysler Technical Center: Auburn Hills, MI

When it comes to resource management, strong nonprofits optimize everything.  I like to say that they learn how to spend every dollar twice.  Everything and everyone is multi-purpose.  Here’s a smart example: your marketing/PR department needs a new computer that has the technology to handle current graphics and media software.  You purchase the computer and design the hardware looking ahead and knowing that in 2-3 years, the computer will be transitioned to an administrative position that doesn’t require the computing power of the marketing position, but that will need an upgrade from what it has today.  At which point, the marketing department receives a new computer that can handle the even more bloated software code that has developed during that time.  What that means though, is that you can’t buy a computer with the oldest technology and you will probably pay a few hundred dollars more than what you had hoped.  However, if you are able to extend the useful life of that computer, the extra cost is saving you thousands down the road.

Contingency planning is critical for nonprofit organizations before embarking on a new program or project.  Generally speaking, there is a continuum of 5 different levels of success/failure for which you should have contingency plans:

Both extremes of the continuum could be deadly for a nonprofit organization.  If success causes the endeavor to grow beyond the resources to manage it, it could implode and take the entire organization with it.  So failure is not necessarily the worst outcome.

For each level of success/failure, you have to ask yourself what your organization would look like and address the following issues:

1. Staffing levels and needs
2. Facilities and resources
3. Funding
4. Effect on mission and other programs

In regards to the success end of the spectrum, is the performance sustainable and does it represent where you want your organization to be over the long term?  When evaluating failure, you must determine what would be left over and how could it be used in a positive manner.

Unfortunately for Chrysler, they didn’t take into consideration that the headquarters would be geographically located in an economically depressed area and the last thing that would be needed is another shopping mall – especially after all those people lose their jobs.

It is impossible to plan for every contingency, but with smart planning, you should be able to address the most likely outcomes to make sure your nonprofit organization is well positioned to make the most of good results and make the right decisions when faced with bad results.

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.