This collection of resources shares insights and research for navigating the fiscal crisis, as well as practical advice from nonprofit organizations who have taken steps to improve their organizations' futures.
In this update to our annual "Managing in Tough Times Survey," Bridgespan explores the tactics nonprofits are using to navigate tough times and identifies which tactics are most associated with revenue growth.
The negative effects of the economy on nonprofit organizations have deepened considerably in the last year, according to responses from more than 100 nonprofit leaders participating in a Bridgespan study initiated in November 2008 and updated last month. But while the hardship of prolonged financial pressure cannot be overstated, many organizations appear to be making the difficult decisions that may gain them stronger footing as market conditions improve in the future.
How the current economic turmoil will play out is unclear. What is clear is that nonprofits must continue their vital missions. For most organizations, however, sustainability will require tough decisions to recast budgets, partner with key funders, keep core teams strong, develop explicit contingency plans, and—importantly—take what steps they can to maintain or even enhance the strength of their organizations.
Tough times require trade-offs. Making trade-offs well requires clarity-about the results an organization intends to deliver and about the resources it will need to succeed.
During the past month, we surveyed more than 100 nonprofit leaders to understand how they are being affected by the downturn and the approaches they are taking to address the challenges ahead. The findings show that nonprofits are already feeling the impact, but that many are not prepared to make the changes necessary to ensure the continuation of their core missions.
Now is not the time for nonprofit organizations to spend precious dollars on anything that doesn't produce an immediate benefit. Or is it?
Knowing the true cost of programs or services provides insight into an organization's effectiveness and efficiency. Cost data also can provide answers about whether too little is being charged for fee-based products or services. Originally published in 2003, "Costs Are Cool" by Susan J. Colby and Abigail M. Rubin provides valuable lessons in the importance understanding costs and their implications, and is no less valuable today given the current economic crisis. This condensed version reinforces the importance of economic clarity during good times and bad.
If your organization is not including board members in the business or strategic planning process, it’s missing out on their valuable perspectives, expertise, and support—especially during tough times. Here’s a look at how and why they should be involved from the get-go.
An in-depth look at how one organization redefined staff decision roles and responsibilities for greater effectiveness.
Recommended ResourcesBelow are links to resources from sources other than The Bridgespan Group that we feel nonprofit organizations will find useful.
Special Reports on Economic Stimulus and Recovery
(National Council of Nonprofits)
The National Council of Nonprofits has created a series of reports that focus on the economic recovery, including analysis of the American Recovery & Reinvestment Act of 2009.
Managing in Hard Times
(Institute for Conservation Leadership)
This toolkit walks nonprofit managers through the difficult decision-making process associated with declines in revenue. It includes some useful worksheet and examples. Although this was written with environmental groups in mind, the principles are applicable to most nonprofit organizations.
Nonprofit Economic Vitality Center
(National Council of Nonprofits)
This resource has been specially created by to help organizations in the sector better cope with the challenging economy. Within its pages nonprofits will find "focus areas" devoted to three topics: basic facts and analysis, offering journalists, nonprofits, policy makers, and the general public up-to-date information on the economic climate; impact on nonprofits, which discusses the impact the economy is having on the sector; and actions steps for nonprofits, which shares resources for weathering a downturn and emerging stronger when its over.
Articles"Fundraising in Tough Times"
(Stanford Social Innovation Review, March 2009)
In this article, writer Mal Marwick offers nine concrete steps fundraisers can take to minimize the impact of the downturn on their organizations, while taking steps to maximize their income.
"Past Economic Downturns and the Outlook for Foundation Giving"
(Foundation Center, October 2008)
In this piece, Steve Lawrence, senior director of research at the Center, reflects on past downturns and their effect on giving; provides perspectives on the future outlook; and explains the factors that generally cause foundation giving to remain relatively stable during economic turbulence.
"How Charities Cope With a Troubled Economy"
(The Chronicle of Philanthropy, 2008)
A compilation of recent Chronicle articles, discussions and statistics related to how nonprofit organizations are dealing with the current economic situation.
"It May Be Hard Times: How to Navigate a Financial Downturn" [PDF]
(The Nonprofit Quarterly, 2008)
A selection of articles from The Nonprofit Quarterly aimed at leaders forced to manage their organizations during economic turmoil. Includes sections on "Budget Cuts and Sudden Overhead Conundrums,"
"Managing Financial Uncertainty," "Improving Cash Flow Management in Challenging Times: A Primer."
"Local Nonprofits Offer Insight on the Unfolding Financial Crisis"
This news story notes how Massachusetts nonprofits are preparing to absorb the impacts of the current financial crisis and offers a few recommendations to nonprofits in general for surviving the market's ups and downs.
"Tips for NGOs Threatened by the Financial Crisis"
SurveysNonprofit Finance Fund Survey: America’s Nonprofits in Danger
This survey of 986 nonprofit leaders, published by the Nonprofit Finance Fund, looks at nonprofits' financial health and the challenges being faced by organizations nationwide.
BooksCoping with Cutbacks: The Nonprofit Guide to Success When Times Are Tight
(by Emile Angelica and Vincent Hyman, Amherst H. Wilder Foundation, 1997)
This book provides advice on nonprofit management during times of revenue decline. It includes sections on how to engage the community and the decision-making process around developing and selecting strategies to manage budget cuts. It also provides a long list of potential cutback and community engagement strategies.
Wise Decision-Making in Uncertain Times: Using Nonprofit Resources Effectively
(Edited by Dennis R. Young, Foundation Center, 2006)
This book comprises 12 articles from a range of academic, nonprofit, philanthropic and business leaders. The articles cover topics such as managing fiscal stress, understanding and managing risk in the nonprofit sector, and engaging business with nonprofits.