How to Run a Nonprofit During the Recession

With the economic downturn and the bankruptcy of prominent Wall Street firms, nonprofits are feeling the backlash to their bottom line. Nonprofits are almost always related to causes that drive programmatic functions and ultimately support people in need. When funding streams into a nonprofit are threatened to freeze, nonprofits need to become very creative in maintaining the bottom-line in order to continue to support vulnerable populations and also sustain their own staff.

Things You'll Need

• Foundation directory
• Email marketing kit
• Twitter account
• Facebook account
• Blog

Instructions

1. 

   Broaden your funding horizons. Nonprofits sometimes make the mistake of relying on one sole revenue source to support their programmatic functions. The problem with this is that there is no way to foreshadow when and if the source will stop generating funding. It is imperative to have various funding streams funneling through your nonprofit so if one of those streams does dry, you will not have to eradicate vital programming.

   Diane McWithey, Executive Director of Share, a nonprofit organization in Vancouver, Washington, whose mission is to lead the hungry and homeless to self-sufficiency, says, "Nonprofits that only rely on one funding source run a greater risk of being unsuccessful and having to close their doors."

2. 

   Build the buzz. Various types of social media that are available today at low or no cost are great tools to market your organization to the public and build your brand. Believe it or not, there are still foundations that are giving to nonprofit organizations generously, so it would behoove you to use social media and target foundations that have increased their charitable giving. Set up a free account with Twitter, Facebook or Blogger and start branding your organization to gain the benefits of social media.

3. 

   Review your organization's benefit and pay structure to lift workers' spirits. Executives at nonprofits should always be working to increase their workforce moral, but during a recession, when your workforce may be struggling or worried about the future of their employment, it is a good opportunity to increase morale even more. McWithey says, "Taking the time to consistently review benefit and pay structures that will directly benefit your workforce has allowed my organization to become an employer of choice."

4. 

   Build your organization's financial reserves. No matter what the economic climate may be, it is important for nonprofits to always hold net asset reserves in the balance sheet. Don't operate from donor check to donor check or rely on a single contract from one particular government or foundation funding source. A six or seven-figure reserve will aid a nonprofit to get through to the other side of a recession with its programming intact.

5. 

   Raise money while raising awareness. Your nonprofit should continue with annual fundraisers, despite the recession. Fundraisers that have minimal overhead costs and higher earning potential are the best routes. Rethink your events that raise money for the organization. Events such as runs, walks or concerts often yield a large amount of participation and can be done with nominal overall costs. They also serve a dual purpose in raising awareness about your organization.

Tips & Warnings

• For individual giving, increase the number of employee giving campaigns involved in your annual appeal.

• If your staff say they can't or don't have any experience in raising money, teach them how. Everyone should be a revenue generator.

• If your organization has never collaborated with another organization before, now may be the time to start. Nonprofits are looking for ways to collaborate with each other to minimize overhead and maximize resources.

References

• The Chronicle of Philanthropy: The Recession's Toll on Philanthropy and Philanthropy Goes Hollywood
• Nonprofit Centers Network: Nonprofits Consider Shared Resources as Funds Diminish
• CNN: Nonprofits Expect Permanent Damage from Recession

Resources

• Nonprofit Finance Fund: A Guide to Navigating the Recession