I have the blessing of going through a kitchen renovation right now.  I have to wash dishes in the slop sink in the basement, and microwave food on the window seat in my entry way.  I have to search for 10 minutes just to find my salt.   I have to wade through boxes of kitchen stuff in the guest room just to get a book off the bookshelf. 

 And… I had to empty my junk closet to let the contractors re-route a heating duct.  I’ve lived in my house 9 years and have added 3 children over those years.  So there was a lot of opportunity to stuff it full.  As I emptied it, I was embarassed to see what I had been “saving” for that perfect moment.  I had saved a ripped inexpensive raincoat that I thought I might need if I went caving again; the bridesmaid dress from my sister’s wedding that I would never wear again.  Throwing things out or putting them in a giveaway bin was painful, but once I got started, it was freeing.

This afternoon, I also met with a leader of an organization going through a strategic planning process.  We talked about the SWOT analysis and a MacMillan Matrix–a process to determine which programs fit the mission, have opportunity to grow (what needs to be done, and has funding to get done), what his organization already does well, and if there is passion or energy to get it done.  It gives him an opportunity to ask his board and community leaders–what is most important to them, and what is worth investing in.

I realize that although there isn’t much of a silver lining to these economic trials that families and nonprofits are going through, there is an opportunity.  It gives us the “pain” needed to make difficult decisions–to get rid of the less needed/past their prime/not working very well programs that a nonprofit may have. A chance to realize that your resources could be spent better in other ways. 

In the end, I will have a renovated kitchen. But an unintended benefit will be the newly organized,  half-empty closet– full of opportunity.

My grand-dog, the only Corgi named after a hiphop artist, Busta Outon!
My grand-dog, the only Corgi named after a hiphop artist, Busta Outon!

Everywhere you look, someone is offering advice about how to fundraise in tough times…stay close to your donors…ask for many small gifts…re-create a lay-away plan for contributions…don’t ask for capital…don’t ask for new…be afraid, be very afraid!  I ponder the question of effective fundraising techniques frequently myself.  The Bayer Center has always raised 50% of its operating budget and the current economic times have hit us where we live…

I love many things in life and one of them is Pembroke Welsh Corgis.  The AKC breed standard to describe a proper Corgi personality is “Bold yet kindly”…an intriguing set of characteristics for any living creature.  This  combination produces absolutely wonderful dogs – three of whom are in my immediate family.
So as I ponder how we or one of my clients should frame their case for support in these trying times, I find myself thinking about the BOLD YET KINDLY injunction…For times like these call for organizations to retain their optimism, their aspirations for a better world, their intention to change and improve people’s lives – BE BOLD, yet they also call for a measured, evidence-based, tempered approach in their fundraising techniques, strategies that are appreciative of the times – YET KINDLY or better perhaps, WISE…
Corgis have other qualities that are characteristic of good fundraisers.  They are persistent and tenacious when they believe something valuable (a peanut butter filled Kong is particularly desireable…) is in the offering.  They are charming and interested in all kinds of people, believing them to be worthy of their regard.  Their world is joy-filled and full of possibility.
I think these are qualities that draw people to organizations and motivate a spirit of generosity and connection.  So may we all be BOLD YET WISE in our on-going work of securing the necessary resources for our organizations…may we all love life like a corgi and love our people with many kisses and an unbounding enthusiasm for new adventures, believing the world is waiting for us and ready to play.
I’d love to hear where you find your inspiration and courage to keep working even when the world around you says NO…so fundraise like a Corgi and may  you each be very successful!

As nonprofits go, most of us know that it’s rough out there right now and likely to get worse in the immediate future before it starts to get better. (PNC Chief Economist Stuart Hoffman forecast that the U.S. economy will continue to suffer into the second half of the year. In fact, it will be 2010 before the economy gets real traction from the various federal policy stimulus initiatives, Hoffman believes.)

So what’s a nonprofit to do? Well, below are some tips (in no particular order) your organization can use to manage its cash flow deficit, if by some chance you find yourself in this current predicament:

1. Cut expenses – look for items in your current budget that can be deferred or cut outright. Also, keep your eye on costs that continue to outpace your revenue growth.

2. Liquidate investments – perhaps your organization has stocks, bonds or certificate of deposits (CDs) that you can liquidate. If you know you’re going to have a pressing cash need in coming months, consider working with your local bank to structure the maturity of your CDs for imminent cash needs.

3. Increase fundraising efforts – consider rearranging your fundraising schedule to accommodate your cash flow needs. For instance, you could consider moving a direct mail appeal to another time in the year when your organization is in need of unrestricted funds to cover overhead costs.

4. Speed up collection of receivables – if there are government agencies that owe you money, you could cask for an up-front payment in advance of the schedule. Similarly, a foundation may consider rearranging its disbursement schedule if you anticipate a cash flow deficit.

5. Obtain a loan or line of credit – a line of credit typically is used to fund short-term working capital needs such as payroll, rent, or overhead expenses. Also, it’s useful to cover incoming receivables. The only costs incurred when obtaining a line of credit involve closing costs and interest expense (once you begin using your line).

6. Reduce program expenses – the for-profit sector does it, so why shouldn’t the nonprofit sector at least explore this option? And while this may seem unthinkable to you at first glance, consider the alternative: burning out your staff (see Cindy Leonard’s “Preventing Burnout” blog entry from May 12).

Appropriately, the Bayer Center will offer a class on debt management best practices appropriately titled, “‘Debt’ Is Not a Four-letter Word,” on June 26, from 9 – 11 A.M. The class will feature instructors Scott Leff and me of The Bayer Center; Lisa Kuzma, Richard King Mellon Foundation; Gloria Ware, Fifth Third Bank; and Misty Parshall, CPA, Schneider Downs & Co., Inc. We’ll instruct you on the ins and outs of the right reasons to borrow money in these tough economic times.

Finally, I invite you to email me with any questions you might have regarding this topic and you’ll be entered to win a 1 GB USB drive. One winner per week through the end of May. Happy cash flow management!

“All of life is interrelated. We are all caught in an inescapable network of mutuality, tied to a single garment of destiny. Whatever affects one directly affects all indirectly.”
Martin Luther King (Ohio, June 1965)Martin Luther King Jr.

 

 

 

 

 

 

 

 

 

 I distinctly remember a conversation that I had with a few nonprofit leaders a few years ago, when the last turn in the economy hit.  We were looking at decreased foundation grants and dips in individual giving.  I was curious about how nonprofits might band together to weather out the storm.

 

One leader said, “In these times, I’ve got to work more closely with other nonprofits to get our mission done.  I don’t have the funds to accomplish it myself.“ She said that she had met with two other executive directors in her field to see how they could get more done with less resources.

 

In the same evening, I met another executive who said, “I don’t have the time or resources to collaborate right now.  I’ve got to hunker down and cut costs wherever I can.  If I share with other nonprofits, we won’t have enough to do our work.”

 

Two separate and very different responses to the same crisis.   They are both partly right.  Most people assume that if you are collaborative by nature, your organization would not be competitive.  I think you need to collaborate in order to be competitive—not with every partner, and not on every issue, but lone rangers don’t make it too well in this environment. 

 

Partnerships should be entered carefully, because if it doesn’t add more value than it costs in time and energy, it should be abandoned.  It must be in the self-interest of your organization’s mission.  (to add to the discussion on self-interest…)  For some, the goal also means preserving the organization or preserving staff positions, which also has some merit.  However, we need to be careful to steward the mission first, which might live on with or without the organization.  That’s a tough pill, but one that has to be considered.  Asking yourself, “What would happen to the community if my organization didn’t exist?” is a helpful question to clarify the key asset you bring to it, and how to safeguard that addition.  Necessity is the mother of invention.  We all need to be extra creative–perhaps create a new partnership–to achieve the results we need this year.