Tips from the unemployment line for struggling non-profits

My local United Way published a brochure titled “Help for Hard Times Guide” as a way to help people with their financial decisions during tough economic times. Yesterday, I came across a copy of that document and the following quote on the inside panel grabbed my attention:

“Reduced income is going to require expert money management. This checklist will help you get started.”

While this is as obvious as the nose on your face, it struck me that this is also the case for non-profit organizations who are dealing with falling revenue. So, just out of curiosity, I decided to scan the checklist and see if there was any good advice that might also apply to non-profits.

The bolded text is the United Way’s advice, and the italics text were the thought I had while reading:

  • Determine your financial resourcesWhat a great idea. Make a list of all the agency’s “resources” and determine what can be maximized and leveraged. Even more important might be to review all revenue streams and circle back around to those donors and funders for personal conversations about their support and if they can do more to help.
  • Plan a realistic budget. While this is always a good idea, I’ve seen too many non-profit budgets with “plug numbers”. During tough times, an extra special dose of reality is probably sound advice. Real numbers with real strategies behind those revenue numbers.
  • Stop all use of credit. This might be difficult to do, but it is still sound advice. How many times have you seen a non-profit dig itself into a hole that it can’t crawl out of all in the name of “tough times”.
  • Alert your mortgage holder or landlord. Yes, engaging the bank or landlord might open up unforeseen opportunities. It might engage a stakeholder in a fruitful, solution-oriented discussion and you might see things that weren’t obvious to you.
  • Alert your utilities. Same thought as the previous bullet point. There might be some payment plan options that you weren’t aware of. They might even be able to help you better understand how to reduce your agency’s usage and save money.
  • Alert creditors. Ditto . . . same as the last two thoughts.
  • Set priorities. Sometimes there are more accounts payable than there are accounts receivable. Right? Well, if and when this happens, it is probably smart to know what gets paid first.
  • Cancel unnecessary purchases/services. We all have things that we can live without (e.g. cable service, newspaper subscriptions, etc). Surely, the same is true for your agency. However, when we get used to things, we tend to forget that they aren’t essential. Engaging volunteers and an outside set of eyes might be a very valuable exercise for a non-profit executive director.
  • Consider refinancing. Restructuring loans and stretching payments over a longer period of time might free up some working capital during lean years.
  • Sell unnecessary items. Determining which assets are essential to the mission today versus what you might be sitting on for tomorrow (e.g. vacant land, old office furniture, etc), might create some working capital and make your cash flow situation a little easier.

Impressive . . . nice job United Way! Not only did you create a good resource for people in the unemployment line, but you also created a nice checklist for struggling non-profit agencies.

Of course, these are all temporary fixes because it is difficult to live forever with inadequate resources. Once these adjustments are made for survival, it is advisable to quickly pivot to engage your agency’s donors, board members, and volunteer supports in creating a resource development plan. This ensures that your focus isn’t just on managing what’s left and instead is on developing goals and strategies to secure the necessary funding and get back to a place where you’re thriving and mission-focused.

What additional tips would you add to the United Way’s punch list that I shared with you? Please scroll down and use the comment box below to share some best practices because we can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847


    1. Thanks for sharing that YouTube video. I agree that it was awesome. I appreciate you reading DonorDreams blog. Please recommend it to your friends and colleagues.

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