We’ve all heard about it, and most of us have experienced it: the drop in charitable giving from corporate America when their earnings take a hit. Expect more of the same – potentially a lot more – in 2009. How do you minimize the effects of a down economy on your own budget or, worse, your own survival as an organization?
I have always believed that a not-for-profit organization should be run more like a for-profit business. We even have a workshop that teaches nonprofit management teams how to do more effective planning and budgeting in challenging times, and we have part-time financial professionals who help smaller organizations keep their books and produce better financial reports for their boards.
In that same vein an interesting article just appeared in the Los Angeles Business Journal in which Roger Reck, a Los Angeles area fundraising consultant, makes a great point. His reader is the corporate giver, and he tells them rather than shutting off the spigot just when the money is most needed, they should be more discriminating in their giving, getting some degree of comfort that the organization is actually doing good with the money, rather than simply having a great story and well polished pitch.
That means not just fundraising but prudent financial management, capable human resources and, of course, strong programs that actually deliver value to the community for the dollars they collect. Collectively, that is an organization’s “value add,” what they deliver for the money they receive.
He says to CEOs: look at the organization before you write a check. I say to the organization: get your act together. Run your organization like a business. Build successful programs and close down unsuccessful ones, and success means financial success as well as program effectiveness. A solid program that loses money every year will not be around long and that doesn’t benefit anyone.
As always, I welcome your comments and opinions.