Here are five ways to save, rescue, or improve a nonprofit or a nonprofit program without adequate funding instead of merging.
The concept of form-changing offers a wide array of possibilities for nonprofits. For example, St. Boniface’s Day Care Program changed from a daycare to a half-day preschool. They turned to this service because of its location. Their distance from most employers meant parents were frequently late for pick-ups placing the staff in numerous awkward predicaments. By changing into a preschool, St. Boniface kept the essence of serving children with a quality program but changed the form.
Here’s another example focusing on location. Manatee Glens, a nonprofit located in Bradenton, Florida, introduced and received funds for a hospital-without-walls for teens suffering from co-occurring emotional and alcohol, and drug problems during the Great Recession. The resulting service enjoyed huge clinical success and cost reductions of $175 (from $325 to $50) daily per family.
Sure, you’ve already thought of this. But have you identified your most important programs? Do you know your actual program costs? Might you consider increasing your fees? Or what about offering premium services at a higher price?
Don’t give up until you consider all possibilities. You might find it even makes sense to close out your “Hope Diamonds” if your future lies elsewhere. Kimberly Clark closed down several profitable mills when it decided its future resided offshore.
You will find the examples and discussion in Nonprofit Sustainability valuable in discerning which program to explore and invest in for upgrades, i.e., those that provide the most impact and profit.
In a Wall St. Journal article, Michael Kaiser, President of the Kennedy Center, states, “When there are economic challenges, the first things that staff and boards cut are programming and marketing, and that’s the worst thing you can do. You guarantee yourself you’ll have less revenue next year, and that’s how sick organizations get really sick.”
Kaiser suggests budget cuts, “but where you cut is crucial.” In arts programming, he’s never encountered a budget he couldn’t cut in the back of the house. In your organization, you probably have made budget cuts. From conversations with nonprofit executive directors, organizations continue to find new ways to save money and often reduce workloads by rethinking how they execute programs.
Be careful not to dismiss this one. Consider less obvious cuts, like reducing your fixed costs. What if you reduced your service hours? Might you reevaluate your insurance needs or select a higher deductible? Or what you charge for service. One client provided a service for seven years and never renegotiated the contract until they reviewed their contracts.
What about volume discounts? As you explore, explore partnerships with nonprofits offering bulk buying opportunities. How about sharing back-office services like bookkeeping, technology, or finance or buying together to obtain discounts on goods and services?
Passing on a program to another nonprofit has probably been the most common and satisfying alternative to mergers for programs that no longer fit your mission. Many examples of this alternative exist. Here’s one. Meals on Wheels Plus of Manatee took over the Alzheimer Respite Care Program when Volunteers of America ended services in their county.
Is another group seeking to offer more services in your community?
Okay, so this is the least popular alternative. However, sometimes you need just to stop the pain.
PACE Center for Girls closed its elementary school. However, in time, they hope to re-open the program. If you must close down a high-mission program, what lesson have you learned that you will build upon when you start it again? Are there any actions you can take now to improve a later start-up?
Here’s another example, The Suncoast Workforce Development Board opened and then closed because of financial reasons, a donated Ben and Jerry’s Ice Cream franchise to serve troubled youth with entrepreneurial interests. The Workforce Development Board continued to seek creative opportunities to help youth, and the Ben and Jerry’s experience sharpened their knowledge about what works. Over time they developed award willing programs for youth using the lessons learned.
And, still, one more example of building on the lessons learned. Girls Best Friend Foundation closed after thirteen years of serving young women in the Chicago area. Their website offered a final report, program evaluation, and a summation of what worked.
If you must close a program, can you find a way to share what you learned with the community? How about an article in your national newsletter, blog entry, or workshop?
Sir Alan Patrick Herbert writes, “Nothing is wasted, nothing is in vain: The seas roll over, but the rocks remain.”
Saving programs or a nonprofit is heroes’ work. Fortunately, as a nonprofit leader, you’re up for the task. You identified your mission priorities and the financial impact of each of your programs. With this information, you are ready to find a way to save programs that matter.
For more answers, check out the Nonprofit CEO Library.
Please don’t hesitate to reach out if you want to know more. I’d love to help you and your nonprofit take the steps you need to succeed.
Karen Eber Davis provides customized advising and coaching around nonprofit strategy and board development. People leaders hire her to bring clarity to sticky situations, break through barriers that seem insurmountable, and align people for better futures. She is the author of 7 Nonprofit Income Streams and Let's Raise Nonprofit Millions Together.
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