Connect With Us
YouTube
RSS

« The Price of Greed | Main | Hurricane Relief Efforts (#4) »

Tips for NPOs Threatened by the Financial Crisis

September 22, 2008

Storm_clouds_2Back in February, we asked whether your organization was recession proof and, based on an analysis of more than 6,500 mid-size nonprofits conducted by the New York City-based Nonprofit Finance Fund, shared five things nonprofits could do to weather the next one.

Well, that recession, while not confirmed by government statistics, is upon us, and NFF is back with three recommendations for organizations threatened by the deepening financial crisis:

1. Review and optimize three critical aspects of financial assets: cash deposit risk, concentration of investment risk, and concentration of revenue risk.

2. If a reliable revenue source seems questionable, consider ways to diversify revenue sources. Avoid over-diversification (i.e., new and multiple lines of business). These give rise to "mission creep," may carry high entry costs, and frequently increase fixed costs, therefore increasing financial risk.

3. Make contingency plans for downsizing if you know or suspect you will lose funding. Nonprofits frequently use furloughs, small across-the-board salary reductions, and consulting arrangements to offset temporary revenue reductions. However, if it looks like funding has disappeared for good, consider partnering or merging with other complementary or similar organizations. Be wary of partnerships that could ultimately increase costs.

For more good advice, visit: http://www.nonprofitfinancefund.org/.

-- Mitch Nauffts

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Contributors

Quote of the Week

  • "I loved to read; I loved to listen music; and I loved to write. Those three things."

    James Joyce

Subscribe to Philantopic

Contributors

Guest Contributors

  • Laura Cronin
  • Derrick Feldmann
  • Thaler Pekar
  • Kathryn Pyle
  • Nick Scott
  • Allison Shirk

Tweets from @PNDBLOG

Follow us »

Tags

Other Blogs