Changing Operations in a Down-Turn Economy?

In a recent Economic Summit hosted by the United Way of Tarrant County, several panelist discussed several factors that affect tax-exempt organizations. Linda Low and I presented suggestions on evaluating programs and operations in light of a possible decrease in funding. What programs are critical to the organization’s mission? How investments are critical component of earnings? Is the organizaiton in the midst of a capital campaign for a new facility?  These and other factors should be critically evaluated by key management personnel.

Board members must continue to protect the organization’s mission and exempt purpose. They must continue to be fiduciary stewards, strategic and generative. 

Executive directors and management must critically evaluate all significant programs and events, determining how expenses can be refined. If the organization is projected to receive 25% less in revenues, how can expenses be modified? Can the organization do MORE with Less and how? If programs do not meet the required criteria for continuity, don’t be afraid to limit or discontinue their use. There is no shame in burying the “dead cow”.  Management must be proactive and strategic. You must devise a plan and consider modifying the budget. Present your revised plan to the board for frank discussion, modification and ratification. 

Accounting personnel must continue to provide timely, accurate financial data for executive management. Internal and program controls must be monitored and assessed. 

Each significant department must continue to evaluate, modify and communicate the plan.

Communication with donors and grantors must be honest and transparent with valuable “exempt purpose” communication. As organizations continue to operate within their mission and maintain and enhance public trust, donors will continue to support the programs that are invaluable in our society.

Change is not easy, especially in economic turmoil. Critically evaluating the program effectiveness is a key factor in surviving and thriving in tough economic times.