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Nonprofit Leaders Containing Costs, Retaining Staff

(April 6, 2009) Despite the tough economic times, many nonprofit organizations are taking steps to shore up their bottom line without sacrificing their missions—and their leaders are treating layoffs as a last resort, a survey shows.

In a recent survey of nonprofit leaders by the Bridgespan Group, most chief operating officers and chief financial officers said layoffs would prevent their nonprofit from serving their constituents—who face even greater need due to the recession.

An article on managing in the tough economy explores the cost-cutting methods being used by nonprofit leaders to shore up their bottom line without sacrificing their missions. The findings are listed briefly below.

  • Redeploy staff and volunteers: Instead of terminations, some organizations are redeploying employees to other key roles – especially fundraising.
  • Consolidate operations: Longer-term planning can help organizations determine where and how to invest their resources within the organization. Citizen Schools, a national network of after-school education programs for middle school students, streamlined its cost structure through a merger of the organization’s Boston and greater Massachusetts regions.
  • Increase communications and transparency: All stakeholders—employees, board members, funders, and even constituents—need to know where the organization stands and what its plans are. Employees also need to know where they stand personally.
  • Cultivate volunteers to take on tasks formerly done by staff: Some organizations use volunteers to perform tasks usually managed by staff, freeing up more resources for direct service. Others are finding great resources in individuals who are between jobs and eager for the opportunity to put their skills to work, even if for a short period of time.
  • Tap the expertise of board members: They can lend specific expertise to organizational challenges; pressure-test assumptions and plans; and help in fundraising. Organizations whose board members have expertise in law, real estate, finance, and marketing are finding opportunities to draw on this expertise in new and meaningful ways.
  • Attract and retain great people: Finding and keeping great team members is no less essential in a difficult economy; in fact, it is imperative to fulfilling the organization’s mission. While emphasizing that retention is their primary goal, some leaders report finding that the caliber of talent now available is very high and that they are cultivating potential staff.

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