Survival Tips for Tough Times

Every day, Hawai‘i residents are confronted with more dreary news about the weakening economy in the islands. While many nonprofit boards and executives are scratching their heads wondering how bad it will be and how long it will last, most organizations are beginning to prepare for the increase in demand for services and looking for ways to shore up their support.

Sometimes it feels like salmon swimming upstream. The anticipated drop in government contracts and grants, which make up well over half of the nonprofit revenue in Hawai‘i, cannot be replaced by private sources. While foundation grants are expected to remain steady, we are already seeing business support waver in areas like contributions of goods and services for special events dropping off as businesses are feeling the pinch. And while individual contributions from Hawai‘i residents remained resilient in the recent downturn after September 11th, we did not face the same inflationary aspects of higher living expenses like we do now.

In search of revenue to maintain or even expand services that are needed, nonprofit organizations need to stick to basics and improve on their natural strengths. As outlined in past nonprofit industry studies conducted by the Hawaii Community Foundation, it is clear that nonprofit organizations differ widely from those who depend largely on government contracts and grants (health and human service groups) or who rely on a mixture of earned revenue and fundraising (schools and arts and cultural organizations) to the rest of the organizations, mostly smaller ones, whose support is derived largely from fundraising and grants. As tempting as it may be to consider new revenue strategies outside their known domain, these efforts often require new skills, systems and time before realizing any benefits. Organizations would be best served by intensifying or diversifying their efforts within their field of experience.

With respect to government support, nonprofit organizations will need to work hard to build their case for continued support in the midst of shrinking budgets. With needs everywhere, our public officials will be pressed hard to make tough choices. Early and constant communication with department heads and elected officials will be needed as more scrutiny will be paid to the operating efficiencies of organizations and whether they can demonstrate results. Organizations will need to look ahead to what is likely coming in the next budget cycles, anticipate where the emphasis will be for contracts and services and decide how best to position themselves in those arenas.

For those groups who rely on fundraising, the focus should be on individual contributions. Locally, as well as nationally, individuals provide more than 70 percent of all charitable contributions. Now is the time to make a special effort to acknowledge your contributors, to build stronger relationships and to communicate the needs and impacts of your organization. In nearly every giving study conducted, respondents point out that they give to organizations they believe are doing a good job and because they feel good by helping out.

Annual giving campaigns can look to improve results by establishing multiple levels of giving and to seek monthly contributions (donors give more when they are asked to do so on a monthly basis). With the phenomenal increase in giving over the Internet, organizations should be looking to bolster their web presence and to make it convenient for online giving.

Nonprofit organizations are faced with a familiar dilemma of having to do more with less. In an increasingly tight economy and increasingly competitive environment for support, most organizations will have to do better just to stay even. It is a time for staff and board members to renew their commitment to their organizations and reach out even more to garner support. Our community depends on it.