The role of a Board during an economic downturn

The news has been filled with stories of local nonprofits struggling to deliver their mission because of a lack of contributions. One local nonprofit laid off 11 people in one day! The staff of another took a cut in pay and benefits in an attempt to continue the quality of their programming. Yet another decided to reduce the amount of revenue budgeted for the next fiscal year. What is the role of the Board during these challenging times?

All too often, boards decide that they want to cut expenses and spend a majority of their time issuing challenges to the staff to “cut 25% from expenses!” Although it may be a reasonable response to these challenging times, as one Board member stated last week: “The real challenge is how to increase revenue. We seem to be focusing on the wrong side of the equation.”

A reasonable response that might be suggested by a Board is to review the ways in which the organization is currently raising money and to invest more heavily in the identification, cultivation and stewardship of donors. Some things to test:
· Is the organization’s mission still relevant? If so, how is the community being made aware of the need for the mission?
· Is the organization managing the expenses of events? Is there appropriate oversight to ensure that event expenses don’t exceed 30% of gross revenue?
· Are the organization and its Board actively identifying new donor prospects?
· Are donors being continuously involved in an understanding of the mission and activities of the organization?
· Are donors being thanked sufficiently?

This is the time for Boards to review their oversight and involvement in the raising of revenue. And perhaps this is the time to invest in the recruitment of additional donors to the organization. The time is long past for honest conversation between boards and staff regarding how they are raising money, and more important, how much they are spending to raise that money.