Question: My nonprofit has been told that we should be expecting a 20% increase in next year’s budget. What should I do now to protect my nonprofit and my employees? Question Submitted by Josh from Georgia.

Dear Josh, the next fiscal year that starts on July 1st for most nonprofits will be extremely difficult. Many agencies that depended solely on government funding and did not take the opportunity to build relationships with foundations, individual donors and corporations will probably have to lay off some employees and curtail services. Some nonprofits might even be forced to close altogether. However, here are some practical tips you can use

1. Identify how much money you actually expect to loose from the cutbacks. If you have a $2 million dollar budget, do you expect to have to raise $200,000 or $400,000?

2. Once you know the amount you need to raise, break it down even further. If you need $400,000, can you raise $200,000 from foundations, $100,000 from your dinner and $100,000 from donors?

Along with these points, there are some things you can do with your contractors to prevent additional cuts. Here are some suggestions.

1. Are you attending every meeting you are invited to? This includes any training your funder is going to.

2. Have you invited your funder to visit your agency? Many contractors and foundations want to visit your agency. Make sure and have coffee and pastries when they do visit.

3. Ask for the opinion of your funder? It’s important to know what they are thinking. In fact, its simply courteous to let others talk. As Executive Directors and managers, we like to be the ones talking sometimes.

4. The last point is very important. When a funder visits you, put a sign on your front door that says “Welcome (name of funder)”. Put about four of these around.

The question is difficult, but the answer is even more difficult. As nonprofit Executive Directors, most of us did not expect we would be sales persons. We thought we would be working with children, families and others in need. The reality is that your ability to be a sales person will lead to the help you expect these groups to receive.

To be brave in this situation is to understand that leadership is being a salesperson for your nonprofit. To be weak is to beleive your destiny has been predetermined and allow your services to be reduced and staff to be laid off?

These are just my thoughts. What do you think? Post a comment.

If you'd like me to expand on any point or answer a new question, please e-mail me at info@thenonprofitnetwork.org.This is an official blog of http://www.thenonprofitnetwork.org/.

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Question: With federal, state and local governments spending less on social programs because of the looming budget crisis, what actions do you recommend nonprofits take to protect ourselves? Question Submitted by James in Utah

With many nonprofits receiving some sort of government funding, the current national financial crisis will more than likely affect your nonprofit. Even those surviving from foundation or individual donors will more than likely see a decline in funding. The reality is that even though we don't know how much we will be affected, we have already seen all 2007 stock market gains lost in the first few weeks of 2008. Therefore, foundations and individual donors will have less money to donate. So what do you do now to protect your nonprofit?

1. Begin working on your 2008-09 budgets now. It's important to know what funding you are sure to get and what funding is at risk. Take time to understand your funding. Do not see this process as something you have to do? Look at this process as something you need to do for yourself.

2. Review every budget item and position to make sure they are absolutely necessary. If you believe you will need to go through lay offs, take time to understand where they may come from.

3. If you have a billing problem on any of your contracts, figure out how to solve this now while you have time. When you don't have money coming in, you don't want to be caught in a situation where your funders aren't paying you because you didn't do something right. This is free and easy.

4. Begin to identify your 2008 individual donor process now. When will you mail your solicitations and who will you call? Your individual donors can buffer the drop in government funding.

5. Identify and plan your fall 2008 dinner now. Focus on how much you want to net. This is the only thing that matters. Your annual dinner is not about PR. It's about raising money. period! If you know that you will have a cash flow problem in October, put your dinner in October. If you know you will need an additional $50,000 during that time period, you still have time to raise it.

6. If you've had an annual dinner before, solidify your corporate sponsors now. If you have never held a dinner before, organize it now or don't have one this year.

These are some basic answers on how to protect your nonprofit from the economic turmoil. If you'd like me to expand on any point or answer a new question, please e-mail me at info@thenonprofitnetwork.org.

This is an official blog of http://www.TheNonprofitNetwork.org. You can now post your first 3 jobs for FREE, Post your FREE consultants ad, list your nonprofit organization, post your resume, freebie item and nonprofit press release.