Outline of a Financial Stabilization Plan

Nonprofit organizations across the country continue to experience serious financial strain during this recession. If you are in a leadership role and are wondering just what to do first or next to address the situation, here is a list that will help.

I. Recognize the reality of the situation.
a. Do not delay in addressing the challenge. Doing so will make meeting it all the more costly.
b. Allocate time in staff and board meetings for participants to express their feelings around the present predicament.
 

II. Involve everyone in addressing the challenge.
a. Brief stakeholders on the situation and let them know that there is a plan to address it.
b. Solicit and consider all reasonable suggestions for saving on expenses and generating new income.

III. Review and revise the operating budget.
a. Re-assess projections for both earned and donated income.
b. Reduce expenses in this order:
i. Delay purchases of major equipment and other items.
ii. Delay contracts for new services.
iii. Reduce materials and supplies costs.
iv. Reduce contracted services.
v. Reduce part-time and temporary personnel.
vi. Reduce full-time, permanent personnel.

IV. Prepare the plan document and implementation schedule.
a. Draft the FSP with components for communication, expense reduction, fee-for-service retention, and new donation sources.
b. Brief board and staff members.
c. Draft an implementation schedule and assign task point-people.

V. Investigate new special sources of income.
a. Research and pursue prospects for significant in-kind gifts.
b. Research and pursue prospects for special designated gifts.
c. Investigate and pursue increased use of volunteers as feasible.

VI. Monitor, evaluate and learn from the experience.
a. Monitor execution and progress with frequent regularity.
b. Keep board and senior staff members informed.
c. Amend the FSP as changing circumstances warrant.
d. Include insights gained in the next Strategic Plan.