Significant Non-Profit Financial Crunch: using Option Solving

Non-profits are facing enormous funding challenges right now unless, of course, they are directly connected with the Haitian earthquake disaster. This is combined with their particular challenge in recent years, where the donor trend has been toward making specific spending requests for their donations. Such reasonable requests have severely reduced the amount non-profits can spend on general administrative and running expenses. Added to this, for most not-for-profits, have been their income reductions during 2009 and now with the Haitian disaster most giving is going in that direction.

By mid-year 2009 an important international arts festival in a large north east US city was facing an impending squeeze on its state and local funding. It was fretting over how it was going to be able to sustain its incredible success over the years. Its executive director found herself pondering, with a couple of objective outsiders, how the festival could position itself, going into its summer festival, to avoid major cuts in its fall budget negotiations.

There was considerable discussion about the key question to be asked (see book “Smart Decisions”) and Latest Example. Once this was decided it was easier to determine the two bookends: again see Latest Example. Both were clearly unacceptable.

With these in place (see Latest Example), the executive director was able to see her immediate options. In this case, the proximity of the discussion to the actual event inhibited her ability to apply the best alternative. But the discussion helped her to see how valuable this exercise could be, so she requested a separate option solving session with her board members (post-the-event), where a new “one-mind” consensus could be hashed out on the best way forward. (Next week’s posting: How an IT executive solved his latest upgrade and downsize issues…Please also make COMMENTS for connecting with the author)

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