Wednesday, March 4, 2009

Dear Dewey & Kaye Consultant

Dear Dewey & Kaye:

I'm a board member of a nonprofit agency that provides various social services to low–income individuals through four centers located across Allegheny County. In this funding environment, it looks like we're going to need to close one of our centers to stay afloat. This is the hardest decision our board has ever had to make — what should we take into consideration?

Sincerely,
Distressed

 

Dear Distressed,

First of all, before doing anything as serious as closing a center, consider all other options for cutting costs or finding new funding sources. Dewey & Kaye recently published an article providing lots of practical suggestions to help nonprofits manage in this economic environment (available here at: http://www.deweykaye.com/dewey/surviving_financially.php). If your board determines that there's no other option but to close a site, you have a lot to consider. Look at the financial picture for each site separately — does closing one make more financial sense for your bottom line than others? Also consider your relationships with each community you serve and how your funders will react to various decisions; this could provide additional insight that could help inform your decision. Last but not least, your board should consider the characteristics of each community you serve. What is the relative level of need? Are other organizations present in a given neighborhood that could help fill your vacancy if your site closed? While this analysis won't make it any less painful to close a site, it should help to clarify your board's decision and provide the due diligence necessary when taking any serious measure affecting the organization.

See the Tip in this month's Mosaic for some helpful resources in conducting fast, low–cost research on the places you serve.

Shawn Sheridan specializes in nonprofit strategic business planning. Contact Shawn at ssheridan@deweykaye.com.