Budget Cuts

“I’ve made many sacrifices, but I have never compromised.”Karl Lagerfeld

Budget cuts are everywhere and no matter how one approaches the process, it is a painful and challenging operation. A big temptation is to institute across-the-board cuts that require every department to cut the same percentage. This can be the easiest approach and appear to be the most democratic but it can also lead to decisions that are ultimately not in the organization’s best interests. For example, cutting development staff just when raising money is harder than ever, or cutting programs at the core of your long-term volunteers’ and donors’ commitment. More challenging, but sometimes more strategic, is to look at cuts on a line by line basis and to consider the long-term and ripple ramifications of each cut. At Abdale Consulting, we call this part of “Strategic Realignment” and we bring a fresh eye and a strategic perspective that can help an organization get lean yet remain viable.

Another temptation is to make a series of small cuts in hopes that the funding environment will change before bigger cuts are necessary. This can demoralize staff and encourage anyone who can to jump ship, and diminish the agency’s credibility with existing and potential donors. Wiser in the long run may be to bite the bullet just once, make bigger and deeper cuts upfront, and reassure the staff that remains that their jobs are secure.

There is also an opportunity for executives and senior staff to lead by example and defer some compensation or take short-term salary cuts along with cuts to programs. The last thing an organization needs today is to be perceived by its volunteers and donors as the nonprofit equivalent of a bonus-taking Wall Street firm where executives put their own self-interest above the needs of their clients.

The biggest challenge of all is to not let fear sit in the driver’s seat when making these decisions. Franklin D. Roosevelt’s “We have nothing to fear but fear itself.” has never been truer or more applicable. Fear makes us small in our thinking and makes us distrustful of others just when alliances and collaborations are essential strategies for survival. It obliterates our ability to see opportunities and shows us a future filled only with wreckage and ruin.
Courage is what’s needed now – courage, faith and creativity. Faith that the money follow wherever our mission leads, as long as we keep our heads, operate with integrity and maintain the balance between altruism and pragmatism. Creativity flows much more easily when we trust in our selves and the rightness of our cause.