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Coping with Cutbacks 
Time to be Bold!! 
 
America's Byways Resource Center Training 
2/25/10 

Emil W. Angelica
Emil.angelica@ccgpartnership.com
612-926-0122

Community Consulting Group name and logo


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Agenda

1.  Change
2.  Process for addressing current environment
3.  Financial scenario planning 
4.  Strategies
5.  Tips for financial challenges


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Time to Be Bold!

When times are tough:
 •  Make a Difference
 •  Demonstrate Relevance
 •  Implement Change


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Dancing Landscapes

(drawing) 6 lines forming 3 peaks across page


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CHANGE = (D*V*1st) > C

D = Dissatisfaction with the present situation
V = Vision of how things could be different
1st = First step to bring about the change
>C = less than the perceived cost of staying in the present situation

created by Michael Beer


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Strategy Generating Process

1.  Know Yourself - Where are you now and where are you going in the future
2.  Clarify the problem or opportunity - Fully understand the scope, magnitude, and 
implications - scenario planning
3.  Brainstorm strategies - Generate ideas for addressing the problem or opportunity
4.  Select the viable strategies - Arrive at the best strategies for the organization


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Know Yourself

1.  Lifecycle Stage

2.  Core Programs

3.  The Program Model(s) 


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Exercise - Know Yourself

1.  Where are you in the organization's lifecycle?
2.  What are your core programs?
3.  What do you see through analysis?
4.  Is this the right model(s)?


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Core Program Analysis

(graphic drawing: 2 Cartesian line graphs side by side. Each graph has
a cross drawn with a vertical and horizontal line within. The first has
label at bottom, Cost. The second graph has the bottom label, Revenue.)


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Scenario Planning

Envision several possible financial futures and have a strategic conversation about your best responses to each. 


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Scenario Planning Process

1.  Develop 2-3 possible "real" financial futures
2.  Flesh out the implications of these futures on your organization
3.  Pick a future that is worse than you think


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A Way to Develop Scenarios

1.  Identify 4-6 major revenue sources that can vary and are unknown - select a worst case scenario/contingency

2.  Flesh out the implications of each on programs and infrastructure and the organization

3.  Develop three "real" futures based on these factors and flesh out implications for your "world"


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Workbook Exercise - Clarify the Scope of the Problem (Fill in the Chart)

1.  Identify the revenue sources and their ranges
2.  Identify any restrictions in the use of the funds
3.  Identify the impact on programs
4.  Identify any indirect impact


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Workbook Exercise - Describe the Scenarios

1.  Make revenue projections for each scenario
2.  Identify implications for programs
3.  Identify implications for organization
4.  Identify implications for people being served


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Who Should Address The Problem?

1.  5-10% - Can be resolved by staff - should not affect programs
2.  10-20% - Will need to involve Board - could lead to loss of programs
3.  25+% - Will need to involve Board - could lead to rethinking programs and 
structure


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Strategies To Consider

1.  Stop, Drop, and Roll - Approach to solving a financial cut
2.  Shared Services - Administrative and programmatic sharing
3.  Engagement Strategies - Present a larger, united approach
4.  Strategic Restructuring - Merger/program spin-off


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Stop, Drop, and Roll

1.  1/3 fund raise
2.  1/3 make cuts
3.  1/3 shift money

Jerry Cutts


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Strategy of Engagement


1.  Work in concert with others to create a common vision and share resources 
necessary to realize that vision

2.  Consider partners in all sectors and those outside your mission to address 
community issues 

3.  Seek a better blending of the government, nonprofit and for-profit sectors


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Arenas of Influence

(Graphic drawing of 4 concentric ovals)

from most inner oval to outer:
Your organization

Your board and their network

Your allies and partners

The broad community (all sectors)


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Collaboration

3 photos:
student in library with notebook
2 health care professionals
2 workers at desktop computers

lines go from photos to diamond with the words, Screening Program


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Level of Control vs. Resources/Strategies

(graph)
Y axis, Control, values from low to high
X axis: Resources, values from low to high
No coordinates on graph

Bottom of page: Coping With Cutbacks by Vincent Hyman and Emil Angelica.


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Level of Control vs. Resources/Strategies

(graph)
Y axis, Control, values from low to high
X axis: Resources, values from low to high
Photo of man in business attire along line where x value is high and y value is low.


Coping With Cutbacks by Vincent Hyman and Emil Angelica.


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Level of Control; vs. Resources/Strategies

(graph)
Y axis, Control, values from low to high
X axis: Resources/Strategies, values from low to high
Drawn slope from high, low to low, high
At the point on the slope where the values are equal for x and y, a photo of people including the man from the previous Slide's photo in a meeting .


Coping With Cutbacks by Vincent Hyman and Emil Angelica.


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Shared Services

Find a partner(s) to share administrative services with to keep costs down and maintain skills and experience. Examples:

1.  Back office services and equipment  (administration and finance)
2.  Fundraising
3.  Data collection, analysis and evaluation 


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Social Media Technology

•  Use Networking Technology to expand reach
•  Develop a powerful website - a place where people can do business
•  Use different techniques for different audiences


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Strategic Restructuring

1.  Spin off a program that you cannot operate to another organization
2.  Look for a collaboration or merger partner for all or part of your organization
3.  Take on another organization's program to gain efficiencies based on scale


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Workbook Exercise - Develop Strategies

For each scenario develop one or more strategies to address the revenue shortfall.  The 
strategies should answer the question:  What will we do if these conditions exist? 


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When You HAVE to Raise Money

DO
1.  Play to your lifecycle stage - one time grants
2.  Get the board committed to a fund raising goal/give them the tools to do it
3.  Use your networks - bet on board and volunteers
4.  Meet with funders whenever possible
5.  Special events should be only done with volunteers and/or board members


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When You HAVE to Raise Money

DON'T
1.  Expect funding the first time you apply to a foundation
2.  Contract out your fund raising
3.  Ignore the long term when fund raising
4.  Contract with a fundraiser for a percent of funds raised


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Tips When You Have to Cut

DO
1.  Make a few big cuts vs. lots of small cuts
2.  Cut quickly and all at once vs. slowly over time - if you cannot make cuts all at once role out phases
3.  Pay attention to funding sources and restrictions in the use of funds
4.  Pay attention to implications of cuts on fixed and indirect costs
5.  Keep the key people on the board and staff involved in the thinking on cuts
6.  Communicate, communicate - stay in the center of communication


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When You Have to Cut

DON'T
1.  Be tempted to borrow money or mortgage your future
2.  Get into too much belt tightening - negative perceptions
3.  Go against good management and your own policies
4.  Lose your "stars" they are hard to replace
5.  Discuss possible solutions with people who are not part of decision making


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Overhead/Administration Considerations

1.  Make sure overhead cuts won't jeopardize your ability to be accountable
2.  Review grants for overhead or administration requirements or limits
3.  Pay attention to the impact of cuts on the administration's per cent of budget
4.  Think about the internal and external messages that are sent