"Charities that diversify their funding streams, collaborate with partners and get their income strategy right are more likely to weather the current economic crisis and emerge financially secure on the other side."

For more information, tips and strategies on mergers and collaborations please read Strengthen key relationships: collaboration and the economic downturn, and view the collection of articles in the "Restructuring Information & Resources" and "Non-Profit Mergers Information and Resources" sections found below (in the www.nonprofitrecessionwatch.com blog).

Over a dozen Detroit foundations have decided to pool their money into an emergency fund for struggling charities, and they are also investigating ways in which they can strategically use funds that have been ravaged by the stock market decline. By pooling their funds, approximately $100 million over years from 10 foundations, this collaborative foundation network will attract skilled workers to the city, fill empty houses, and occupy empty retail storefronts. The impact of collaborating and leveraging expertise and funds has led to a refreshing strategic approach to the issues facing the Detroit economy.

Not only will this pooled fund leverage the capacity to restructure Detroit’s economy beyond the capacity of any single foundation, the effort has also attracted additional funding from three national foundations (W.K Kellogg, Kresge, Charles Stewart Mott) which will further enable this collaborative foundation network to fulfill upon its mission.

Do you know of other collaborative initiatives that have arisen as a result of the recession – either on behalf of foundations or non-profits? I would like to profile them – email me at blog [at] restructure.ca.

Key findings from this report:

• Non-Profit organizations in Ontario are concerned about the potential impact of the recession on the organizations they lead,
• Approximately one-third of the organizations were already experiencing serious economic impacts and there is fear that the recession will get worse,
• A number of community and social service organizations are realizing an increase in the demand for their services,
• Stock market declines have impacted the value of endowment funds
• A number of corporate donors and sponsors are frequently not renewing sponsorship/grants

However, Ontario’s non-profit sector is working to develop survival strategies, says Robin Cardozo, CEO of the Ontario Trillium Foundation.

These strategies include:

• sharing best practices,
• looking for new ways to collaborate
• looking for new ways to diversify funding and fundraising
• engaging funders in ways to have greater impact with fewer dollars
• reducing costs

The non-profit sector in Ontario is enriched by this research and as such, I would like to congratulate the Ontario Trillium Foundation for deciding to conduct this research, having this important dialogue with non-profit organizations, and sharing this research with the non-profit sector.

For more details and information on this report please read the full report -"Challenges and Opportunities for Ontario’s Not-for-Profit Sector During Tough Economic Times" – on the Ontario Trillium Foundation website.

The ReStructure Conference, held this May in Toronto (date tbd), will help non-profits understand the current economic impact on Canadian non-profits, and to provide information and strategies on how to restructure, funders will sit on a panel at lunch to provide their perspective on how we begin the dialogue that has been brought about as a result of this recession. If you haven’t already registered for information on the conference – please go to http://www.therestructureconference.ca/ and register on the site to receive an invitation to the “Forward Together” Conference held in Toronto in May (date TBD).

Information from CompassPoint?
By the way, CompassPoint has not yet uploaded presentations from their Nonprofit Forum to their website. I will provide a link to the conference presentations as soon as CompassPoint uploads the presentations from the sessions to their website.

In the meantime…
Here are some tips and lessons from a Restructure-er
If you are interested in learning more about what you can do to restructure your organization, and if you have not already read my articles on “Strategies to proactively assess the impact of the recession” and “Leaner Times call for Leaner Measures”, please do so as there is a large amount of information in these articles that may support you with your efforts. You can find also find these articles in the "Restructuring" information box below.

Here is a summary from the Strategies to Proactively Assess the Impact of the Recession on Your Organization:

I recommend that leaders of non-profit organizations assess their situation vis-a-vis the economy, do it now, make a plan based on a careful assessment and involve your management team in the discussions, and follow that plan. Proactive steps today will help you manage the impact of any potential decreases in funding caused by the recession.

Steps to take to proactively assess your situation

STEP 1. Assess if, and how, your organization will be impacted by the recession either by a decrease in funding/donations and/or an increased demand for services.

STEP 2. More precisely assess the potential impact of the recession on your organization. How much will funding decrease? How much will the demand for services increase?
After assessing the potential impact of the recession, organizations should more precisely assess the impact of the decreases in funding or increased demand for services in order to adjust their budgets and strategies.

• Will your organization see an increase in the demand for services?
• Will it also see a decrease in funding?
• If you believe that your organization will see an increase in funding and an increase in the demand for services – have you assessed if the increase in funding and donations will cover your increased cost to deliver more services?
• If your organization will not see an increase in demand for services, will it see a decrease in funding and donations?

See chart 1 and 2 at this link http://www.charityvillage.com/cv/research/rom58.html for more information on how to assess where your organization lands on this funding matrix of “need and loss”.

Questions to ask when assessing the impact
The following list of questions will also assist you to further assess the potential decrease in funding from each source: government, foundations, corporations and individuals.

Re: corporations and foundations

• Are you expecting to receive sponsorships, donations, or grants from corporations that have been heavily hit by the recession, such as those in the auto industry?
• Are you expecting to receive a grants from a foundation whose fund invests in and has consequently been heavily hit by the decrease in the stock market?

Re: individual donations

• Will Canadians feel more or less empathetic to your organization’s cause during a recession?
• Does your organization have brand recognition with the average Canadian?
• Do you have a close relationship with your donors?
• Do you know if the pattern in donations from individuals has changed in the last six months?

STEP 3. More tips to come…
For information on how to proactively restructure your budget and operations to prevent the need to cut positions or projects/programs or services in light of a decrease in potential funding, read Leaner times call for leaner measures. Here, you will learn 15 tips that you can use to implement leaner measures and safeguard your organization in a time of recession.

That’s all for now. Please feel free to submit any questions that you may have about restruturing non-profits – submit questions to blog@restructure.ca.

Thanks.