Nonprofits rely on need for business plans

As the new nonprofit theory goes, entities that implement a traditional business plan will weather the economic downturn and emerge unscathed.

Among the nonprofit leaders at the Springfield Area Chamber of Commerce’s Aug. 6 Nonprofit Roundtable, Leah Jenkins knows the theory well.

Shortly after being named executive director of the Springfield Regional Arts Council last year, Jenkins faced a budget shortfall that would test her nonprofit organizational skills.

“We received a $1.4 million federal grant that funded 50 percent of our operating budget (for the) last five years,” Jenkins said. “That runs out at the end of this month. I was challenged when I took over the leadership position to make up over $250,000 a year in one year or even to transition out of having that kind of operating budget.”

Jenkins’ message was echoed by 27 nonprofits represented at the chamber event, held every other month.

Jenkins and her board members, who she describes as very engaged, opted to turn to outside help. “We brought in an outside consultant from Chicago,” Jenkins said.
The board was restructured and began meeting quarterly rather than monthly, at the consultant’s urging.

“I think we’ve done really well,” she said. “We had to let one person go. It all really came out of a strategic planning process and having this outside vision from our consultant.”
Jenkins said running the arts council more like a business was a strategic board decision.

“The board worked hard to meet needs and we couldn’t have done it without structure and strategic planning,” Jenkins said. “We are always forced to run really well.”

Jenkins said despite the loss of the U.S. Department of Education grant, the arts council has a $60,000 surplus from last year thanks to cutting some programs but maintaining core offerings.

The surplus, Jenkins said, has been put into a capacity-building fund through the Community Foundation of the Ozarks.  

SRAC Board Member Rita Baron said she was able to offer her business skills.

“From my business, basically like every other business owner, before you get to the point where you’re really panicking, let’s have a plan in place,” said Baron, owner of Baron Design & Associates LLC. “Let’s be creative, let’s put our brains together.”

Bart Brown, Ozarks Food Harvest president and CEO, believes nonprofits as a whole were a little more prepared for a recession than for-profit peers.

“They had to make deep cuts and really re-evaluate their business models to be much more streamlined,” Brown said. “We were already there. We even had to step up. Even though our donations might be down, we really have to be better business managers.”

Brown believes a recent report by The Chronicle of Philanthropy that first-quarter giving nationwide has increased 11 percent is means for optimism.

“I think people are more aware how easy it is to be in a position of need,” Brown said. “It helped people to be more empathetic and less judgmental.”

Donations to Ozarks Food Harvest in fiscal 2009, ended June 30, 2009, totaled $11.4 million, according to the organization’s annual report.

Brown said cash and in-kind donations for fiscal 2009 ending June 30 total $12.9 million.[[In-content Ad]]