If any foundations in your area are giving specifically to help nonprofits weather the financial crisis, a Foundation Center site can help you find them. Click on the U.S. map and search by state, county, city, zip code, Congressional District, or type of recipient organization. Then click on the name of the grantee to see the name of the grantmaker and the amount and purpose of the grant.

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Before you cash that check, make sure you know exactly what you can and can’t do with it. In “Is That Money Really Yours?” (CharityChannel, January 7, 2009), Nancy Church tells you how to play by the rules. She recommends using a grant summary form that includes the date of the grant, the duration of the grant, any payment conditions, reporting requirements and dates, and the grant number. Then be scrupulous about following the conditions of the grant, particularly any programmatic restrictions and time constraints. To avoid serious trouble, never use funds for general operating costs if the grant is restricted to one of your program activities, and don’t deviate from the budget you submitted with the proposal. (Full article can be accessed only by CharityChannel subscribers.)

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Even small groups can raise money on the Internet. Online fundraising keeps growing, and it’s becoming the best way to identify new donors and younger donors. Samantha McGavin and Rachel Gouin make the case that even very small organizations can be successful in tapping that revenue base (“Online Fundraising Strategies for Small Budgets,” Grassroots Fundraising Journal, January/February 2009) and offer six tips:

1. Put a “donate now” button on every page of your web site. Make it possible to contribute with only one click.
2. Keep your web site up to date with exciting and creative content.
3. Send email updates and/or an electronic newsletter to your donors regularly—and always include a link that makes it easy to give.
4. Get your organization on one or more social network sites, like Facebook, MySpace or Friendster.
5. Use charitable donations sites, like Network for Good or JustGive, where you can register for free.
6. Do viral marketing: post compelling videos, photos and other material that donors will want to forward to their friends—and their friends will want to pass on.

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If you’re constantly writing proposals for the same organization and programs, how do you keep your energy and enthusiasm pumped up? Cheryl Kester addresses this in “How to Keep Plugging Away,” (CharityChannel, December 10, 2008). Her advice:

• Get fresh perspectives by talking to your colleagues and to those who benefit from your organization’s work.
• Look for new stories about how that work impacts real people
• Explain your organization’s work to someone who’s not familiar with it, and pay attention to their questions and reactions.
• Take a hike—real or virtual. Just make sure it’s a physical break from your proposal writing routine.
• Read examples of other proposals to see what new approaches grantseekers are using to ask for support. (Full article can be accessed only by CharityChannel subscribers.)

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Few, if any, nonprofit organizations will escape the knife in the current economic crisis. Good financial planning can help your organization survive, but your board and executive leadership will have to make difficult decisions.

When your organization is facing budget cuts, consider the following suggestions:

Prioritize, prioritize, prioritize. Which of the services you provide are most critical to your mission? Who are your most vulnerable populations? What are your “sacred cows”—the services or programs you absolutely will not give up or cut back? Once you’ve made those decisions, everything else should be considered for the scalpel.

Remember your mission. Many organizations creep away from their mission. This happens because we want to be all things to all people, because there are funding opportunities that require us to shift just a little, or because no other organization is willing to provide a needed service. Are you suffering from “mission creep?” Can some programs be dropped? Use your existing strategic plan and your business plan to answer those questions.

Examine program expenses and revenues. Have some programs always been a black hole for unrestricted funds? Are they really worth it in terms of your mission? On the other hand, if you have services that generate more revenue than they cost, do your best to keep them! Do you own real estate? Can you sell it and use some of the proceeds to get you through hard times? Can you lease or sublease space to another organization?

Start cutting where you spend the most: staffing. We’re not talking about cutting small benefits like the $50 Christmas bonus or snacks for staff meetings. Those things mean a lot when we're all hunkered down. Instead, look at all your positions to decide whether they're currently essential at full-time (or whatever hours staff have been working). Re-prioritize. Re-assign. Everyone may have to work harder and smarter for a while.

More on staff cuts. The latest wisdom is to cut all positions by a percentage (across-the-board cuts) or to use “furloughs,” which are temporary layoffs. Understand your state's unemployment compensation system. In Washington, for example, employees might be eligible to receive unemployment benefits for a portion of the wages that were cut. Try not to deal out "death by a thousand cuts." Do one round of layoffs/cuts, and make it last for the year. Don’t keep your staff waiting for the other shoe to drop—on them.

No magical thinking. Look for possible ways to increase revenues, but don’t expect to find an angel who will save you. Grantmakers are unlikely to rescue you by covering your losses—they’re in the same situation you are. If you have a solid donor base, absolutely appeal to them for additional help. But make sure your organization is doing its part by cutting back.

Case study. Susan was a consultant for many years to an alternative school that is celebrated for its student outcomes. For more than 20 years, the school focused solely on high school students. Then, at the request of the school district, they added a middle school. This required a new building, more administrative staff, and an array of supportive services for the students.

Eight years later, the school was facing large cuts from government funders. Months before the cuts were to take place, the board and executive staff held an all-day meeting to decide how they could scale back. They identified the “sacred cows” that could not be eliminated without undermining the quality of their programs. They looked at the financial and service impacts of dozens of options.

The final decision? If necessary, they would close the middle school. Although the middle school was in keeping with their mission, it was one step removed from their original priority: high school students. It drained many of their unrestricted funds. It would be more financially efficient to close the middle school and to sell or lease the building.

Was this a hard decision? Yes. Was it the right thing to do? For this school, yes. Was it good and effective management? Absolutely. This decision kept the highest priority programs, it did not cripple the organization, and it had a sound rationale.

Budget cuts are rarely easy, and there is almost never one right answer. It’s important to examine the fiscal and program impacts of many options. Approach the process with a “we can do it” attitude and a commitment to making thoughtful decisions that will keep your organization doing what it does best.

Recommended for further reading:

Opportunities in Lean Times

Coping with Cutbacks: The Nonprofit Guide to Success When Times Are Tight

Susan Chandler has been a consultant trainer for The Grantsmanship Center since 1994. She has been involved in all aspects of the grantseeking process for a wide range of nonprofits, including institutions of higher education, museums and other cultural organizations, health care providers, and social services.

Sharon Lucas is a nonprofit management consultant. She has 25 years of experience managing nonprofit, government and for-profit organizations and is currently Interim Executive Director at a residential facility in Seattle that cares for people who have HIV/AIDS complicated by substance abuse, mental illness or dementia.

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