The Case of Coping During Difficult Financial Times

This is the third Sam Sector III case. If you check on a regular basis you can follow the escapades of Sam “the greatest and only nonprofit detective in the world” as he answers the questions facing today’s nonprofit leaders. Each installment will take only a couple of minutes to read, will provide you with some information, and will end in a bit of a cliff-hanger so that you will return in about 7-10 days to find out what happened. This of course is fun for me, and a different way to get information out to all of you who have an interest. Please let me know if you like it, hate it, or wish that Sam would find a real job that pays.


← Read the second installment

Sam spotted Jessica in the back of Guido’s restaurant at the small round table by the entrance to the kitchen. He had spent the last hour checking out her usual haunts without any luck. As usual she was the show-stopper in the room, looking very fetching in her blue designer dress. Jessica was a smart, well-connected nonprofit consultant who was particularly good at understanding process and had all the supporting tools. Sam smiled as he watched her tuck into a large Caprese salad with a fresh mozzarella ball the size of a clenched fist — he wondered how she stayed so slim. She looked up and smiled at Sam, her mouth full of ripe tomato, then re-crossed her legs and motioned him to join her. “Ghiya, Sham, waas shu doin’ shere?”

Sam waved at Rosa, Guido’s daughter and waitress, while he hooked a chair and a wine glass from a nearby table and positioned himself across from Jessica. She drained her glass of Valpolicella and with her other hand filled Sam’s glass to the brim from the carafe. With her mouth temporarily clear of food, she could be easily understood. “Sam, you look tired, are you on a rough case? Can I be of any help?”

Sam smiled his crooked smile. “My problems are nothing compared to what the average nonprofit exec is facing today. I’m pulling together some ideas to help out NPOs during these difficult times, and I want to talk with you about both process and tools that you think could be helpful at this time.”

“You bet, Sam. I was just talking to my mom and dad last night about the plight of nonprofit leaders during this perfect storm. They have been working with nonprofits for all of their lives and they have never seen anything like this. They gave me some good advice which I will be glad to pass on to you.”

Just then Rosa arrived and set down a large plate of mussels in a garlic and wine sauce for the two to share, along with a loaf of olive bread and an escarole salad for Sam. Sam sawed at the bread while Jessica shoveled mussels on to her plate and, while grabbing a piece of the olive loaf, began to explain her thoughts. “The biggest danger is that nonprofits, in getting through the next 12-18 months, will not have positioned themselves for the long-term future.” Sam blinked twice as he worked on the pile of escarole. “What I mean, Sam, is that some of the short-term decisions which make sense given the financial situation may not be smart for the longer term.”

“I get it.” Sam swirled the ruby wine in his glass. “Short-term decisions need to be made with the long-term goals in mind.”

Jessica nodded as she forked three mussels from their shells and popped them into her mouth, followed by olive bread soaked in the sauce. “The besht vay to do this is by ‘irst having the leadership frame the future vision, an’ then to pick some short-term alternatives that move you in the right direction. I am talking about scenario planning options.”

Sam smiled in agreement, reflecting on his discussions at the ballpark with his friends earlier in the week. “So, what about process and tools, Jessica?”

By now Jessica had a mouthful and her cheeks were puffed out and juicy from the mussel sauce. All she could do was pull some sheets from her brief bag and point to the appropriate pages while mumbling and chewing. “Grist luftin truk nan spinger….”

Sam read through the materials and started to frame his thinking on the way he might do scenario planning. With the Parker fountain pen his mother gave him, he started to jot an outline in his pocket notebook:

  1. Get clear on the core programming for your organization;
  2. Identify a realistic budget based on conservative revenue projections;
  3. Specify which programs you would provide and which you would scale back or cut under this budget;
  4. Now reduce the budget by 20-25% and rethink your programs under this lower budget;
  5. Finally, do a worst-case scenario budget, but make it really bad, at least 40% down from your conservative budget, and again rethink your programming.

By now, Jessica had read Sam’s list, swallowed hard, and emptied her glass of wine. “Sam, remember three things about programs:

  • A core program today may not be a core program for the future. For example, in the future, the needs of clients may change. A new and different core program will need to be designed to meet these changed needs. So you have to project your core programs into the future.
  • Some programs may not be core programs; however, they support core programs either by getting customers/clients into a core program or by enabling a program to be effective.
  • One strategy for achieving the same program outcomes for less money is to change the program model — or the way that you deliver services. For example, switching from providing individual counseling to group counseling when it can get the same results.”

After all that talking, Jessica decided that it was time to try some of the linguini with red clam sauce that Rosa had just brought to the table. Once again, Sam had to read the notes she had written because he could not understand Jessica with her mouth full of pasta. “Wooga blap ingumbo rasht, walla wens.” Sam put up his hand to tell her to stop talking and to protect himself from flying red clam specks. Sam looked at the process that she had outlined for analyzing core programs and copied some of the ideas into his notebook.

  1. Identify all the expenses and revenue projections for each program. The revenue projections, if sufficient to cover expenses, might be a reason to keep the program rather than cut or modify it.
  2. Some programs are very appealing or popular with funders or government and, therefore, you may not want to change or cut those programs because they may be covering some of the indirect costs of the organization.
  3. Some programs are expensive and, therefore, are candidates for either cutting or changing the model.

Sam looked over at Jessica as he put the cap on his pen. She had worked her way through the bread and pasta and was motioning to Rosa to bring over the dessert tray. Sam realized that it was time to get while the getting was good. “Thanks for the info, Jessica, I really appreciate your taking the time to help me out. Put everything on my tab, Rosa, and tell your dad that the clams were particularly sweet tonight.”

With that, Sam popped on his fedora and strode out of the restaurant. He wanted to connect with one more consultant friend before the day was done, and he knew where she was likely to be — but would she have the information that he needed?

Read the fourth installment →

If you have ideas that can help Sam as he works on his current case, or if you have "cases" that you would like to see Sam take on, please email me.