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Divide and conquer: How joint cost allocating works
In recent years watchdog groups, the media and others have increased their scrutiny of how much not-for-profits spend on programs vs. administration...
Has your not-for-profit’s program lineup remained unchanged for at least a couple of years? If so, consider using the tradition of spring cleaning to review your offerings. Some of your programs might be due for replacement.
Clear out the closets
Many nonprofits keep programs long after they’ve stopped working. Instead of relying on old assumptions about their effectiveness, perform new research. Start by surveying participants, members, donors, employees, volunteers and community leaders about which of your nonprofit’s programs are the most — and least — effective and why.
You may get mixed responses regarding the same program, so consider their source. Employees and volunteers who work directly with program participants are more likely to know if your current efforts are off target than is a donor who attends a fundraising event once a year.
Right tool for the job
If you don’t already have goals for each program, you need to set them. Also put in place an evaluation system with metrics that are strategic, realistic and timely. For example, a charity that provides tutoring to high school students in low-income neighborhoods might measure the program’s success by considering exam and class grades and graduation rates as well as the students’ and teachers’ feedback.
Apply several measures, including subjective ones, before deciding to cut or fund a program. Numerical data might suggest that a program isn’t worth the money spent on it, but those who benefit from the program may be so vocal about its success that eliminating it could harm your reputation.
Shiny and newer
It’s usually easier to identify obsolete programs than to decide on new ones. If one of your programs is clearly ineffective and another is wildly exceeding expectations, the decision to redeploy funds is simple.
Keep in mind that new programs can be variations of old ones, but they must better serve your basic mission, values and goals. Also, no matter how much good programs do, they can’t be successful if they overspend. For every new program, make a tight budget and stick to it. You might want to start small and, if your soft launch gets positive results, simply revise your budget.
It takes a team
Even if it’s clear to you and your staff which programs must go, some stakeholders may object to your proposals. Handle these individuals — particularly donors — with care. Let us know how we can help. Contact us at 1-866-287-9604.
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