Top Tips 14

Ten Top Tips for Managing in the Recession

The current economic environment in which NGOs operate has become unpredictable. The recession has impacted on NGOs’ income and reserves. No one can predict the depth or length of any reduction in income, but it will not blow over quickly.

There will be opportunities as well as threats arising from the recession so planning should start immediately. Here are ten practical ideas to help you manage in these tougher times:

1. Review your NGO’s situation

Consider how the recession is affecting, or could affect your NGO. Understand the true picture, not what you’d like to believe. Carry out analysis to understand what your NGO does best and why. This will help you focus on your organisation’s strengths.

2. Act decisively

With increased uncertainty and volatility, it is important to take tough decisions early. Focus on key strengths and risks across your NGO. Do not underestimate the time taken to agree potentially unpopular decisions. Don’t sit back and wait; be ready to take advantage of the recovery when it arrives.

3. Remember – ‘Cash is King’

Ensure your finances and cashflow are in good order. Cash management is vital. Monitor cash receipts and payments closely to ensure you have funds available when needed. Look closely at your financing and funding arrangements and any foreign exchange risks.

4. Focus on what really matters

Evaluate which activities, projects and programmes really add value and meet beneficiaries’ priorities. Revisit your existing programmes – what initiatives could you stop or defer?

5. Manage your cost base

Focus on areas where performance could be improved. Go for targeted rather than across-the-board cuts so essential activities aren’t cut. Focus on using resources more efficiently and effectively. Look at whether your way of operating needs to change.

6. Reliable management information is key

Now, more than ever, you need the right management information. Monitor your performance against clearly defined financial and non-financial key performance indicators (KPIs). Key decisions need to be based upon up-to-date and accurate facts.

7. Plan for different scenarios.

Be prepared to react quickly and flexibly and plan ‘what if’ scenarios. Create a range of financial, operational and staffing scenarios that reflect the possible impact of the recession on your NGO, and then plan strategies to manage the impact.

8. Recognise the value of your people

Regular and clear communication with employees, board members and volunteers is essential. Retaining and motivating key staff is critical to your future - develop appropriate incentives for them.

9. Understand your stakeholders’ positions

Evaluate the likely impact of the recession on your beneficiaries, funders and other stakeholders. Make sure you understand their issues and priorities and maintain regular and open dialogue.

10. Take advantage of the opportunities

Don’t stop innovating or investing in those areas of growth you will need for the future. Don’t forget who you are or what you do. Have an eye for the future.

Acknowledgement: These tips are based on 10 Fundamental Priorities for Managing in a Downturn by Ian Oakley Smith, Director, PricewaterhouseCoopers Charities Team.

Want to learn more?

Mango have developed a number of Financial Management training courses to help NGOs make the most of their money. Join us on a Mango training event and have the fear taken out of finance!  FM1 Getting the Basics Right and FM2 Financial Sustainability are especially relevant to this topic.

View our calendar of courses around the world here: www.mango.org.uk/Training/Calendar

See Mango’s Guide to Financial Management for NGOs for free advice and tools, including a section on financial sustainability. See: www.mango.org.uk/guide

Mango: international specialists in financial management for NGOs
Mango inspires NGOs to make more of their money by: running training courses, recruiting finance staff, advising NGOs and publishing free tools & guides: www.mango.org.uk