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Top Cost-Cutting Measures Your Organization Should Consider

As we continue to navigate through this public health crisis, you and your organization may be thinking of ways to reduce costs and stretch your budget. Some of these decisions are easier than others, but each can have a positive impact on your financial health if planned for properly. This email will review different cost cutting measures and how to effectively navigate more serious organizational changes. It is important to remember that while we are not sure when this will end, the decisions you make today can ensure your organization’s future is a healthy and vibrant one.

A Message from William Moore, CEO Support KC

Here is a quick message from SKC President and CEO William Moore on some of the questions we have asked as an organization, and the actions that followed:

“With the continuing uncertainty of the magnitude and duration of protective stay-at-home orders from Governors and Mayors, SKC’s adaptations also came in the form of a careful review of our discretionary income. How can we be as conservative as possible in where and how we spend our money? Where in our budget can we eliminate inefficiencies and non-essential costs? And, can we encourage our funders to loosen restrictions on grants in the event we need capital to maintain our operations? SKC has and continues to place a high priority on our staff. How can we keep staff employed with their benefits intact? We chose to delay new hires in our vacant positions, we made hard decisions about discretionary matches into our 401ks, and we took advantage of new opportunities that lowered our lease payments later this year.”

Are you unsure of where to start thinning out your expenses? Take a look at some areas that can help now, keeping in mind how they could become a part of your organizational structure in a post-pandemic world.

Downsize Your Office & Supplies

Supplies Inventory

Create a detailed inventory of all of your office supplies. Go through them one by one and evaluate which of them are really necessary to your organization’s activities. Sell or donate any extraneous items and make sure these supplies aren’t scheduled to be automatically reordered.

Office Space Reduction

Can you reduce the amount of office space you need? If you are already allowing employees to work remotely due to COVID-19 or otherwise, develop a plan for how much office space you really need once businesses can reopen.

Can you eliminate a physical office altogether? Some nonprofits choose to sign up for an office-sharing or executive suite space where they schedule meeting rooms or offices only when they are needed.

Digital Document Storage

Switch to digital document storage such as Google or Dropbox in order to cut the square footage your office space needed to store paper files. Going paperless also reduces the cost of ink and printing.

Use email instead of regular mail whenever possible to save on postage.

Use video conferencing instead of live meetings (even after social distancing restrictions have eased). There are a lot of free tools available out there – e.g. Skype and Google Hangouts. Make sure that all attendees have a copy of the agenda and that desired outcomes are established ahead of time so that staff time isn’t wasted.

Cut Unnecessary Dues And Subscriptions

Cut or Reduce Monthly Subscriptions

Monthly subscriptions can be great, but when every dollar counts, now is the time to cut back anything that isn’t absolutely essential. See if the company will offer you a refund for any unused portions.

 

Likewise for dues or memberships to professional associations or national organizations that are nice to have, but aren’t necessary in order for your organization to function. Look around to see if there are less expensive options or plans.

Office Equipment

Do you lease any office equipment that you can make do without, such as postage machines, photocopiers or specialized telephone equipment? If you cannot opt out of lease contracts, see if the owner will renegotiate the terms. Offer to sublease (if allowed) or share such equipment with other nonprofits to help defray costs. See what less expensive options are available.

Suspend Other Services

Services like water delivery and document shredding are nice to have, but may not be utilized during office closures. Look into suspending these services, or canceling them all together.

 

If you pay utilities directly for your organization, suspending or reducing some of these while you are closed could be an option, such as internet, add-on telephone service options, cable, etc. Work with other utility companies to establish a level payment plan for gas and electrical bills if that would help your budget.

 

If your office is closed, make sure all lights and unused equipment are turned off and that temperature controls are set to conserve energy.

Evaluate Your Insurance

If your organization is temporarily closed or has drastically reduced staff or hours, you may be eligible for various discounts on your insurance such as premises liability, general liability and workers’ compensation. If you have reduced your workforce or cut salaries, your workers’ compensation insurance premiums should decrease accordingly.

 

Review your equipment insurance policy. Do you still own all the items listed?

 

Ask your insurer about premium reduction strategies such as raising your deductibles. Insurance agents would rather keep a customer at a lower rate than lose your business entirely.

Maximize Staff Options

Use contract workers for specific short-term projects or programs.

 

Offer internships to college students. Many students are not attending live classes right now and have more available time and flexible schedules.

 

Utilize your volunteers – a built in labor base! Recruit new volunteers. People want to help out during this crisis and providing concrete opportunities for people to contribute is useful to your community. You can even recruit managerial-level volunteers by reaching out to retired or laid-off professionals.

 

Ask your Board of Directors for ideas. They may be able to offer a different perspective on how to cut costs.

Navigating Staffing Changes

Changes to staff and organizational structures are unfortunate realities that some of us may face in this crisis. While reducing payroll costs can lead to significant savings, you need to ask yourself if it is truly necessary. Your staff is your most important resource, so any changes to your workforce should be thought through with careful intention. Remember, while we are currently facing an unprecedented crisis, this is only temporary. This section will highlight some options organizations can take to reduce payroll costs, and how to navigate them.

Weigh Your Options

It can often be more expensive to hire and train new staff than it is to keep current staff. If your organization can weather the next few months, look into other cost saving measures and hang onto your most important assets.

Talk To Your Staff

This is not a fun topic of discussion, but bringing your staff to the table on these sorts of decisions can be a great show of solidarity and unity. As much as you can, help them understand that all cost cutting measures need to be considered.

 

Furlough, Layoff, And Reduction In Force (RIF), Know The Difference

Each of these can have a different impact on your organizational structure. This article from SHRM does a great job of breaking each term down. They also have a helpful how to guide on conducting a layoff or reduction in force.

 

Reduce Hours Or Pay

Reducing office hours or your work week can save on payroll costs without having to let anyone go. Agreeing to a company wide reduction in pay can show your staff that you want to keep them, and are willing to make sacrifices to do so. Your staff may be more receptive to this idea as opposed to more drastic options.

 

Show Compassion

If a layoff or reduction in force is absolutely necessary, you must treat your staff with respect and dignity. The Harvard Business Review has two great articles on taking a “soft hands” approach to the difficult decision of reducing your staff.

 

Conducting Staff Changes In The Age of Social Distancing

How can you be respectful and professional with a layoff if you cannot meet with the affected staff in person? Careerminds has a great resource for organizations needing to conduct a remote RIF or layoff.

If you need help with any of these resources please do not hesitate to reach out to us.

Finally, as each day brings new challenges and obstacles, remember to be good to one another. Support KC has spent the last twenty years working shoulder to shoulder with our partners in the nonprofit community to ensure we all stay ‘mission focused’. Let us not forget that message as our community needs us now more than ever. Support KC is here for you and your organization as you face new challenges and obstacles in the face of this pandemic. We can achieve anything if we work together. Support KC remains open (remotely) and accessible via our office phone number or by reaching out directly to your point of contact.


For the benefit of the nonprofit sector everywhere, we wanted to provide resources for ways we can continue to operate and grow within this era. And once social distancing begins to fade, what lessons can we take from this to improve our operations permanently. Come back often for more updates.