ELEMENT FIVE - REALLOCATE AND RESTRUCTURE RESOURCES

Resources

1. Working Paper Donor Diversification addresses the challenges that arise for nonprofits when funders decide to significantly reduce or terminate support.
2. Developing a Plan for Financial Sustainability focus on how to plan for the financial stability of your organization.
3. Omni’s Guide to Successful Restructuring looks at effective ways to restructure an organization with minimum disruption.

Promising practices

Arc of Westchester and Penn-Mar: Considering Real Estate and Human Resources in Resource Reallocation

One of the strategies that The Arc of Westchester (AOW) used to reallocate resources as they began their transformation was to “get money out of the real estate,” said one senior staff person. First, the organization reduced its square footage by 60% by moving from a large center into a smaller one, after some individuals had moved to integrated employment. Second, the organization saved $175,000 when they moved the administrative offices that were previously offsite into the space formerly used as work centers.

Another strategy that AOW used to reallocate resources was what the organization referred to as “reengineering human resources.” Throughout their transformation, AOW did not replace senior staff as they resigned. Instead, they used the savings from their salaries and benefits to invest directly in job development.

Similarly, Penn-Mar cut certain positions that were no longer critical, and redirected those salaries towards hiring skilled job developers. They described highly qualified job developers as “the secret sauce” in their transformation progress. Furthermore, Penn-Mar applied for grant funds, which they used to invest in training and capacity building around job development for additional front-line staff. For AOW, proper resource reallocation was central to the success of the transformation process because it helped the organization maintain a balanced budget and a healthy financial status. Money freed up from real estate and senior staff allowed them to invest in job developers and job coaches, enabling the organization to accomplish its strategic goals.