My daughters have recently fallen in love with American Girl dolls. Not surprising – it is a major phenomenon in the grade school set. But, if you do not have a daughter between 4 and 13 you might not know that each doll costs more than $100. An outfit from the store is easily more than $25. So, how does one so short in age and stature come upon that much money? Well, that has been the subject of much discussion in my house.

My husband and I are trying to use the doll as a way to teach about allowance, savings, and spending. Do they want to spend everything on this one item or buy extra candy at the store? If they don’t have enough to get everything they want, will some major donor (read: grandparent) come in and save the day?

Essentially, our discussions focus on determining if this is what you really want – how are you going to achieve it? And this is something we all need to consider as a core lesson in our current economic times.

What Is It That Your Nonprofit Wants To Achieve?
When money is flowing freely, a nonprofit can expand programming nearly at a whim. Someone wants to donate money to start a flower-arranging group for teens? Great, you think, maybe a bit of that money can cover operating expenses. Someone wants to create an endowment for a new film series? Wow, that sounds like that could increase our programming without increasing our costs. But in 2009, even if the offers continue to come in, should you continue to accept?

Each nonprofit should have mission and vision statements that clearly states their goals and objectives. Assuming that you have clear goals, then now is the time to ensure you will continue to provide programs and services that are core to your mission. And unfortunately, while it may make some people unhappy to hear this, in economically good times, programs and services tend to expand beyond the core.

The major donor who contributes to the annual fund at a significant level does not want to be told that her idea for a flower-arranging group won’t be implemented. But, showing her that your goal for 2009 is not to take on any additional programs but to focus on core offerings, or, potentially, even decrease programs to become financially sound could impress her. Once you see the recession end you can look into the true costs of chrysanthemums and gladioli.

Believe it or not, the hardest part may not be disappointing donors. It may be that you have to recommend to the Executive Director that his pet-project should be cut; staff hours need to be decreased or whole positions get eliminated. Many people choose to be in the nonprofit sector because organizations tend to be a bit “softer” and care more about people and the world around them. But being a nonprofit leader does not mean you should avoid difficult decisions until your agency is in such financial trouble that you have to close the doors.
As with your own personal budget, “lean” is the word of the year. And if what you really want is an expensive doll, just make sure you know you can still pay for other “necessities” along the way.