· Step 1: Assess our current financial position. What are its funding prospects? If it's dependent on government funding, its prospects could be bad.
· Are we consistently running surpluses? Use the Community Platform’s Financial Analyzer to get a quick profile.
· If consistent or recent deficits and no prospect of positive change on the horizon, for how many months or years will your operating reserves or other financial resources last to make up the difference?
· Does our financial situation reflect the programmatic or financial weaknesses of our organization or of the industry or field as a whole?
· You can also use the Financial Analyzer to assess how comparable organizations are fairing.
· If you don't have liquid reserves, do you have other assets such as real estate or even programs that you could sell?
Step 2: Can you find economies of scale? For many organizations, becoming more efficient is the best route to sustainability. Assess opportunities for reducing or more broadly distributing fixed costs:
· What portion of your costs are fixed and what portion variable?
· Are there economies of scale for your organization to distribute your fixed costs more broadly? Could, for example, a program, clinical or executive director manage more clients or programs? Could your headquarters be used by more people running more programs or organizations?
Step 3: Find potential partners. Assuming the answer to some of the questions above is yes, than what organizations are potential partners? The Community Platform provides some useful tools for assessing potential partners or even merger or acquisition candidates. Here are a few ways you could proceed:
· Search for organizations in your category, or complementary categories.
· List organizations in your area using the Financial Analyzer to show their revenues, expenses and net assets for the past several years. Are there organizations that look vulnerable?