The current issue of the Chronicle of Philanthropy offers an article “Daunting Challenges Face the Nonprofit World.” The crux of the article is that its survey of the top 400 fund raising organizations found an expected reduction in income of 9% by the end of the year. That 9% decline is the median, meaning that half of the organizations in the survey (200) expect a decline of greater than 9%.

As you look ahead to the coming year I’m sure the questions on the top of your mind are: How do I make sure my organization is in the top half of such a list? What do we need to do to see less than a 9% decline?

Funders see 2010 will be a difficult year. When we talk about our jobs as funders we always manage to add, sometimes a bit tongue in cheek, that giving money away is a lot harder than it sounds. But 2010 will be one of those years that being a funder will be more difficult than most years.

But as I write that, I know that being on the funder side of the table during such a difficult time is still much easier than being a development director or grant writer.

So how do you ensure that your organization is at the top of that list?

There are no easy answers; no one thing you can do that will ensure your organization’s success. But a few pointers bear repeating.

First, more than ever it is important that you act. In tough times organizations sometimes put off fund drives or other important work because the timing isn’t right. Clearly you should be prudent. Now is not the time to make big bets, to invest large sums in new ventures that might now pay off because of the state of the economy. But sometimes that thinking causes organizations to pull back on all plans and solicitations.

You’ve got to keep communicating with your donors, provide them with opportunities to help. If you don’t ask, they won’t give.

Maybe this year’s fund raising luncheon needs to be bit less fancy; but don’t cancel it altogether. The same goes for your ongoing solicitations. Be creative on a budget.

Second, set priorities and use them to communicate what’s important about your organization’s mission and values. In tough times some organizations will put off setting priorities, claiming that they don’t know how much they will raise in the coming year. But goal-setting involves more than having a makeable goal.

Several United Ways around the nation decided to refrain from setting dollar goals this year due to the unstable economy. But nearly all of them still set a goal—usually a goal to increase the number of givers to the annual campaign.

While these United Ways acknowledge the uncertainty caused by the economy, adopting a goal to increase the number of donors tells the community that now is the time for everyone to pitch in and give what they can.

Finally, in some ways we are already part way through 2010. Most institutional funders, such as foundations or corporate grant programs, like to make awards prior to or in the beginning of projects or annual budgets. Those donors have already made most of the decisions they will make about activities that will take place in 2010.

There is still a lot of individual giving and fee income for 2010 budgets yet to come in. But even with those results pending you can probably get a good sense of where your budget is heading. And if you need to make cuts, it’s easier to make those cuts earlier rather than later.

Here’s an example of why cutting soon pays off. Let’s say you have a $100,000 budget (to use a round number that makes the math easy). Let’s say you determine that you’re going to miss your budget by 5%, which equals $5,000. If you make that cut around the end of the first quarter you will end up taking a $75,000 budget and making it $70,000. That’s just under a 7% cut.

But what if you don’t act then, either because you haven’t figured out what your actual income might be or you just put off making the cuts because, after all, it’s no fun to make cuts? If you cut halfway through the year the cut is about 10% of budget, and if you wait until the final quarter of the year you have to cut 20% of the budget. 

Funders want to help organizations that can survive in these tough times. Often that means asking the question: Does this organization have a workable strategy or is it just keeping its fingers crossed?

Clearly, most funders want to be partners in workable strategies.