Financial strategies and management approaches for nonprofits during economic downturns

There is little academic research and guidance to determine whether financial strategies and procedures used in for-profit business during economic downturns can be effectively used by nonprofit organizations as well. The purpose of this qualitative exploratory study was to investigate which strategies and procedures used successfully in for-profit businesses might be effectively applied in nonprofit organizations. The theoretical framework was based on behavior finance, including the work of Statman and Prince; structured management, including the work of Havill and Nonaka and Takeuchi; and creative financing, including the work of Fischer and Balim and Dogerlioglu. The research questions focused on for-profit differences in financial positions/roles, financial strategic operational planning, and financial strategies and management approaches that could be used by the nonprofit sector during economic downturns. The Greater Cleveland Partnership and other Cleveland for-profit and nonprofit businesses made up the population and random sample of 20 financial leaders. Data collection was based on individual interviews. Data were analyzed by the researcher and a colleague and with NVivo software. Results led to several suggestions for nonprofit leaders to consider: creating alternative revenue streams and reducing costs; exploring synergy between for-profit and nonprofit groups, including partnering and networking; enhancing the financial knowledge of nonprofit financial participants; and expanding the visibility of nonprofit organizations in social media. Identifying financial strategies and management approaches used by for-profit businesses can prepare leaders of nonprofit organizations to address financial shortfalls during economic downturns.