With fewer donations and declining investments, nonprofits are thinking creatively about cutting costs and raising revenue

The Wall Street Journal featured an article by Shelly Banjo about how different nonprofits are responding to the economic crisis.

When your mission is serving the needy, tough times can be doubly difficult: More people need help, but you have fewer resources.

Nonprofit organizations -- facing cuts in government aid, investment losses and a decline in donations -- have been experimenting with new ways to stay afloat. Besides cutting costs and eliminating waste, they're thinking more creatively about how to use volunteers, garner new donations, strengthen ties with existing donors and create projects that generate additional income.

"Necessity is the mother of invention," says Melissa Berman, president of New York-based Rockefeller Philanthropy Advisors. "As financial resources dry up, people have the impetus they need to be creative about where to get help and how to keep their mission going."
Here's a look at the strategies some charitable organizations are using:

Special Olympics
Looking Beyond Cash
The organizing committee for this year's Special Olympics World Winter Games in Idaho faced a $33.5 million budget shortfall about 18 months before the February event. It had to "get creative...and ramp up quickly," says Bruce Schrepple, chief financial officer of the U.S. Games Organizing Committee. The key was finding resources other than cash to make ends meet.
The committee began by tackling staff-related costs. It reduced plans for paid staff members to 60 from 120 and made up for that by intensifying its volunteer-recruitment efforts. It tapped volunteers from local nonprofits, the National Guard, the Defense Department and AmeriCorps, a nationwide community-service network.

Nonprofits may be able to rely more on volunteers now because many people who have been laid off, some with lucrative severance packages, "are seeking new opportunities to give back," says Garvester Kelley, a vice president at the Nonprofit Finance Fund, a nonprofit financial-advisory service.

Nonprofits can also reach out to businesses for help in the form of goods and services, rather than cash, Mr. Kelley says. For instance, to train the volunteers for the Special Olympics, the organizing committee was able to replace a costly two-week, on-site program with an online training program designed free of charge by Brainshark Inc. of Waltham, Mass. The committee also found companies and governmental agencies that were willing to provide the Games' information-technology staff, computers, and food and beverages.

Nonprofits looking to employ this strategy "need to be as specific as possible about what they need" from both the companies and the volunteers to "make sure you are getting something you can actually use," says Lucy Bernholz, founder and president of philanthropy consulting firm Blueprint Research & Design Inc. of San Francisco.

Also, processing donations of goods and services and organizing volunteers for the Games took time and training, something nonprofits need to be aware of and prepared to handle, says the organizing committee's Mr. Schrepple. Read more here about other nonprofits and how they are coping.