The executive order to freeze U.S. foreign aid has significantly impacted many organisations within the GSF community. These organisations remain committed to delivering critical education programmes and services to some of the world’s most marginalised and underserved children.
We spoke to Girish Menon, former CEO, STIR Education, on how organisations can navigate major financial disruptions. Drawing from his experience leading STIR Education through a sudden 30% funding cut with just three weeks' notice, Girish shared practical insights for non-profit leaders on how to respond effectively to unexpected financial challenges.
1. Talk to your partners and align on priorities
The first step in managing a funding cut is engaging in open conversations with partners (government and civil society). A well-managed shrinkage, with clear communication and collaborative decision making, will lead to long-term engagement and buy-in from partners.
- Communicate the funding cut and agree on core priorities: Identify essential activities that will achieve the intended programme outcomes.
- Make critical choices: Focus on key programme components that will deliver impact while postponing or reducing non-essential activities. Evaluate what aspects of the programme can be postponed by 3-6 months, economised (e.g. reducing training time from three days to one), or de-prioritised.
- Explore cost-sharing: Discuss cost-sharing options with your government partner, including direct funding to the programme, or contributions towards travel, training venues, stationery, and printing.
2. Reach out to all your funders
Activate your funder and donor networks to navigate this funding challenge. Donors understand that these are unprecedented times and engaging them thoughtfully can unlock new opportunities for support.
- Develop a communication plan: Craft a simple, clear communication plan that conveys your situation.
- Contact current and past donors: Schedule calls to ask for fresh contributions, ideas for new funding sources, or the possibility of removing restrictions on current funds.
- Make specific asks: Tailor each request based on the donor's history and capacity.
- Engage your board: Ensure that board members are actively involved and supportive of the executive team’s efforts towards fundraising.
3. Financial planning and strategic deployment of reserves
Careful financial planning is crucial when facing immediate funding gaps. Organisations must assess their current reserves and develop a thoughtful approach to managing resources.
- Evaluate reserve capacity: Assess available financial reserves to determine the portion that can be deployed to bridge immediate gaps. This helps to sustain core operations and minimise disruptions.
- Protect minimum reserves: Avoid dipping below critical reserve levels to maintain organisational stability. If it becomes necessary to go below the minimum reserve threshold, establish a clear plan to rebuild reserves over the next few months.
- Prioritise sustainability: Ensure that financial decisions made today do not jeopardise long-term stability. Look for creative cost-saving measures and assess all potential funding sources.
4. Implement transparent, consistent communication within the organisation
Clear communication across your organisation is critical when navigating financial difficulties. Transparency can alleviate apprehension and build trust among staff and partners.
- Be open with information: Share key information in a simple, easy to access format and lay out potential implications of the funding cut.
- Be available for questions: Foster a two-way dialogue that addresses concerns and offers clarity. Do not set out expectations that you are unable to fulfil.
- Provide consistent updates: Consistency and transparency is vital; schedule regular update sessions for the team, even if there is no new information to share.
5. Make thoughtful and decisive reductions to the team when necessary
When staff redundancies are unavoidable, handle the process with care and clarity. Making cuts once is preferable to a series of smaller, ongoing reductions.
- Plan ahead: Even if the likelihood of staff layoffs is low, ensure that your HR teams are evaluating redundancy policies, checking contracts and legal requirements in your countries of operations.
- Be transparent about the rationale for staff cuts: Explain the decision-making process to those affected.
- Support departing staff: Provide references, offer support with writing resumes, coaching for interviews, and open your networks to help them find other roles.
6. Prioritise mental health and well-being
Challenging times can take a toll on leadership and team’s mental health. It is essential to create a supportive environment in these times.
- Activate mental health policies: Provide access to mental health resources, where possible.
- Create safe spaces: Encourage open conversations and allow staff to express concerns and seek reassurance.
7. Maintain a long-term perspective
While immediate challenges my dominate decision making, it’s crucial to keep an eye on long-term goals.
- Identify mission-critical elements: In all your decision making, focus on preserving core aspects of your organisation’s mission.
- Stability takes time: Anticipate a 3-6 month period of crisis management and up to a year (or one planning cycle) before work stabilises.
8. Leaders need community support
Organisation leaders face unique pressures during financial crises and need space to seek solutions and release stress. Lean in to support networks, share ideas and strategies with peers, and ask for support.
9. Stand firm in commitment and advocacy
Resilience and solidarity are essential in demanding times. Speak out in a manner that is productive and constructive and build a groundswell of support for the critical work you are doing.
Global Schools Forum (GSF) is a collaborative community, innovation accelerator, and partnership builder for non-state organisations working to improve education at scale for underserved children in low- and middle-income countries. To learn more about GSF and our work visit our website or write to us.
