The economic recession coupled with the social and financial stress caused by the events and aftermath of September 11, and now the collapse of one of the largest corporations in America, have left many businesses including cultural and historical non-profits reeling. How can we respond to this crisis? Take three imperative actions. First, be more flexible than you have ever been before—it will lead to the innovative thinking you need. Second, recognize that it is more important than ever to have the right person in the right place. Whether you are downsizing, struggling to maintain the status quo, or able to capitalize on the flood of highly-qualified for-profit candidates applying for positions in non-profits now, pay attention to recruiting, hiring and retaining. Last, always have a Recession Plan. You probably have a carefully thought-out disaster plan to protect objects in the collection; likewise, you must have one for the organization itself.

For many years now leaders have struggled to "think outside of the box." What more can we do to innovate? How much more flexible can we be?

John Foster, a Senior Archaeologist at the Department of Parks and Recreation in California says they are changing fundraising efforts on two levels. On the operational level, they are working to combine their events and programs with ongoing regional events. This allows several entities to make the most of their marketing budgets by combining forces.

The State is also working externally, and may ultimately change the structure of State-funded cultural and historic organizations. They are intensifying lobbying and legislative committee coordination efforts. The result is an "increased awareness of things cultural and historical. " For example, Proposition 40 which passed on the March Ballot made $267 million available for appropriation by the legislature for a multitude of projects including grants for the acquisition, restoration, preservation, and interpretation of buildings, structures, sites, places and artifacts that preserve and demonstrate California's historical and cultural resources. Another result is intense political interest in forming a Cultural Conservancy, using the Nature Conservancy and similar organizations as a model. This summer the State will host a conference of luminaries to further explore this potential.

While the passage of Proposition 40 indicates wide-spread support for arts and culture, Governor Gray Davis’ recently submitted 2002-2003 budget proposal must accommodate a gargantuan deficit of over $14 million. Many state programs will suffer cuts; the California Arts Council anticipates a drop of over $2 million in state funding. Summarizing the climate in California it seems fair to say that short term prospects for arts and cultural organizations look less fortuitous than the long-term outlook.

The Maine State Museum is working with the momentum built during the recession in the early 1990s. In 1991-92 the Museum was devastated; they lost 40 percent in staff and 50 percent in state budget. Four State institutions—the Museum, Library, Historical Preservation Society and Arts Council—found strength in numbers, pooled their resources and lobbied as a group. Since then, the State Archives, Maine Historical Society and the Maine Humanities Council have joined the coalition. Severe need fostered innovative adaptation. Three of the seven agencies closed their business offices; the State Library handles their administration and budgetary functions. JR Phillips, Museum Director says it is "not quite as good as having your own, but it does work." Much cost-controlling advice focuses on overhead—here is a way to really reduce it.

The group of seven agencies in Maine use Library Associations as a model since they are traditionally very strong. The strength translates well to the cultural-historical sphere: they obtained a very significant $3.2 million in funding for the New Century Commission from the State Legislature for the program's first 2-year budget cycle. Funding has recently been renewed for a second cycle at $1 million: certainly a reduction. However, it is now written into the State budget as an ongoing program so it is much less susceptible to being cut by rotating administrations.

Phillips says the reason for the Commission’s appeal and strength is that all the funds pass through as grants to community organizations. It keeps none of the money for administration, which certainly appeals to legislators. Furthermore, the group’s tactic of making each Senator feel their district is gaining from the program can’t hurt. They began by tracking where grant applications were coming from, then sought organizations in areas that were not applying. Next, they went out and taught people in those institutions that weren’t getting access to the program how to write a brief grant application they could then apply and be potentially be funded. In essence, doing this outreach ensured the program’s survival: now those organizations are stakeholders in the New Century Commission, and JR says they care about renewing their grants, so they lobby with votes. He feels certain the recent cuts (due to tax revenue shortfall) of 9.3 percent of this year’s and 5.92 percent of next year’s State allocation would have been much worse without the wide-spread community support they’ve garnered. The end result of the State Organizations taking a new, fluid approach is that the government has also become more flexible where those institutions are concerned.

In Maine, the process of restructuring those particular organizations was originally required by need. Whether or not your institution is experiencing drastic pressure to change, take a look at how you might respond. Is there a way to eliminate some overhead? If you are eliminating positions, will you rehire the same positions automatically when there’s money? Many organizations rely on historical precedent. Take a moment and consider this: does the organization need those positions? After all, you may have been managing without them for some time. Look into the future. What positions will drive the organization forward? They may not be the same positions that used to exist. It is an excellent time to examine positions and future need no matter where you are in the downsizing-recruiting-hiring phase.

While you’re thinking about job descriptions and what you need in a candidate keep in mind that in addition to those with nonprofit experience, there are many highly-qualified job seekers interested in leaving the for-profit sector. Barbara Franco, Director of the History Society of Washington, D.C. (HSWDC), has not let being a small organization stand in the way of attracting staff accustomed to higher salaries and more benefits. How? Flexibility. What do many people want more than money? Time.

The HSWDC has found ways to offer time to their employees. Students can work 30 hours a week while they attend classes. Franco says "some people like to come in at 7 AM., others would rather work until 7 PM.," so they adopted a flex-time program. The maintenance person sometimes works in the middle of the night; one advantage—no paint or cleaning fumes in the daytime work environment.

Ms. Franco has also taken a broader view of qualifying job experience. She is focusing on character and attitudes rather than a traditional "skill set" approach. For example, the HSWDC has an employee with a fairly recent Master’s Degree in the field and not much on paper, but a lot of life experience to strengthen her position. This approach does require a calculated risk, but has worked well for Barbara and the HSWDC. The HSWDC has been able to capitalize upon the flow of people who want to find more substantive work in the post September 11 era because of the organization’s ability to be flexible.

How can you increase the likelihood of finding a good fit when you’re looking for character or attitude in field of candidates? While nothing can guarantee the perfect match, there are assessments more widely used in the for-profit sector to measure how quickly people think, their personal strengths, management styles, and how they will react under adversity. While there is cost incurred using assessment tools to narrow the field, it is not significant compared to the cost of hiring the wrong person. If you bring on the wrong person what are the costs? Even if the employee leaves after a few months, the organization has lost time and thousands of dollars recruiting, hiring, and training. Add in the cost of having a mismatched employee performing at a less than optimum rate. Then there’s the cost of repeating the hiring process with a new employee. It adds up. The bottom line is: if you can hire someone with the right character and attitude for your organization, skills can be developed.

When the right people come together in the right places, your organization will be better prepared to react and make threats into opportunities. Having a serious recession plan will help. Is it too late? Never! Is it a bummer? Probably. Is it difficult? Yes. Is it better than flying blind in a panic when things take a downward turn? Yes. There is scientific proof to back up what many of us know in our hearts—we don’t think as well under stress. Having a recession plan allows the organization a little breathing room while you prepare for the worst, and hope for the best. Here’s how to get started: 1) Estimate where your Institution is on the recessionary curve? Are you in it? Even if you aren’t, put your leadership group together and do a practice run. 2) How would you respond if you had a 40 percent loss in revenue? Assume everything is negotiable. What if it is more than 40 percent?

If you have a Plan, you can react faster to stave off damage and look for opportunities to grow stronger as the organization emerges from Recession. Organizations depending heavily on admissions will feel the pain first. The Cincinnati Museum Center relies on admission for 70 to 80 percent of its budget and cash flow shifted significantly last summer according to Vice President John E. Fleming. The organization made a $300,000 cut before September 11. They continued to monitor closely and made additional cuts of more than $500,000 in November including eliminating 12 staff positions.

The paradox is that in times of financial stress, the first things cut are programs or services, and marketing. Yet, what does an organization need most to survive? Programs, services and marketing. There are other options.

First, control overhead. Consider drastic re-structuring. In addition to the earlier example of the Maine State Museum there is a precedent set by The Glenbow Museum. Robert Janes has written about the process and experience in painstaking detail in Museums and the Paradox of Change: A Case Study in Urgent Adaptation.

Second, revisit your recruiting, hiring and retention strategies. Keep in mind that hiring mistakes, even resolved within half a year, end up costing two and one-half times the person’s annual salary. Is the Human Resources Process providing quality staff the organization needs? How can you get well-suited, happy employees? Many interviewers make decisions based on how the applicant looks and gut feeling. You should certainly trust your instincts, but would you make an important, expensive collections decision based on a first impression? Most institutions can’t afford to, with either objects or staff. Give yourself more information so you will make a better hiring decision. Think about using some screening assessments so you don’t waste your time, or the candidate’s. Make the most of the interviewing process. In Hiring Smart, Dr. Pierre Mornell outlines 45 ways to make better hires. If you do nothing else to improve human resources, skim this book. Using humor to ease the painful stories of past mistakes, Mornell discusses Pre-, In-, and Post-Interview Strategies as well as providing sections on Reference Checking and some guiding principles. To retain worthy staffers, consider benefits that don’t demand cash outlay such as flex-time or shorter weeks for students or others who want fewer hours.

Experts are predicting an economic recovery soon, but in these uncertain times it is wise to hope for the best and plan for the worst. In the best of times, resources put into innovation and getting the right people in position will reap exponential benefits. In the worst of times, your organization needs a culture that can flex and bend, and a plan to survive financial hard times so you can emerge from the storm stronger than ever.

/FONT>