It sounds like a fairy tale: a nonprofit organization went through budget cutbacks, developed a plan to address them and came out stronger on the other side. Organizational development consultant Ann Hays Egan says it's not a fairy tale, but a dream come true.

During a financially tight time, the agency identified its strengths, weaknesses and opportunities for growth and change. As a result of its planning, the agency laid out its top goals.

Starting with an assessment involving board, staff, donors and volunteers, the staff identified the most important programs. Some were expanded based on need and the nonprofit's staffing levels, and others were maintained at existing levels.

The agency expected certain sources of income to remain constant; however one state contract was significantly cutting its reimbursement rate. This meant a potential loss of 20 percent of revenue on a program that the agency had taken over, which was not considered to be a priority. The managers and staff recommended cutting the program. They did so, and avoided a huge financial loss.

At the same time, leadership moved forward with a campaign to find better, more participatory board members, and in three years, had developed a stronger, more diversified board.

The management team worked on cross-agency program planning and budgeting, resulting in more integrated programs with fewer "silos," and budgeting that began at the program level, integrating program priorities.

The agency also analyzed its current and potential sources of income, any changes that might occur and developed strategies to respond to changes. Knowing it needed to develop new sources of revenue, the agency worked on building its donor base. It took years to build, but today the agency has additional nondesignated income.

Why did it work? Egan said, "The agency assessed its strengths and weaknesses, developed a plan with specific strategies, supported its strong programs and diversified its income. It averted loss because it was prepared, and ready to respond to changes. The agency built where it could, maintained in many areas and cut where it made sense."

Egan will address building sustainability for nonprofits in a technical-assistance workshop from 2 to 5 p.m. March 19, presented by the Santa Fe Community Foundation.

Egan said that building sustainability is more important now than ever for nonprofits. "For nonprofits that are watching grant income go down and donors who can't give as much as they did last year, building a sustainability plan now could mean the difference between continuing services or not," Egan said.

On the flip side, Egan notes that nonprofit management could have all the sustainability tools at their disposal and still have a situation where financial cuts aren't enough to keep the organization going. "But if you have the right skills and tools, you are better equipped to deal with the hardest financial situation we've seen in more most of our lifetimes," she said.

The workshop is designed for nonprofit board members and executive directors. Participants will learn how to analyze their programs and services, prioritize them and to know ahead of time what they might change if they have to cut something. Egan will also discuss how to reach out to donors and clients to get their help in living through these times.

"We'll also talk about how to conduct a financial analysis to determine what may happen to revenues and what they can do about it," Egan said.

Nonprofit staff and board members may register for this workshop at www.santafecf.org. Click on "workshops" then "registration." There is a $25 materials fee.

Valerie Ingram is the Development Director at the Santa Fe Community Foundation and can be reached at vingram@santafecf.org or 505-988-9715, ext. 4.