Guide for Difficult Conversations: Cost-Cutting at a Nonprofit
In 2024, Chantilly Mediation and Facilitation began holding Executive Roundtable discussions exclusively for nonprofit leaders. It was through this program that Gina met Roopal Mehta Sarah, Executive Director of the English Empowerment Center. After experiencing a shortened form of our signature training Curiosity, Conflict, Communication, Roopal requested more information about handling specific scenarios. This post is the first of three looking at specific situations commonly faced in mission-driven organizations.
Let’s face it, in 2025 most organizations continue to be deeply concerned about their capacity - how to serve more people with what is likely an ever-shrinking budget?
I’m not talking about gigantic corporations who have had record profits yet still feel a need to “find efficiencies.” I’m not even talking about the federal government and the many deep cuts being implemented that will affect Americans. I’m thinking about mission-driven organizations with employees numbering from 30-200, with flat revenue and increasing costs.
When you lead an organization because you love the mission and the nonprofit industry, but your staff is worried about what cost-cutting means for them - how do you handle those conversations?
General Advice for Leaders in Lean Times
These conversations need to happen continuously. There should be formal announcements if your organization is cutting specific services, products, or positions. And, informal discussions and information also need to be planned - example:
Reassurance in internal emails;
Talking points that feel natural to be used in conversations;
Brief and informal check-ins with staff of various levels and departments;
Formal check-ins or supervisory discussions;
Formal team meetings.
Be honest, always; and transparent, as much as possible.
Tie the situation back to your mission and values:
How does the mission continue to be achieved even in the face of cutting costs?
How do the chosen cost-cutting measures adhere to your organization’s value system? If your organization doesn’t have a formal list of values - then how do the chosen measures adhere to your personal leadership philosophy?
Consider explicitly guiding employees to take care of themselves as best they can - whether that’s scheduling time off, doing less of the informal/volunteer roles that so many staff take on, or offering formal supports from the organization like trainings or benefits.
When you’re in hard conversations - especially group conversations - prepare yourself to hear some silence. There are a lot of reasons for silence, and most often it simply means that people are thinking. Here’s a facilitator tip:
Make sure everyone has something to write with and write on.
Explicitly invite them to jot down their thoughts before speaking - try saying, “Let’s try a tool I recently learned called brainwriting. All it means is that when I ask a question, we purposefully pause for a moment and write down our thoughts. Then we move to conversation.”
What might a team meeting conversation look like?
Situation: You, as the Executive Director, visit a team meeting of the Programs Division. You directly oversee the Programs Director. While no programs are being discontinued, the program staff are grappling with how to provide last year’s programs at this year’s prices - with flat funding.
I can’t give you a draft dialogue because your organization is YOURS and your people are THEMSELVES - instead, I offer some conversation starters, questions to consider, and talking points that may apply. Still worried? Contact us.
Consider:
Generic conversation starters are great to get started if you truly are open to listening to everything that may come up. Yet, even generic questions can be guided with the right set-up.
Try saying: “Given the recent announcement of how we need to cut costs, what’s top of mind for you right now?”
Or: “I’m eager to hear ideas about how to reach as many people as we reached last year even though our program costs are increasing. How might we make this work?”
Transparency and authenticity are always best - and sometimes caveats help the hard truths to be heard.
Try saying: “No one wants to hear this, yet we must be realistic: There are no guarantees that funding is going to increase in the foreseeable future.”
Or: “I know how difficult it is to face this reality, but we want to try to reach just as many people as we did last year.”
Or - sometimes a “caveat” can be replaced by reminding people you likely do know what they’re going through: “I know how hard it is to be in this position. I was a program staffer at this very organization during the 2008 economic recession, when we saw needs increase exponentially but funding was cut.” Or whatever similar situation you can honestly share.
Just be a part of the conversation - you do not need to have all the answers, and yet your presence in the room will likely be seen as a sign that you care.
Try saying, “While our fundraising team is hard at work, it would be irresponsible of me to let you believe that there’s a guarantee to have all the rising costs covered. I’m here to be part of the conversation about how we might be able to continue all the programmatic work at the same level as last year. Let’s talk together about what that can look like.”
Focus on what you can do, appropriately, as the Executive Director.
Try saying, “I know I’ve given you a really hard goal - meeting the same level of need with fewer resources. Let’s talk about what we can prioritize to make that happen. Maybe there are things we can cut appropriately, or maybe there are things we can manage differently. Tell me what your own top priorities are right now, really?”
As the conversation moves forward, acknowledge your own moments of frustration (it’s part of being honest) - but remember - you’re the leader. You model the emotional tone of the organization. Is your organization one where challenges are faced with poise and hard work, or is your organization one where people fly off the handle, yelling or becoming defensive when challenged? You set the tone.