FIN 380 - nonprofit charity
As depicted by the scenario, the non-profit organization is experiencing difficult times. The economic downturn and fall in stock values have worsened the situation. In such challenging times, drastic measures have to be adopted to cut expenses. After examining the overhead costs of $4.5m, it appears that the personnel costs are substantially high, amounting to $1.5m. These can be reduced in two possible ways; either laying-off staff or by reducing their salaries. Moreover, the staff members as well as volunteers should be provided with incentives in order to suggest ideas for reducing the overhead costs.
Merger with another organization with similar operations can greatly help to reduce costs. Mergers are normally considered as a drastic measure to cut expanses and end the duplicative services. This form of resource sharing will help to share load with another organization. Moreover