Tips to Properly Balance Mission and Money

For every community rec organization, there is a balance between fully delivering its mission and ensuring its financial viability. The classic money versus mission argument is having a moment, as keeping our doors open to the community has proven to be a struggle. At least within YMCAs, our existence has been based on our ability to attract and retain memberships. Our membership operations are more challenging than normal given state-mandated capacity restrictions, enhanced health and safety regulations, and our struggle to maintain enough staff members to offer our services to the community.

I spoke with a CEO during the last week of July who told me their organization is losing more money by having their YMCA facilities open than if they were to close them. A vice president within another organization recently told me two of their facilities will likely remain closed until January because that is the first month their finance team projects they can earn a profit. And we have all seen the stories of YMCAs who have been forced to permanently close locations (Example 1, Example 2, Example 3).

The current struggle hinges on the function our organizations are attempting to take within our communities. By attempting to remain functioning within the same areas we were offering pre-COVID, we fall short of the needed participation total within our facilities required for these sites to generate a profit. And since our profit margins are already razor thin, indefinitely extending the life of loss leader programs has become much more difficult to justify than they once were.

Here are three tips to properly balance mission and money:

Match Your Pre-COVID Operating Ratios

Adjust your expenses according to your profit margin, not your total revenue. If, prior to COVID-19, you made $250,000 per month in membership revenue and had $200,000 in monthly membership expenses, your profit margin was 20% ($50K/$250K). Your goal should be to maintain that same profit margin post-COVID shutdown. If you now are making $150,000 per month in membership revenue, to obtain a 20% margin, your expenses would need to be $120,000.

Perform Partner Check-Ins

Call up your best partners in the community, and learn about their current organizational issues and expected future problems. Do not try to brainstorm solutions or offer any help. Simply ask enough probing questions so you can walk away from the conversation with as full of an understanding of their current position as you can.

Start a New Program or Service

Do more than adjust your current programs. If you were great at offering in-person group exercise classes and decide to start offering virtual streaming classes, that’s not a new program — it’s an extension of a current program. Launching a completely new program or service will engage new individuals and communities. Program or service extensions are good, but new programs or services are great. And if your new program or service can be a partnership that is generated from your check-in calls, you get bonus points.

Traditional bottom-line management practices are needing to be balanced by our service to the community. Our future relevance must be simultaneously guided by our mission and money — we can’t have one without the other.

Adam Shilling

Adam has worked at YMCAs since 2005 and currently serves as the Executive Director of Membership and Program at the YMCA of Greater Grand Rapids. Having worked at an independent Y association, multiple large associations, and Y-USA, Adam brings a well balanced perspective for the many ways that YMCAs work with their communities. He has a passion for using data to inform conversations and partnering with other organizations to address community needs.