Crisis Management

Issue Faced. Financial Crisis

Industry. National disaster relief agency

Location. N.E. Mass and Southern N.H.

Size Of Company. $8-10 million

Who Brought In The Team. The Chairman of the Board and a Bank President, Chair of the Stabilization Committee

Goal Of Assignment. Stabilize the operation, review the financial condition and evaluate actions to recovery. Determine the ability to continue on as a going concern.

Actions Taken. (1) evaluated the financial, payables exceeded total liquid assets and cash position critical. (2) recommended several personal actions (terminate the Executive Director for misuse of funds) brought three creditor law suits to a stop and began negotiations with major creditors who were all over 120 days. Reduced payables by 20% by creditor gift/payable agreement. Evaluated marketing/development effectiveness and presented a more aggressive program to the Board for approval. Raised prices on all educational services and training programs. Developed new budgets for two fiscal years. Included these budgets in a “relief grant” with required financial ratios, tasks accomplished, actions to be initiated, detailed mileposts for development (Donor focused vs. Consumer oriented), direct mail events and financial cash management actions. Two months after my leaving, they received the grant which was the largest (by percentage) ever awarded by the national organization.

Results. Grant received forgiving past due assessments ($ 92,500) future two years assessment (provided mile posts met) ($304,000). Twenty percent “forgiveness” reduction in payables accomplished including the abeyance of three lawsuits. Balanced this with a “payment schedules” planned to meet both creditors expectations and internal cash flow requirements.

Total current year savings $143,500. Total savings $ 447,500 over the future two years.

Reorganized the development department, trained the department heads on budgeting procedures with full absorption of O.H.

Testimonial. “Nothing anyone said could have prepared me for the amount of work accomplished during Arthur's tenure. Difficult decisions where made easier with his guidance and negotiations with vendors and agencies were harmonious and quite successful. Most importantly, our missions of service to the community was never compromised.” — Marilyn Fitzgerald, Chairman