Posted by: knightbird | August 31, 2011

The Coming Fiscal Crunch for Alaska Native Nonprofits

The Bristol Bay Area Health Corporation just laid off 19 employees this spring. Maniilaq similarly laid off 44 employees. Each organization blamed federal funding shortfalls and increasing cost for their need to lay employees off. With the rancorous debate over the raising of the debt ceiling in Washington, DC, and Senator Murkowski’s warning about funding declines in the next few years, we need to plan for a number of tight funding years. We are trying to be proactive to prevent layoffs, which is what I will try to explain in this post.

Chugachmiut manages a number of facilities: a large office building in Seward housing our medical and dental clinic; an office in Anchorage housing our administrative and social/culture services; and 4 Village Clinics.

We started to increase value through a refinance proposal for our Anchorage building. That refinance was just completed and returns about $174,000 in value through reduced payments, subsidies and energy savings.

We are proposing to our board sale of the building in Seward and using lean design of a new clinic. Lean design is proving itself with incredible efficiency gains among more health care providers. I have blogged about this before. Our early projection is that we might be able to save as much as $270,000 with this proposal.

Finally, we will be applying lean design to our administrative offices. We have a great opportunity to realize as much as $160,000 in additional value.

Our potential value creation through repurposing our facilities use is up to $600,000. This does not include any performance improvement potential we have. My estimate is that we can target another $400,000 in value creation through performance improvements.

What does this mean to us? It means that we can value people over facilities. $1,000,000 will fund between 10 to 15 employees. So when funding tightens up, we can continue to deliver high quality services to our Tribal Members. Preparation is key and anticipating funding problems is only sound planning. My team is doing a great job of preparation.

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Responses

  1. Thanks for sharing your approach, which seems to contain a lot of responsible foresight.

    I cringe when I see leaders state they were “forced” to layoff staff, which sounds like such a blaming and deflecting response. Organizations that have “no layoffs” policies have to operate every aspect of their approach in a way that allows that to happen.


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