For Impact


Re-allocation and The Olympics

Blog | | Tom Suddes

Actually, everybody has plenty of money, it’s just going for the wrong things.

Here’s a story on Re-Allocation and the Olympics.

As I watched the closing ceremonies of the Beijing 2008 Olympics, I was reminded of a story from the 2002 Winter Olympic Games in Salt Lake City.  Mitt Romney (yes, that Mitt Romney) took over the 2002 Winter Olympic Games in Salt Lake City.  He was faced with a Herculean task.  Following a widely publicized scandal, Romney had to “assure jittery sponsors, re-invigorate a dispirited workforce, endure the bright lights of the international media scrutiny and regain the confidence of a leery public”.  Oh, and insure 3,500 athletes, hundreds of thousands of fans and 9,000 broadcasting and print media that SLC had arenas to compete in, beds to sleep in and a transportation system to move about in!

Romney stated, “When I started, I presumed my job was to overcome the scandal, re-build public confidence in Salt Lake Games and re-ignite the spirit of the organizing committee team.”

“But I soon found a large $379M hole that we had to dig out of.”

Romney decided that to get out of that hole, they had to both cut costs by $200M… and raise another $200M from sponsors and “donors”.  Here’s how he did it.

In order to find $200M in reductions/cost savings, Romney applied the big lesson of RE-ALLOCATION!  In Romney’s words, “The $200M savings was going to come from a myriad of small efforts.  When an organization has to make cuts, the worst thing you can do is to make everyone BLEED EQUALLY (my caps).  Instead, we identified our top priority of providing superb sports facilities… and we didn’t take one dollar out of that category!  We took the savings out of ‘nice to have’ things, like decorations or celebrations.”

‘Across the board cuts’ in the nonprofit world is the same as “bleeding equally”. Romney met his goal by RE-ALLOCATING funds based upon what was IMPORTANT!

In our For Impact world, and specifically within our development/advancement efforts, that’s RE-THINKING and RE-ALLOCATING our total development budgets based upon PRODUCTIVITY and PRIORITIES. 

Here’s a simple example.  Assume you buy into ‘MAJOR GIFTS’ as the most productive and most effective way to raise the most money at the least cost.

You would then look at your entire development budget and RE-ALLOCATE funds to your SALES TEAM.  This increase would not come from incremental dollars to your budget, but rather by eliminating or reducing EXPENSES in areas such as mailings, special events and silos. 

Do we really need planned giving ‘officers’, corporate and foundation ‘officers’, stewardship ‘officers’… or would we be much better served with “feet on the street”, “boots on the pavement”???

P.S.  Romney also went out to RAISE the additional $200M by focusing on LARGE SPONSORS and on TICKET SALES.  They broke the Olympic record at the time by raising $859M from domestic sponsors!  (The Atlanta Games raised $481M.)