Friday, November 16, 2018

When cost-cutting goes awry - no coffee for the NRA

In the United States, the major goal of public companies, most private companies, and even private non-profits is to maximize short-term earnings. And the best way to maximize short-term earnings is to cut costs. The theory is that cutting costs by "capping" expenses and "right-sizing" employee counts may cause temporary pain, but won't hurt the organization in any big way and will lead to a healthier organization in the future.

Well, except when the cost-cutting blows up in your face and scalds you.

By Consumer Reports, CC BY-SA 4.0, Link

Take the National Rifle Association. Ignore the political stance of the organization for the moment, and just look at the NRA as just another non-profit that has encountered a decline in revenue.

(OK, allow me one political aside; the reason that the NRA is getting less revenue is because its supporters are in power. When NRA opponents were in power, the NRA could conduct effective fundraising to get donors to counter the Obama threat. It's harder to scare people into donations when the White House and Congress are friendly to your cause. Similarly, abortion rights groups are presumably seeing an uptick in donations now that pro-lifers are in power.)

So, when you encounter a decline in revenue, you cut costs.

And everyone's talking about the NRA's latest cost cutting move.

The National Rifle Association is doing away with free coffee and water coolers for employees at its Fairfax, Virginia, headquarters — a cost-cutting move that has NRA insiders “freaking out"....

“The whole building was freaking out,” said one former employee who remains in contact with current staffers. Three other sources familiar with the gun group’s operations confirmed the story to The Trace.

So what will happen to the NRA because of this negative publicity? One of two things.

Perhaps this will energize NRA supporters to substantially increase their donations to ensure that the NRA's positions are communicated to politicians and the public, and to ensure that NRA employees don't end up sleeping on the job.

Alternatively, this may de-energize NRA supporters. "If the organization's failing anyway," they might reason, "why should I throw in more money to an organization that might go the way of Sears?"

Now some cost-cutting can be good. If you recall, the Wounded Warrior Project was publicly criticized for lavish over-spending by its former executives. While there was a drop in funding after the exposure, the whole episode was necessary to ensure the long term success of the organization.

But even the biggest anti-gun advocate isn't going to argue that coffee and water are wasteful expenses.
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