A few weeks ago, Christopher Penn blogged about his "Top 5 Non-profit strategies for severe recession." Today's news, about the run on Bear Stearns, oil at $112, and the Euro costing $1.60, made me stop and think that the recession that we've been worried about for the past few months is now actually upon us.

He had five recommendations for non-profits to survive the upcoming recession, all of which are valuable:

1. Batten down the hatches and be ruthless about cutting costs.
2. Hit up donors sooner rather than later.
3. Increase focus on microdonations.
4. Build buzz -- focus on marketing what you do.
5. Mind your money -- make sure your financial institution is safe.

I'd like to add an additional recommendation to the list above: Focus like a laser on your strategy and how you are going to execute on it. Tough times mean fewer donors, trying to do "more with less," and greater challenges all around.

Using your strategy (how you will accomplish your mission) as your framework for decision-making, you'll find that there are areas you should invest in further, and areas that you should pull back from.

We suggest to our clients that they do an initiative alignment and rationalization process at least once a year (or whenever their strategy or the external environment has changed significantly [like it has recently].)

Initiative rationalization has four major steps:

1) Inventory your initiatives. Before you can rationalize your initiatives (or projects), you need to know what they are. Depending on the size of your organization, you could have between 10 to 1000 initiatives underway at any given time. (See our wiki for a definition of initiatives.)

2) Categorize your initiatives. After gathering your initiatives in a list, you should categorize them into several groups, like:

• New Projects
• Major Investments
• Mandatory (Required) Projects
• Ongoing Projects

This is by no means a comprehensive list -- it's just an idea of the "buckets" that you could use. The important thing is to get them into categories.

3) Map and prioritize your initiatives. After you have your initiatives categorized, focus on the major investments, new projects, and discretionary projects (i.e., not the ones that you need to do for regulatory, etc., reasons.) The best way to rank your initiatives is develop an rating that includes the strategic impact, level of investment, resources required, and length of time before impact. Using this ranking, order your initiatives by importance.

4) Rationalize your initiatives. After ranking, you'll need to make some decisions about what you fund, what you defer, and what you decide to stop doing. After all, the heart of strategy is about "saying no" to some things. It's a hard process, but ultimately one that will add a lot of value, as you will be ensuring that you are investing in your strategy.

Typically, organizations should reserve about 20% of their budget for new initiatives that help them meet their strategic goals. How are you doing against this benchmark?