One of the toughest tests a business can face is being forced by an economic downturn to find new ways to function with fewer employees.

Solving that problem has become far more than just an academic exercise these days at Junior Achievement of Central Pennsylvania, which last month laid off a significant portion of its staff, including its president, as the recession continued to erode its revenues.

Unlike most businesses, however, the shortfall at Junior Achievement is not the result of a decline in the demand for its services.

"Financial literacy is a hot topic. The demand is higher than it's ever been," said Jim Schmucker, corporate board chairman of the Lancaster-based nonprofit organization, whose volunteer instructors provide business education in more than 700 classrooms in its nine-county region.

"This year, we have a demand for a record number of kids," he said. "The challenge is, can we raise the funds to actually provide those services?"

Schmucker said his board and remaining staff think they can, in good part by refocusing their efforts to rely more on volunteers and technology to make up for what they've lost in staff.

At its peak, Junior Achievement employed 11 people, some of them part time, Schmucker said. That's now down to four full-time employees and two part-time contractors. But its volunteers number well over 1,000 each year.

The organization had been growing steadily since its founding in 1955, both in revenues and number of students served, until about 18 months ago.

"That's when the red flags went up," Schmucker said. "The question was, was it us or was it the economy?"

Junior Achievement's budget, which was $833,000 last year, is built on a combination of corporate and individual donations, foundation support and several fundraisers.

"We beat on the corporate world pretty hard," Schmucker said. And that world pointed to the economy as the answer to the question.

"The donors said, 'We simply don't have the revenue,' " Schmucker said.

Most longtime supporters are still providing money, he added, just not as much as they had before the economic downturn.

That trend became even more acute last summer when the Legislature hit an impasse in formulating a state budget.

In previous years, Junior Achievement gleaned 10 to 15 percent of its revenues through the state's Educational Improvement Tax Credit Program, which allows businesses to write 75 percent of their contributions off their state taxes, mostly on a first-come, first-served basis, up to a capped amount set in each year's state budget.

That annual limit is usually reached July 1, the first day nonrepeat donors are allowed to submit applications, with successful applicants notified in August and those donations rolling in to educational organizations such as Junior Achievement within the following 60 days.

All that was put on hold this year with the state budget impasse. When the dust cleared, the cap was 30 percent less than it had been and successful applicants weren't notified until the middle of November. Next year, the cap will be cut an additional 20 percent, Schmucker said.

Other donations also seemed to lag as businesses held off to see if the Legislature was going to raise business taxes, he said, and the falloff in overall donations appears to be in the same range as the cut in the tax-credit program.

Seeking a silver lining
Schmucker was distressed at having to lay off two full-time and two part-time employees about two weeks ago. Another vacant position will go unfilled.

"I felt like we were throwing family out the window," he said. "But we just didn't have the money to pay them."

Still, he tries to take a positive view of the changes that have been forced on Junior Achievement.

"There's always a resistance to change," he said. "It's easier to do it as you had been doing it rather than to force change. Now, we have to force change."

For one thing, the organization's corporate board and regional boards are being asked to take more active roles in management.

Schmucker said he and his executive committee have taken over the departed president's legal responsibilities.

Schmucker has been on Junior Achievement's board for eight years and a volunteer business-literacy teacher for 13. He is a former president of The Lancaster Chamber HealthCare Plan who now concentrates on managing his own investments.

He had stepped down as the board's vice chairman a couple of years ago to become the organization's interim managing director during a nine-month search for a new president, returning to the board as chairman in July.

Schmucker said the board expects to hire another president before long, but it has not begun a search to fill the position. He views all the layoffs as temporary.

In the meantime, day-to-day leadership of Junior Achievement has shifted to Becky Doumaux, its director of education.

She said the four regional boards will be taking on a more active role, too, particularly in delivering materials, recruiting volunteers and representing Junior Achievement in formal check presentations.

"The regional boards will take almost sole responsibility to design and implement their fundraising events," Schmucker added. "They were always part of it, but in the past the staff led that."

June Harr, one of the staff members laid off last month, had helped oversee some of those tasks as district manager for Dauphin, Lebanon, Juniata and Mifflin counties.

"I did love my job. [Losing] it is very difficult, but it was a business decision that had to be made," Harr said.

"JA is a wonderful organization ... and it's got a great program," she said. "Businesses should really, now more than ever, reach out and try to help."

Tapping technology
Another change that Junior Achievement is counting on to see it through the economic downturn and beyond is a greater reliance on technology.

"We've come a long way in the past 24 months in hardware and software to allow us to catch up," Schmucker said.

One example, he said, is the financial tracking software the organization is now using to comply with state and IRS requirements, and oversight by JA Worldwide, its parent organization.

That has reduced what used to be a 30-hour-a-week job to a task other staff members can perform in about a third of the time, he said.

Another example, Doumaux said, is the elimination of paperwork through a software program called Constant Contact, which keeps all the communications between staff, volunteers and schools — including the formal paperwork associated with the education programs — organized.

In the past, Schmucker said, "We had a person in charge of chasing every one of those pieces of paper."

He hopes that software and improvements to the organization's Web site will allow Junior Achievement to engage its volunteers at a higher level.

"We have a vast volunteer network, but we've not been doing a really good job of making them part of the JA family," Schmucker said. "We have to connect our donors, our volunteers and our schools. That circle has to be there."

The goal, he said, is not only to continue providing existing services, but also to step up the program despite the economic downturn.

"The topic is ageless, and the materials JA [Worldwide] puts out are always relevant," Schmucker said. "Our strategy and emphasis is how do we deliver it more efficiently?"