The Coronavirus (COVID-19) pandemic has changed the landscape for many businesses meaning nonprofits have had to race and respond quickly to limit human hardships. Some of the government actions, combined with general uncertainty, are also causing a crisis of confidence in worldwide financial markets.
In this time of public health and economic challenge, nonprofits need the full picture of where they stand financially so they can remain nimble and respond quickly to the changing needs in their communities. The economic downturn is likely to cause a decline in donations. It’s critical that nonprofits take stock of their current financial situation, create forward projections and make early, intelligent decisions to shore up funding and engage donors.
Keeping donations coming in
Nonprofit finance leaders know that charitable donations are closely correlated with the direction and trends in the stock market. When the market is going up, individuals and corporations feel generous. When it’s heading down, donors pull back a bit to assess the financial situation as this chart from Giving USA demonstrates:
In light of so much economic uncertainty, it is more important than ever to engage with your donors and show them the concrete results of how your programs are achieving your mission. Going forward, you’ll want to be able to powerfully demonstrate both financial stewardship and positive outcomes.
7 Point nonprofit action plan
No one knows exactly how the current health and economic crises will play out around the world over the next weeks and months. Nonprofits must be proactive now to trim unnecessary expenses, review programs, and step up donor engagement in order to sustain existing programs and direct new efforts. Here are seven things you can do right now to increase your crisis management capabilities:
Steady your team
For nonprofit organisations, people, relationships and community are hugely important. COVID-19 has caused disruptions, anxiety, and uncertainty both at home, at work, and in the community. Stock market volatility and uncertainty around future funding brings additional concerns. It is critical to communicate often, acknowledging the changing reality and expressing the organisation’s support and flexibility in these tough times. Help your team stay balanced and focused on long-term goals, while supporting day-to-day needs and priorities. Stay connected with video conferencing and be creative in online activities. Calm fears, support flexibility, stay positive, and encourage your team daily.
Communicate with donors right away
Nonprofits need to get in front of the inevitable extra funding needs that the pandemic and economic weakness will cause. Ask your existing donors to help you create a cash reserve now that will help meet needs during this rapidly evolving situation. Show extra love to major donors. Increasingly, large donors are responsible for a larger share of total contributions. However, make sure you will remain among your major donors’ top priorities this year, knowing that smaller donors may have less to contribute in a shaky economy.
Stay on top of your financials
Now is the time to deeply analyse your current financial situation. Where can you conserve cash now to prepare for a potential drop in individual donations? Are there any funds that can be redirected to existing programs that meet community pandemic or economic needs? What would it cost to spin up new programs that address new challenges?
Apply donor engagement best practices to your website and communications
Share your vision through powerful imagery. Make sure all of your messaging builds and reinforces your brand. Bring donors into your story with metrics that demonstrate the urgency of your mission and personal stories of how you’ve helped. Expand your reach by ensuring your website, social media, and campaigns make it easy for people to give.
Review current programs
Knowing that needs will accelerate at the same time the economy is slowing, it’s time to study recent program performance in terms of financial outlays versus program impacts. What programs have made the biggest difference? What programs will be needed going forward?
Apply for new grants
If you will be offering services related to the pandemic, look for federal, state and local grants and apply early.
Get creative with fundraisers
In the months ahead, social distancing rules may make it impossible for you to host the in-person fundraising events you have planned before, such as charity auctions, dinners, and sporting events. Think about how you could recreate some of these experiences online, or better yet, get creative and develop entirely new experiences. Tools like Facebook Live, online meeting software, and social media can help.
These are unprecedented times for all of humanity. For nonprofit leaders, the pressure may come from both sides – increased need and potentially shrinking donations. Nonprofit crisis management will require flexibility and proactive management in order to make an impact, meet needs, and find enough funding. We’ll all need to pull together to get through these extraordinary challenges.
Nonprofits face uncertainty on two fronts—a worldwide public health crisis coupled with worldwide economic contraction. We know you will emerge from challenging times stronger, having found innovative ways to assist your communities by staying nimble. If you would like any support in terms your own financial management and making your software work harder for you, please get in touch or sign up for the coffee break demo here.
Or read the Case Study from Samaritan House and how they reduced audit prep time by eight days after moving to Sage Intacct. Like most nonprofits, Samaritan House works within a tight budget. The organization strives to commit the vast majority of its limited resources into providing “safety net” services such as food, clothing, shelter, and healthcare to as many as 7,000 low-income people in San Mateo County, California.