How to move forward with your nonprofit during the COVID-19 crisis

Blog Post

These are unprecedented times for nonprofits. As boards of directors and senior staff have tried to survive the last three months and face an uncertain future, here are five things they should look at to keep moving forward, or make the decision to merge or consolidate with another organization…or make the painful decision to close.

1. Should you stay open? This question may be easy. If your balance sheet is ok, the answer is yes. But what do you do if the balance sheet is ugly, and the prospect for the future is bleak. Too often, nonprofits work to just keep the doors open and keep the lights on. During this crisis we know that fundraising is going to be difficult. The people you serve may not be able, or are reluctant, to use your services. Close examination needs to occur to decide whether you should stay open, or use the time and efforts of staff to find other organizations that could be merged with or consolidated with. While this is a painful exercise, sometimes the best decision is the hardest.

2. Refocus on the organization’s central mission. What is it that your organization does best? Drill down to its core and focus on that. If you don’t have a mission statement, get one. Focusing on this mission may even be more important than anything else. Without this focus on the mission, making decisions may be blurred and chaotic, and lead to running in multiple directions which will only make matters worse. Reach out to your funders and core constituency to help you focus on the mission and raise whatever funds are available to capture.

3. Reduce expenses. If you were eligible for a Paycheck Protection Program loan or other type of monetary relief, hopefully you went after it and got it. But now more than ever you must prepare for the impending effects of the coronavirus on the economy which will ultimately affect your organizations existence. Looking at how to cut costs at every level of the organization is essential. This will probably include laying off staff. Remember that while it is a terrible thing to let someone go, the role of the board and senior staff is to make sure the organization survives. Look at reductions in salary, hiring freezes, elimination of non-essential travel, delaying payments to vendors, and canceling programs that are financial killers.

4. Take advantage of your board’s talent resources. This may be a time for boards to become over-involved in the organization. There are probably people on the board that have certain skills and experiences, and funds, that will be invaluable and essential to keeping the organization alive and kicking. Further, assuming staff may have been let go or reduced during this crisis, the senior staff is going to be over-taxed. They may not have time to focus as much as they should on finances, merger or consolidation activities, restructuring of debt, reallocation of assets, tapping reserves or endowment, or even grant making opportunities. The talent and treasure of board members must be tapped during this crisis more so than any time in the past.

5. Plan for the future. While you deal with immediacy of every day issues, planning for the future is essential. It is likely that government funding will be reduced and fundraising will be more difficult, so careful budgeting needs to occur. Conservative planning that may be quite difficult has to occur. Planning for the next 30 days, 12 months, and 24 months will allow your organization to utilize steps one through four above and ultimately, if possible, keep the organization going.

Even in the best of economies, nonprofits constantly are worried about staying open and serving their mission. Now, in an uncertain economy and the prospect of 12-24 months of economic unrest, nonprofits must stay true to their mission, make difficult decisions, and plan accordingly. All of these combined efforts may be enough to keep the organization open now and in the future.

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