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Nonprofit COVID Update: 3 Things to Monitor Now

8/19/20 – Stephanie Allgeyer

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Several months into the COVID-19 crisis, most nonprofit organizations have formulated at least a temporary plan for sustaining operations. But short-term solutions should be complemented by long-term strategic planning that reprioritizes objectives. Specifically, your nonprofit needs to focus on three areas: social impact, economic viability and capacity to deliver. Let's take a look.

Social Impact

What social impact do you hope to achieve? Your answer to this question may have changed since the beginning of the pandemic. To respond to immediate needs, many organizations have forged new partnerships and shifted how they deliver programs and services. Some are adopting wholesale systemic change.

Take Bread for the City, a Washington D.C. nonprofit that provides food and medical, legal and social services. When it was forced to close its food pantries to the public, the organization arranged for new partners to help distribute groceries to those in need. It also expanded its medical services to include teleconferencing and COVID-19 testing.

Bread for the City reframed its value in the current environment. To invigorate donors, supporters and staffers, you need to do the same. Question why your mission matters now and how you can demonstrate why it matters. For example, an organization that provides athletic programs for inner-city children may be hampered by social distancing guidelines. But with innovation, the nonprofit may refine its model to offer virtual options and staggered use of venues while communicating the need for physical activity.

Economic Viability

To survive the current environment, the best-positioned nonprofits rely on predicable revenue and keep expenses in line with projections. Successful nonprofits also have enough cash on hand to cover routine costs and emergencies, as well as a contingency plan for dealing with dire circumstances.

Can your organization make these claims? If not, take the following steps:

  1. Survey the landscape. Assess what you have and where it comes from. Can you cover monthly operating expenses with cash on hand? Do you have enough donor diversification to survive if you lost some of their support? Although this may not be the best time to pursue new funding streams, quantify how much you rely on existing revenue and what you could do if a funding source dries up.
  2. Work out several scenarios. Envision the best and worst scenarios as well as the most likely and detail how you'll respond in each situation. Long-term survival may require you to scale back operations in the short term — or consider a merger with another nonprofit.
  3. Be candid Reach out to donors and other stakeholders and have forthright conversations, even if that sounds uncomfortable. Ask how they plan to continue offering support so that you can gauge the reliability of your revenue stream.

Capacity to Deliver

During the past few months, COVID-19 restrictions may have forced your organization to switch to virtual operations, scramble to make up for lost volunteers and deal with other capacity challenges. One of the most important factors to surviving an environment where resources are scarce is good leadership. Informed decision making is critical, but sometimes speed is of the essence. Your leaders must have good instincts and know your organization's capabilities like the back of their own hands. Of course, leaders can't go it alone. They also need an outstanding support team.

Other factors supporting capacity include:

Adaptability.  You can enhance your nonprofit's ability to adapt by projecting possible shifts in needs, behavior and services six to 12 months out. For each change, set concrete goals and determine alternate solutions.

Collaboration. Many nonprofits have teamed up to provide services during the pandemic. If your organization is contemplating a partnership or joint venture, know that if may require you to step outside your usual role.

Technology. According to a recent survey by Salesforce, 85% of nonprofits acknowledge that technology is important to long-term success, but only 23% have a technology use plan. The need for robust systems and knowledgeable workers is increasing. Remember this as you allocate funds and recruit new staffers.

Focus on Your Larger Mission

You may find yourself changing processes and resetting priorities on an ad hoc basis as the pandemic and financial crisis evolve. Just remember to square these changes with your nonprofit's larger mission and strategic plan. For any questions contact VonLehman’s Nonprofit Group leader, Stephanie Allgeyer, at sallgeyer@vlcpa.com or 800.887.0437.