Undoubtedly, nonprofits play an important role in Nashville’s economy. In the wake of the COVID-19 pandemic, however, they’re more likely to get left by the wayside due to a number of factors.
In addition to being a health crisis, the pandemic has also resulted in a financial crisis, limiting many donors’ ability to give to social organizations. Furthermore, most nonprofits get funding through fundraising events, which had to be postponed or canceled due to social distancing protocols.
Nonprofits may be mission oriented, but just like small businesses, they also have expenses to pay, including salary for the staff, rent, utilities, and other overhead costs. If you’re a nonprofit in Nashville and are currently feeling the pinch caused by the pandemic, it’s important to consult your CPA firm about surviving the crisis, and hopefully thriving through it.
Here are some pointers you may find useful.
Watch your cash flow
Find ways to minimize the outflow of cash. If you can, defer payments that will not impede your operations and key services, such as rent and non-essential supplies. Negotiate with your landlord and suppliers, and take advantage of loan assistance for renters, as well as any government-sponsored assistance for nonprofits. Ask for help from donors or board members who may have the means to provide additional funding.
Consider salary cuts, starting from the top management, or furloughing employees, but always be mindful of your staff. As much as possible, make them a part of your decision-making process. When the crisis is over—and it will be—you’d want to keep the best people in your team, especially those who have shown dedication to your cause, or whose expertise are needed to fulfill your mission.
Triaging is key
Revisit your main goals and missions, and identify the most critical aspects of your operations. Focus on the long-term survival of your organization by giving priority to your most crucial needs and temporarily setting aside the less important ones.
Understand your type of nonprofit, and consider that donors will also likely be triaging. If you’re a responder, such as one that provides food and shelter to the needy, most likely, you’ll be on top of most donors’ priority lists, and your survival is better assured.
If your organization is involved in programs that may be deemed less critical, such as an art or community center, you may have to work harder to find the funding to keep your nonprofit afloat.
You might also have to consider hibernating and preserving your finances until you can operate again with fewer restrictions. In the meantime, take the opportunity to plan for the long term, keeping the “new normal” in mind.
Explore restructuring
If you’re a highly localized nonprofit, consider partnering with larger organizations—both nonprofit and for profit—with whom you can collaborate for certain projects. You will need their resources and they will need your grassroots expertise. If you’re the larger organization, partnering with smaller, hyperlocal nonprofits will help you gain better access to your clients and their needs.
Nonprofits are on a difficult road in this crisis, and the best way to go through it is to squarely face the situation and look deeper into your organization to find ways to survive and thrive.
Sources:
8 Steps Nonprofits Should Take Now to Survive the Pandemic Fallout, Philanthropy.com
Nonprofits Hurt by COVID-19 Must Hoard Cash to Hold On, HBSWK.hbs.edu
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