TABLE OF CONTENTS
Everything is uncertain.
Everything is on edge.
Everything is unsettled.
There’s fear, there’s trauma, and many around the world are struggling mightily. The pandemic and the resulting economic collapse constitute an existential threat.
There’s no guarantee that people will retain their jobs and that organizations will survive.
In the weeks and months ahead, nonprofits will need to remain vigilant, agile, and creative – that is if they want to keep staff on the payroll, to pay rent and utilities, and to provide a semblance of services during this crisis.
While thousands of nonprofit organizations successfully mobilized funds to aid frontline workers and vulnerable parts of the population, to help with research and testing, and to provide medical supplies and deliver meals – those nonprofits with missions that aren’t directly related to emergency response or relief have encountered plenty of challenges.
For example, nonprofits shed more than 1.6 million jobs from March through May, or 13 percent of all nonprofit jobs in America, according to estimates from Johns Hopkins University. That’s equivalent to 8.8 percent of an estimated 18.7 million job losses seen in that time across all nongovernment jobs.
Based on a survey of nearly five hundred and fifty nonprofits in ninety-three countries conducted between March 24 and 26, the report, The Voice of Charities Facing COVID-19 Worldwide, found:
- respondents reported negative impacts related to the virus (96.5%)
- a drop in contributions (67.9%)
- travel restrictions disrupting contact with clients, donors, and recipients (63%)
- issues with client relations (56.4%)
- disruptions to staffing (48.6%) or operations (37.6%)
- increased costs (34%)
- disrupted supply chains (31.1%)
Needless to say, it’s not an easy time to be running a nonprofit organization.
We created the following article to help guide you in this trying time; when fundraising and service delivery are more challenging than ever.
1. Shift your mindset
At a time like this, it’s important to respond quickly. Thinking swiftly and learning as you go is the only way in which you’ll be able to ensure that you are still able to provide the much-needed services that your communities rely on.
Additionally, if you embrace change, you will find yourself strengthening relationships with existing supporters and cultivating relationships with new prospects.
Furthermore, be prepared to be financially impacted. Anticipating to be financially impacted will take away the shock and let you plan, prepare, and better address challenges as they arise. Always plan for the worst, recognizing that troubles may unfold in fits and starts. Having Plans B, C, and D can mean the difference between pacing your nonprofit organization through a marathon and a slippery slide into financial and organizational exhaustion.
Xintong Chen, a Ph.D. student in NC State’s Department of Public Administration, looked at how nonprofits fared after Hurricanes Sandy and Katrina and found that there is a high risk of financial distress after an external shock, regardless of the sub-sector and previous financial health status of a nonprofit. Specifically, she found that total expenditures by nonprofit organizations declined by more than 10% in the year after a disaster when compared to the year before the disaster.
- Read more about financial leadership for nonprofits during COVID-19.
2. Pause and regroup
First, take a brief moment to breathe, think, and assess.
In a crisis, most of your organization’s energy needs to be concentrated on riding out the storm. Clear the decks of nonessential activity by labeling all initiatives launched before the crisis as “stop,” “start” and “continue.” Once you can see the horizon again, you can plan a cascade of more severe actions as needed regarding revenue, cost, and operations to preserve organizational viability.
Put all scheduled communications on hold
Put everything you had planned out and scheduled for months ahead on pause until you have a clearer idea about what you want your communications to look and feel like.
There’s already a story circulating in fundraising circles about an unnamed university that forgot to cancel its scheduled late-March planned-giving mailing to alumni. As a result, a letter went out declaring, in the midst of the pandemic, “There’s no better time than now to revisit your estate planning!”
This is a sensitive time, and you don’t want to come off as insensitive by asking for money at an inappropriate time and in an unsuitable way.
Understand your cash position
The best ratios that help with understanding how long your nonprofit can weather the disruption look at your liquid reserves:
This ratio calculates how many months of savings an organization has if it operates at its current rate and receives no additional income. The numerator subtracts restricted cash and receivables, assuming the organization will not be able to perform the work necessary to release those revenues. The denominator is simply the annual budgeted expenses divided by 12 months. This is the purest form of a reserve. It allows leadership to understand how much time they have to stabilize the organization. For many organizations, this is somewhere between 2 weeks and 4 months.
Ideally, you would prepare or update your nonprofit’s cash flow projections for the next six months showing expected inflows and outflows of cash, so you can work with the board to build out scenarios and make informed decisions about how to continue.
Once you understand your organization’s current cash flow, it’s helpful to plan for different scenarios and gauge what needs to happen for you to maintain level services or take other measures.
Building realistic scenarios (“what ifs”) will help you respond to unpredictable situations.
Pro tip: Remember that the foundation for all your decision-making should be: “What best advances the long-term mission of our organization?” Everything an organization does has value, but given the current situation, you need to ask yourself which aspect of the organization has the most value. This is a hard, but necessary step.
- Here’s an Excel spreadsheet to help out with cash flow projections developed by NFF.
- Here’s an Excel spreadsheet to gauge different scenarios developed by NFF.
Allocate resources to core programs
Allocate your unrestricted funding and critical talent to those programs and services that have the greatest impact on those you serve. But, also be mindful of where your discretionary dollars are currently going.
Bridgespan suggests that programs that aren’t covering their costs (thus commanding discretionary-dollar subsidies) need to deserve even more critical scrutiny—especially if they are less closely aligned with your organization’s mission and impact.
As a general rule, work to free up as much funding as possible for your highest-priority activities. Renegotiate the guidelines on restricted grants. Take the time to analyze your sources of revenue and to categorize each according to whether it is "in the bank," committed, fairly certain, or at risk. Such analysis will allow you to think through more nuanced financial scenarios.
- Program contribution analysis is a helpful tool here.
3. Have a robust strategy
Assess revenue streams
Previously, you focused on your organization’s expense side assuming no additional income. To move forward in a smart and strategic way, you need to also pay attention to your revenue.
Therefore, it’s essential to develop revenue projections based on the updated development plans and budget which take into consideration this new reality. These can be inputted into the cash flow projection for a more realistic picture.
And, as a nonprofit, you must also take into account impact – not only finances.
- Here’s a matrix map visual developed by Spectrum Nonprofit Services highlighting both the impact and profitability of an organization’s programs and looking holistically at how each program of an organization contributes to its impact and financial viability.
- Here's a fantastic resource for finding emergency COVID-19 financial resources developed by Grantspace.
Develop a communications plan and strategy
Developing and executing a communications strategy and plan so that your nonprofit is strategic in how it communicates to its audiences can have tremendous value.
From a PR perspective, depending on your organization's mission, there could also potentially be tie-ins to the current crisis that deepen the understanding and appreciation for the work that your organization does.
Having a digital strategy, in particular, is becoming a must for nonprofit organizations of all sizes.
Be prepared to describe how COVID-19 is impacting your nonprofit operations (e.g. impacts on service delivery, clients, staff, community etc.) and cash flow, and talk about steps your organization is implementing to address these.
Keep your board informed. They can help communicate with lenders and in some cases, they can help rally additional resources to get you through tough times.
- Here’s an excellent planning tool/resource developed for nonprofits by Category One Consulting.
- Here’s a guide to help with narrating the financial situation developed by NFF.
4. Become hyper-attentive and aware
Everything is shifting and everyone’s impacted. This includes not only your clients/beneficiaries but also your staff and volunteers.
This is why becoming hyper-aware and attentive to what’s happening within and outside of your organization is essential. Pay attention to the subtle (and not so subtle) changes that might be occurring, so you can address them with sensitivity and care. Such an approach will pay dividends.
The anxiety of uncertainty is taking its toll on all employees, creating the need for support more than ever before. That’s especially prevalent in the nonprofit sector, where teams are often already stressed, stretched, and at risk of burning out.
Employees and volunteers (as well as their family members) can be victims of COVID-19. For example, your staff may be grappling with stress, anxiety, or mental health challenges related to the pandemic and the resulting economic crisis. Think about how you can help your staff as they provide much-needed services to your beneficiaries.
Furthermore, the types of services your beneficiaries need could also be changing as a result of the pandemic. Stay aware and attentive as you may need to reassess the needs of your target population and shift your attention to meet any emerging needs.
5. Go big with online fundraising
Fundraising has been steadily moving online for quite some time already, but at the moment it’s more vital to nonprofit survival than it’s ever been.
All revenue streams, from foundations to individuals and even fees for service, are under extreme pressure. Indeed, for many nonprofits, thoughts today are not on sustainability but survivability.
So, if you haven’t gone big with online fundraising yet – now is the moment!
It’s becoming more evident than ever that nonprofits need to invest in robust and reliable online fundraising software and smart, creative virtual fundraising strategies and tactics. Online fundraising can help you reach your current and prospective donors, increase your reach, and find new ways to draw support for your cause.
GiveForms helps you raise more with less effort, making it easy for you to accept donations online. With intuitive and beautifully-designed donation forms, you can get started with online fundraising in no time!
6. Rework your fundraising appeals
Asking for donations is undeniably more challenging currently, but that doesn’t mean there isn’t a way for your nonprofit to seek support.
To start, it’s important to rework your donation appeals so that they make sense in the current context. It can’t be business as usual.
In the coming weeks and months, successful requests for charitable donations will need to be embedded in a larger expression of mutual empathy and solidarity, as all of us will need help, and all of us will need to do our best to provide help to others.
For example, you might compile and share a list of COVID-19 resources for the benefit of your audience, but also for donors and the community at large.
Ask after your supporters’ welfare and express sadness at not being able to share in-person experiences together, recounting past memorable events, and only then gently ask of “those who can” to consider a gift to help your organization through this fraught time.
Emphasize the long-term nature of your ties, and if a donor can’t commit to a gift, offer other ways to support the organization. Be prepared with specific examples such as participating in cultivation calls.
If you work with a vulnerable population that needs immediate help — such as the homeless or people with developmental disabilities — explain how your organization is helping.
Be clear, transparent, and thoughtful. If you’re struggling to keep your programs running or your staff properly supported, communicate that and make it clear to your community that their support is needed now more than ever.
Be flexible. Consider offering donors the option to defer a pledge payment or extend a payment schedule due to the economic uncertainty.
Pro tip: Consider which channel you want to use to communicate with whom. For example, email can provide a formal assurance that your nonprofit organizations is responding to the crisis and following precautions, while social media platforms can offer a more human touch to reassure people that you are taking immediate action and are responsive to their needs.
7. Reimagine your events
Spring is traditionally the busiest season for nonprofits. Spring and summer are generally the time when many organizations hold the majority of their fundraising events.
But now, many organizations have had to reimagine their events. With the mandate around sheltering in place, it's not possible to convene large groups of people.
And while some are still hoping that later this year we will be able to resume traditional events, many don’t believe the public will be ready for that, as we will all be proceeding with caution in how we reintegrate back into society.
Since fundraising events are a critical revenue stream for nonprofits, this disruption is not something that can be ignored.
So…This is the moment, if there ever has been one, to move your events online. While it isn't what most of us expected or even wanted — there are many opportunities in the virtual environment.
The benefits of hosting virtual fundraising events are plenty and extend well beyond the pandemic. Virtual events allow anyone anywhere in the world with internet access the opportunity to join your mission. This, consequently, allows you to expand your donor base since you are no longer confined to local donors and constraints of physical spaces.
Virtual fundraisers can raise just as much money as in-person fundraisers but the upfront investment is minimal in comparison.
Virtual fundraising events come in all shapes and sizes. Some are short, open, live-streamed events that attendees log into from wherever they are. Others take place over several days and give loads of opportunities for interaction and participation. Some organizations also choose to pre-record their virtual events and make them available to attendees to watch and engage with on their own time.
Read more about how to host your own virtual fundraiser in our in-depth guide.
8. Continue cultivating relationships
Connecting in person has long been considered as unsurpassed when it comes to cultivating strong relationships with donors, especially major donors.
But when that can’t happen, Zoom becomes your new best friend, or FaceTime, Skype, or WhatsApp video.
Pro tip: Many may view video conferencing as more formal than a casual meet-up, so be sure to set a relaxed tone.
And remember: Communication is key.
Always, but especially so now.
In times of crisis when many of us are dealing with competing demands on our time and attention, communication can lapse. Unfortunately, while understandable, this is the wrong course of action.
Communicate often, and genuinely. Authentically express the hardship that we are all experiencing.
Helping your donors understand first-hand what your constituents and your organization are facing allows them to support you in the most effective manner.
Share how your organization is maximizing impact and leading with your values – with the needs of our constituents and staff front-of-mind. This strengthens the connection and relationship donors feel with the mission.
Pro tip: In addition to donation appeals and campaigns, create and share engagement opportunities that supporters can participate in from the safety of their homes. Provide an option for those who can’t afford a monetary donation, but would still like to support your work.
9. Get on with the digital
In the past months, thousands of organizations shifted to remote working environments. Although many thought we would be working from our kitchen table for only a few weeks, it is clear that remote-work practices are likely to continue for the foreseeable future.
Remote working tools make it much easier to work online today than a decade ago, but remote working still requires some intentionality.
Build trust and encourage teammates to set expectations. Appreciate each other and find the time to recognize our efforts, formally and informally.
The challenge is always, but especially online, how to get the right information to the right people. You cannot copy the entire office on every email, but sometimes it feels like that is the only way to keep the right people in the loop.
Most organizations are now working with email that is hosted in the cloud, including Office 365, Gmail, or email hosted by your Internet service provider. If you are using either Office 365 Nonprofit or G Suite for Nonprofits, you are really well set up to work remotely already.
Slack is a popular communications tool that helps keep your organization connected via direct and group messages along with "channels" that can be used to centralize discussions on specific topics. A free version of its Standard Plan is available to organizations with fewer than 250 employees.
TeamViewer is another option for organizations with distributed staff. It can be used by your IT staff to remotely manage devices (whether laptops or IoT devices) or by your staff to collaborate among themselves using video conferencing and online collaboration features.
Document management and collaboration
The free Google for Nonprofits offer includes Google Drive Basic, a business version of Google Drive that allows you to set sharing and access permissions. This can be used by any organization, even if you're using Office 365, and is a fast way to create a document repository in the cloud.
Box is another great option for small organizations (needing 10 or fewer licenses) looking to move documents quickly into the cloud.
In looking to maintain oversight of your team’s productivity and progress, project management software is vital.
Trello makes it easy to set up workflows, create and assign tasks and check-in with the appropriate team members as necessary.
Cureo is a collaboration software for nonprofit project teams, boards, and committees. It gives users the ability to share files as well as manage tasks, meetings, and events.
Your individual team members should also be able to easily keep track of their productivity and progress, as well. Timely, for example, automatically keeps a record of an employee’s time spent working — then automatically generates reports based on their productivity levels during these times.
Pro tip: Consider hopping on a 20-minute call every day so the team can check in with each other and share urgent priorities. This approach might not work for every organization, but it could be a great way to get everyone on the same page. Create guidelines about when to use instant messages, email, and phone or video calls.
The world post COVID-19
These are unprecedented times, and we’re all learning as we go along.
As new cases of COVID-19 start to drop off and economic life appears to stabilize, your nonprofit needs to be ready with a strong strategy to perform and accelerate through recovery. Cash flow and revenues won’t immediately balance out or return to normal levels, leaving many organizations on an uncertain footing in the early recovery.
The pandemic has been very difficult in many ways, but we do have an opportunity, as a community-at-large, to adapt our culture to be more fluid, nimble, and agile. To pivot and approach issues more with more innovation, and to look at our work differently going forward.
None of the steps here are easy – especially in a time of crisis. However, by inviting others in, communicating clearly, looking at the organization holistically, and understanding where we’re starting from financially, nonprofits can build commitment, surface strategies and implement solutions to help their organizations survive and eventually – thrive.
If your nonprofit is looking for more inspiration and tangible tips on how to move forward and raise more donations to support your mission, check out GiveForms and our blog to walk away with insights, ideas, and motivation to take your nonprofit fundraising and marketing to a new level.