Several months into the COVID-19 crisis, most not-for-profit 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 not-for-profit needs to focus on three areas: social impact, economic viability and capacity to deliver. Let’s take a look.
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, DC not-for-profit 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 not-for-profit may refine its model to offer virtual options and staggered use of venues while communicating the need for physical activity.
To survive the current environment, the best-positioned not-for-profits rely on predicable revenue and keep expenses in line with projections. Successful not-for-profits 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:
- 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.
- 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 not-for-profit.
- 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 not-for-profit’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 not-for-profits 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 not-for-profits 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 not-for-profit’s larger mission and strategic plan.
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Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.