The first six months of 2020 are almost gone and what a six months it has been. Only the most forward looking and astute would have predicted the impact of Covid-19 on January 1st. We might be over the hump however were not over the impact of Coronavirus. The potential for a new wave of infections will hang over every social agency as they move into 2021.
Clearly, top of everyone’s minds during the next six months is risk management. Starting with how to minimise risk in our daily operations, while planning for how to cope if there is a serious outbreak in the foreseeable future.
Only half a rung below, and closely aligned to managing risk is financial management. Those in essential services were able to maintain operations and service delivery on a reduced basis. Other nonprofits, especially in arts and sports were forced into shutdown. All, regardless of their situation have been financially impacted.
It is very important to review and update financial forward projections. Know what might happen down the track is critical to remaining viable. If you can see where things might go pear shaped you have time to put in place alternative strategies. Preparation for your move into 2021 should commence today.
If your organisation hasn’t recently updated its strategic plan then now is also a good time for a review. This doesn’t need to be a grand event. Simply bring together your board and management team to answer two questions. Is the impact you have consistent with our vision, mission and overall direction? Secondly, is there anything we need to change or do differently? High quality service delivery with great impacts, where lives are changed is your best friend as you move into 2021. Funders will increasingly look for organisations able to demonstrate that money is used to create identifiable impact.
There is one expense area you should look to increase the amount you spend. That is marketing. When times are good you can get away with saying little about yourself. When times are difficult you need to blow your trumpet. There are two types of marketing, institutional and program. Institutional marketing is where you talk about your organisation. Program marketing is where you talk about the impact you have – how your programs change lives. Marketing is critical for keeping your organisation front and center among your family of supporters. Funders, clients, customers, community and volunteers want to know that your organisation is well positioned for the future. They want to know what you have done and how you have future proofed the organisation and they want to know how you are using your funds to future proof others.
Lastly, as you prepare to move into 2021 you must look at how you gather your revenue. In good times funding by Government is viewed as a positive and few organisations seek to diversify from a regular stream of funding. In bad times Government funding can be seen as both a positive and a negative.
If you are part way through a funding cycle when the next crisis occurs then you may have some breathing space. Having access to funding and being allowed to continue to operate as an essential services brings with it a responsibility to provide services regardless of the cost. Often you will be expected to fund any increase in the cost of service delivery from your own financial reserves. This means you must start planning for those reserves now.
Having revenue generated from your own means allows you to determine how that revenue will be utilised. Revenue you have generated is often ‘untied’ to funder requirements or political policies. It takes time to develop the capacity to generate untied revenue – many years in some instances – so the time for planning to do so, is today.
As can be seen, moving into 2021 requires a plan. That plan may be to continue with what you have been doing as your review shows no need to change; or it might be that changing circumstances require a new plan.
When you plan to deliver great services with a defined impact and you tell the world how you do that as well as what you achieve, then you provide your family of supporters with assurance and confidence in your abilities and you give them a reason to keep funding you, or to continue to purchase from you.
John Coxon is a consultant and has been guiding and advising nonprofit social agencies since 2002. John is guided by a four step process designed to help you remain viable and sustainable. Email John.