The nonprofit sector has experienced all extremes over the past four months. Funded service providers have continued to operate as essential services, while arts, sports and community organisations have been forced to close. Those continuing to provide services have seen their costs increase as they try to meet demand, while those reliant upon sales of a commercial product have seen their revenue decimated. No matter the situation, for those still able to operate, it is time to rebuild.
Top of the list for many is identifying revenue. Every organisation should be devoting resources to this task. It may not be practical to achieve high levels of commercial sales, however there remains potential for attracting funding, grants and donations. If your organisation qualifies for any form of financial relief, you should apply for it. Every dollar will matter.
Next, for those with commercial sales, such as social enterprises or arts organisation, alongside identifying funding, efforts should be made to achieve whatever level of sales as practical. It is likely your organisation will incur many of the costs in any instance, therefore any sales that cover the cost of goods and contribute to cash flow will be valuable.
Your board and management team should be reviewing your financial situation. Go beyond setting budgets. Have a projected cashflow prepared. It is important to know where money will come in and where it will go out. Knowing this enables you to ask ‘what if’ and be proactive in setting out strategies for your rebuild. Look at every non-essential cost and ask if you really need to spend that money over the next twelve months? If you must cut costs cut them from corporate and administration, while continuing to invest in great service delivery. Do you need that extra admin person? For many organisations the HR/IR function can be obtained via consultants or through a cost effective subscription for the short to medium term. This is not a reflection upon HR professionals or corporate staff. Many organisations build capabilities during good times, however these may be an expensive luxury in tough times.
Review every aspect of your organisation. Don’t sit on your past or current strategic plan. That was prepared pre-Covid19. It may continue to serve your purpose however take the time to review. Ask, what have we learned over the past few months? What does our community need? How will we meet those needs?
Look at potential partnerships and collaborations to ensure you have access to resources and capabilities for meeting community need, or for sharing costs and revenue. Now is not the time for territorial behaviour. You are aiming for long term sustainability.
Invest in marketing both your organisation and the impact of your services. Don’t discard marketing because of the perceived cost. A lot of marketing can be done for a small cost, even for nothing. When you market to your family of supporters you provide them with information and assurance, you give them something to talk about and to share; something to be a part off. Those supporters are your future board members, volunteers, employees, donors, customers and clients. Don’t assume they know what it your want them to know.
Lastly, put your 100 year lens on. Even after this pandemic has passed, there will be another or something equally as devastating on the horizon. Review your policies on financial surpluses. Even those funded agencies, which are not supposed to have unspent funds can find ways to minimise costs and stash a little bit away for a raining day – or several, long, cold, dark, wintery months!
I’m John Coxon. Since 2002 I have guided and advised boards and management teams of nonprofit organisations. I am an experienced nonprofit board member, executive manager, consultant and workplace coach. I would love an opportunity to chat with you via Zoom. Please email your interest and I will arrange an online meeting.