By Nanette R. Fridman
It’s been a harrowing March and April. For nonprofits, the first two weeks were a period of shock, physical relocation and a crash course in business continuity planning. During weeks two to four, cash flow and budget forecasting brought many organizations a sober reality. Emergency campaigns launched. Furloughs, reductions and layoffs began. In business models, crises exacerbate weaknesses in reserves, human resource policies, technology and more.
At the same time, crisis disrupts and allows tremendous creativity – as necessity is the mother of invention. Amazing examples of resilience and innovation emerge, as nonprofits adapt to new realities. We’ve seen legacy organizations use technology to deliver programs, classes, services and events; schools set up online learning; and business functions learn how to operate remotely. Management, staff, board members and volunteers roll up their sleeves and work hard. We’ve created virtual communities.
In addition to resilience, there are silver linings. More people have access to services, programs and events than ever before – not confined by geography, transportation or time. We’ve avoided spring gala season, and lots of chicken and salmon dinners that last 3 hours (a little fundraiser self-deprecating humor). Instead, some organizations learned how to host 45-minute virtual events and continue to raise funds.
Outside our nonprofit organizational lives are more signs of resiliency. The environment is healing itself. The arts entertain us at home. Many businesses are making masks; bringing supplies to those in need; and racing for testing, drug discoveries and vaccines. The federal government passed the CARES Act for small businesses and nonprofits.
As this adaptation and pivot period ends, with its challenges, heroes and silver linings, we now ask what’s next.
Every nonprofit organization needs to engage its best and brightest in strategic scenario planning and ask these questions:
- What part or parts of your mission is most critical in light of COVID-19?
- What is your new or revised vision?
- Does your existing strategic plan need to be updated?
- Now that you’ve pivoted, how will you continue to evolve? What do you want to purposefully experiment with and how will you iterate?
- What is your business resumption plan? What does a May 15, June 1, July 1, August 1 or September 1 return to partial or full normal business look like?
- What are the financial implications of these dates?
- Are staff reductions or additions required?
- What are your financial models and projections? (Note: I suggest doing this in an excel spreadsheet with formulas that allow you to easily change one input for a new projection.)
- Earned revenue
- Expenses (include payment of loans or lines of credit incurred during this time)
- Philanthropy (include projections arrived at by a line by line assessment of your donors)
- Programs and Services
- Based on your financials, what are the programmatic and staff ramifications?
- How has technology potentially changed who you serve and how you serve them post-COVID-19?
- How will you measure impact and quality?
Real talk: some organizations aren’t going to make it. And in truth, it probably makes sense for them to close because there isn’t a real market for their services, or their business model is unsustainable regardless of COVID-19.
Despite financial challenges, some organizations with valuable, relevant missions and strong programs, staff, reputation and quality, will survive as a result of philanthropy and/or collaboration, merger or consolidation. Philanthropy has never fallen off the cliff. To be sure, it will be reduced by donors and by amount per gift for some, and there will be more competition.
As for collaborations and strategic integrations, they aren’t a cure all, and are best done from positions of strength, not weakness. In truth, many are not successful. However, if you’re offering an invaluable service or program that fills a unique and otherwise unmet need and you can get over any hubris, your board should explore collaboration, merger or consolidation for your mission’s survival.
Organizations have shown their resilience during the initial phase of COVID-19. Now, as we enter this next phase, take off your rose-colored glasses, and be realistic about the scenarios that lie ahead and how your relevant core missions can endure.
Nanette Fridman, MPP, JD, is a strategist and coach for values-driven organizations and leaders. She is the President of Fridman Strategies, Inc., a consulting firm specializing in governance, fundraising, strategic planning, and leadership and team development. Nanette speaks nationally and is the author of On Board: What Current and Aspiring Board Members Must Know About Nonprofits & Board Service and Holding the Gavel: What Nonprofit Board Chairs Need to Know. She can be reached at [email protected]