Keys to Nonprofit Success in Complex Times

Nonprofits are invaluable as they support communities who will suffer due to the combined impact of illness and economic repercussion caused by the virus and current economic volatility. This presents significant and unique challenges for the entire sector.

Social distancing¹ may prevent the rapid spread of this coronavirus and compel nonprofits to temporarily shut down or curtail their revenue-generating activities. Safety net organizations must balance the likely increase in demand for their services with the potential drop in fundraising. All nonprofits need to plan for the possible impact of market volatility on overall organizational health.

As the situation rapidly evolves, nonprofit leaders must focus on aiding their constituents, protecting their employees and operating in a financially sustainable manner. They need to act with urgency, but also with thoughtfulness.

Below are suggestions to help address the key areas of operations, communications, fundraising, finances, and leadership, with tactical steps to alleviate pressure and support more stable practices.

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Operations and Communications

Each nonprofit will face operational challenges depending on a variety of factors, including its service model, staff composition and geographic location. In addition to thinking through operational contingencies, leaders should also identify effective ways to disseminate accurate information to staff, board, donors and populations served by the organization.² Best practices for operations and communications in a time of uncertainty include:

Communicate to staff your concern for them and inform them about best health practices.
Consider and implement operational contingencies such as work-from-home, split operations and shifts if feasible.
Find and leverage free/low-cost technology platforms for remote access or virtual meetings.
Review key contracts to understand your risks, rights and obligations.
Make a checklist of key stakeholders, then communicate how important they are to you, how their well-being is top of mind, and the preparations you’re making.
Understand how your organization’s programs might respond to reduced staff scenarios, quarantines or other operationally disruptive situations.
Find adjacent allies in the community and/or within the government and communicate your constituents’ evolving needs.
Strive to be clear about the communities you reach out to and the languages in which you speak, in order to understand where gaps might exist.³
Be present on social media with a clear, aligned message.

Fundraising

Nonprofit organizations will need to think creatively about ways to fill revenue gaps to sustain their current operating models and also to respond to new needs. The Bank of America Study of High Net Worth Philanthropy⁴ (the “Study”) suggests that affluent donors in particular may be willing to give more during unexpected challenges. Charitable giving in connection with natural disasters may help us to predict donor response to the coronavirus, as both are unexpected, high-impact events that are broadly publicized in the media. The Study provides encouraging insights: upwards of 46% of all high net worth donors contributed to support recent disaster relief efforts and 94% of those donors maintained or increased their support to other causes. Following are a few fundraising strategies to consider in these difficult times:

Reach out to all donors to express concern for their well-being and share how your organization is impacted by and responding to the current situation.⁵
Analyze short- and long-term funding needs for the organization that can be addressed by fundraising and build a compelling, donor-centric case to support these needs.
Assign a senior leader to speak with each major donor to express appreciation for their past generosity and listen for cues about their willingness to provide additional support during this time (including prepaying existing pledges), keeping in mind how market volatility might influence their actual or perceived capacity to give now.
Crowd-funding and online fundraising campaigns can be effective. Consider leveraging technology to fill the gap from postponed or canceled in-person events, galas and walks. Here are a few examples:
- Create a virtual conference, charge per workshop view and increase marketing efforts to expand beyond the people who might have traditionally attended an in-person event.
- Use peer-to-peer fundraising in social media channels. With many donors working from home and using cellphones, deploy text-to-give offers. Building a campaign online now could yield higher results in the future.
- Silent online auctions can also be highly effective and bring elements from a gala to the forefront of your donors’ minds.
Organizations that rely on ticket sales can encourage supporters to consider it a donation to the organization instead of asking for a refund.
As always, thank all of your donors for their generosity.

Finances

In times of volatility, your board, CEO and investment committee should review your organization’s spending policy and endowment management practices and carefully consider its full financial position.

Understand and model different potential financial and programmatic scenarios for your organization. Ask for ideas from the board, key finance team and development staff.
Determine where there is flexibility in your current spending policy.
Have your organization’s board or investment committee meet with the financial and (if appropriate) fundraising staff to determine where additional sources of liquidity might be found.
Consider options for emergency cash flow including board-designated funds and/or lines of credit.

Leadership

A strong board can make all the difference to the survival of a nonprofit – especially in times like these.

Board leaders should consider making a “resilience gift,” if feasible, to set an example and encourage other donors.⁶
Your board should stay connected to the evolving needs of the organization.
Board chairs and executive committees should step up communication with and support for the organization’s CEO, for example with contingency planning, while maintaining timely communication with the full board.
Board and professional leaders should review the organization’s financial situation and tools available to support the staff, such as leveraging board-designated funds, reducing expenses and communicating with donors.

If your organization is in a position to help, you may see an increase in demand even while experiencing operational disruption and a drop in fundraising. Focus on what you can do right now with the resources you have.

It’s critical to keep everyone informed. You may need to use different formats and languages to speak to diverse constituents, including staff, board, donors and the population served by your organization.

Meetings, conferences and fundraising events can be held remotely with free or low-cost technology platforms — and can even allow you to expand the guest list beyond people who might have attended in-person events.

Be prepared to adjust expenses, your fundraising model, and where you direct your efforts — and keep in mind that as you weather the crisis, your organizations’ needs will continue to evolve and change.

Times of uncertainty are unnerving, but organizations that have existing plans in place will be better able to weather them. Nimbleness is important, but it is equally important to act in a measured, thoughtful way. Making extreme changes to organizational structure, your endowment model or your staffing can result in potentially unnecessary or unintended future consequences. Organizations that are caught off-guard by a disruption can take immediate steps to adjust, reduce expenses, leverage partnerships and continue fundraising efforts. Thinking carefully and leveraging your board and financial advisor’s expertise can provide continuity in a complex time.

Contact your advisor to learn more.

¹Centers for Disease Control and Prevention. “Interim US Guidance for Risk Assessment and Public Health Management of Persons with Potential Coronavirus Disease 2019 (COVID-19) Exposures: Geographic Risk and Contacts of Laboratory-confirmed Cases.” Published March 7, 2020, page retrieved March 13, 2020.

² Fleming Glennon, Margie. “Responding to the Coronavirus Outbreak: Resources to Help Nonprofits.” Published March 12, 2020, page retrieved March 14, 2020.

³ Gibson, Sara. “Coronavirus Advice for Nonprofit Leaders.” Published March 9, 2020, page retrieved March 13, 2020.

⁴ 2018 Bank of America® Study of High Net Worth Philanthropy

⁵ Streiff, Justin. “Coronavirus and fundraising: don’t change anything.” Published March 11, 2020, page retrieved March 13, 2020.

⁶ Gibson, Sara. “Coronavirus Advice for Nonprofit Leaders.” Published March 9, 2020, page retrieved March 13, 2020.

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