Yes, these are financially volatile times, but nonprofits must still deliver services, raise funds and fulfill their missions. Here are five ways to ensure your organization’s financial stability.
1. Basic money management is more essential than ever.
Raising money, whether for annual or capital campaigns, will be enhanced if you can demonstrate that the nonprofit is fiscally responsible. Don’t wait for someone to ask. Eliminate any questions by sharing with the prospective donor or funder a sound plan of financial management for the agency when you are making “the ask.”
*Tip – If you are reading this article because you liked the idea of five ways you could help your organization, write a sheet that lists five ways in which your organization has reduced costs or spending as well as five ways in which it has increased revenue during the past year and place it in the folder with your “leave behinds.”
2. Think about your organization as an outsider would.
Your donors are probably people who are familiar with your mission. They understand why your doors are open the hours they are open and why you provide the breadth of services that you offer. They get why you have made some of the harder choices. But what if that weren’t the case?
Look at your organization and re-examine everything – even the choices you know to be a part of your mission. There are many ways to achieve the same goals and sometimes it is better to stop mid-track and start anew than to keep doing the same things in the same way that you have always done them. This is no time for “business as usual.”
3. Don’t count your chickens before they hatch.
OK, there is no way for a nonprofit organization to completely eliminate all assumptions of future income. Zero-base budgeting is not realistic. In fact, in development, we plan a budget assuming some of last year’s donations will be renewed in the current year.. But, if the current market turmoil has taught you nothing else, your strategy for the upcoming year must include extremely conservative estimates.
We hope that donors don’t default on long-term pledges and that they can continue to offer annual gifts. But when you are creating an expense budget for the new year, consider what you could cut, or more importantly, what you would cut if you lost ten percent of the gifts you had counted upon. Hopefully, this contingency plan will never see the light of day. But in December when the chaos of the year-end combines with the stress of ”making the numbers” and you realize you might have a shortfall, you will be glad that you planned ahead.
4. Invest in your employees.
Everyone is scared of what the future will hold. Ensure your staff knows that you value them and their work. A simple note or meeting that lets them know your plans to ensure the future of the organization (e.g. the financial issues that are secure or are of concern, the contingency plan, the need for focus in certain areas, etc.) will go a long way toward ensuring their emotional security and, in turn, their productivity. Try to think of inexpensive ways to show your appreciation.
5. Look at the long-term plan.
It’s true that recently the stock market has been bouncing more than anyone could have predicted. But the market, over a longer period of time has remained on a steady trajectory. Now is the time to look at your long-term course. Determine what you would like your agency to look like. Review the past five, ten or twenty years of your organization’s history. What were your strengths and weaknesses, what were the contributing factors to your successes. Where do you want to be in the next five or ten years?
Even young organizations should look at their long-term plan once they have begun to achieve initial goals. You can’t predict the future but you can plan where you hope to be.
In economically challenging times, a return to the basics outlined above will enable you to confront the uncertainties and move forward with confidence and strength.