We live in uncertain times, with constant social, political, and economic shifts. During the American War of Independence Lord Cornwallis surrendered to George Washington at Yorktown while the British band played the tune “the world turned upside down”. The most powerful army in the world had just been defeated by the American patriots. It must have indeed seemed like the world was upside down.
Today, nonprofit leaders may feel similarly challenged, as the funding and practices they have counted on in the past may no longer be available in the same ways. Whether you work in a nonprofit or volunteer as a board member, navigating uncertainty is part of the job description. Strategic management of resources is key to managing these uncertainties and ensuring your organization’s ability to fulfill its mission.
These are just some of the questions facing your staff and board:
- Will government funding come through?
- Can we pay our staff next week?
- Will we be able to continue this program?
- How do changing interest rates impact our loans or our ability to even get credit?
Best Practices for Stability
Finding stability in the midst of uncertainty requires consistent actions that strengthen your financial position while connecting you more closely with funders.
- Stay informed: Connect with your national office (if you have one) or trusted sources such as AFP or your state’s nonprofit association and avoid misinformation.
- Follow experts: Trust sources like The Wall Street Journal, Bloomberg and the Nonprofit Times.
- Monitor trends: Track interest rates, GDP, and oil prices. (Why oil prices? When they go up, the cost of gas and food go up, causing consumer behaviors to change.)
- Understand your funding sources: Determine if your grants come from state or federal budgets. Review the terms of grants from any public sources whether local, state or federal.
- Engage policymakers: Keep in touch with government representatives. Share stories of impact and the needs you are addressing
- Always have a Plan B: Prepare for financial fluctuations.
Building a Strong Plan B
What can you do to secure resources for your nonprofit when funding sources are rapidly changing?
- Secure a credit line: Even if unused, it provides security.
- Stay on top of reimbursements: Submit requests promptly.
- Continue fundraising: Surplus funds can bridge gaps and help you meet unanticipated cost fluctuations.
- Build reserves: Conserve spending and save.
- Optimize assets: Close underperforming programs and sell unused assets.
- Maximize efficiency: Ensure funds earn interest and monitor cash flow.
- Communicate impact: Keep your community – especially your donors – connected and supportive.
Economic change is inevitable, but with strategic financial planning and good donor stewardship, your organization can remain sustainable and resilient, continuing to fulfill your mission even in a world that may seem like it’s upside down.
If our team can be of help to you, please don’t hesitate to reach out for a free one-hour conversation with one of our team members.
While your current situation may be unique, economic instability happens regularly. You may find these additional resources helpful: