As the COVID-19 crisis unfolds, both nonprofit bottom lines are impacted — mission and financial. Following a nonprofit sustainability plan is key to survival.
Nonprofit Sustainability Plan: Key to Survival
Both nonprofit bottom lines are impacted — mission and financial. With increasing expenses and revenue on hold, understanding your cash reserves becomes the basis for nonprofit sustainability and survival.
As many nonprofits look at their financial bottom line and decisions about what to do to survive, attention must be paid to revenue. Revisiting revenue streams and your strongest donor relationships can provide the best chances of securing funding.
Start with assessing your cash reserves ratio. Calculate how many months of savings your organization has if it operates at its current rate and receives no additional income. This equation gives leadership the insight to estimate how much time is left to keep the organization running.
Need May Outweigh Revenue
For many nonprofits, concerns may not be on sustainability but survivability — when need may outweigh revenue.
Your nonprofit sustainability plan must include the following:
- Understand your cash position
- Analyze additional revenue streams
- Analyze both bottom lines
- Keep lines of communication open with everyone
- Keep communicating the same message
Importance of Cash Reserves and Endowments
So, where do cash reserves and endowments come into play? Whether it is managing surplus cash, board-designated cash reserve or an endowment, manage them wisely. Having these funds available during a crisis is essential for survival.
Here are some questions you need to answer when it comes to reserves and endowments.
- What are the key long-term savings and earnings options?
- How and when should we tap our reserves?
- What are common misconceptions about holding an endowment?
- What organizations should probably stay clear of endowments; which would benefit?
- What makes for a strong investment policy?
- How do staff, board, and advisers partner effectively to manage nonprofit investments?
In addition to cash reserves and endowments, nonprofits can tap into other revenue. These are opportunities for relying less on donations and more on profitable strategies to achieve sustainability.
Ways to Stay Afloat During A Crisis
Below are some steps to follow for keeping your nonprofit afloat during difficult financial times and achieve mission goals:
- Strategic Financial Vision – Determine how much you need to provide each service. This gives you a view of which services will be most impacted by a shortage of funds and which services can continue to run.
- Diversifying Funding – It’s important to have several streams of funding rather than coming from once source.
- Identify Prime Assets – Think creatively and consider your resources. For example, you may have a board member who can connect you to a local vendor for a percentage of the proceeds for selling specific products. There are lots of possibilities in creating opportunities like this.
- Crisis Strategies – Be sure to show the impact of COVID-19 and/or a recession will have on your organization. Be authentic and consistent in your messaging.
- Pivot Fundraising Efforts – Focus hard on donor engagement and retention. Use intelligent prospecting techniques to recruit new followers and supporters. Broaden your reach while you retain your donors.
- Hold Virtual Events – Remind sponsors and attendees about the important contributed funds raised will have on the people you serve. Promote the benefits of a virtual event: no need to dress up, find a babysitter, drive to the venue, pay for parking or even make small talk.
Creative Fundraising Ideas To Encourage Donations
Rolling out creative fundraising ideas can keep your organization in the green during a pandemic crisis.
Here are some ways your organization can remain sustainable with virtual events that foster unity:
- Hold a virtual auction using Facebook Live to livestream the event.
- Launch a flash virtual fundraiser with your network to replace a real-world fundraiser. Leverage a matched gift to encourage additional donations and celebrate the spirit of generosity.
- Create sharable content showing highlights on social media as well as accompanying video and text.
- Share the love and appreciate your donors more often. Plan for the long term by discovering new ways to communicate and engage with your supporters.
Nonprofit sustainability depends on how quickly you analyze ways you need to change and grow, while fulfilling your mission. If you follow your plan, you will survive and come out better and stronger.
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