Social distancing. Limits on group gatherings. Fundraising event cancellations. Programs curtailed. Venue closures. Working from home – or not working at all.
The coronavirus has hit the nonprofit community, and the impact will be huge. It’s likely that program income will decrease, and fundraising income as well. You may have to lay off staff. Many venues, especially those that present public events and programs, have been forced to close. Others that provide basic services and food to the homeless and low-income folks have been slammed, while volunteers are scarce and employees are staying home.
Here are some specific areas of concern:
- Stock market decline and recession: At a time when charitable needs will soar, wealthy donors and foundations will suffer losses and cut back on giving. And foundations are legally required to give away 5% of assets a year; that amount will plummet along with the value of their investments.
- Charitable donations: As happened in the last recession, all charitable donations will probably decline. Note that in 2008, giving plunged by 5.7%, the steepest decline since Giving USA began its survey in 1956.
- Venue closures: Arts organizations that depend on income from participants at ongoing exhibits and performances will be especially impacted. As well, folks are less likely to prioritize donations for the arts during an emergency situation.
- Fundraising events: Galas and fundraising events for many nonprofits that take months to plan have been cancelled.
In the midst of this crisis, here are some things you should be doing, and some issues you should be addressing:
- Capital reserves: I am hoping you have exercised prudent management and have a reserve fund with enough money to cover six months of operating expenses. If you do: kudos - and now is the time to use it. But I’m betting many of you don’t. Perhaps you had one for a while, after the 2008 recession, and then your board and leadership let it slide, or used the funds for new programs. Here I’d like to quote one of my father’s favorites: “Experience is when you make the same mistake a second time and recognize it.”
- Paid sick leave: I am also hoping your organization has in place paid sick leave for your employees - and that your workers are actually employees, rather than independent contractors, so they are covered. So many small nonprofits I see are focused on saving money at the expense of treating folks in a humane way. If you're one of them, now is the time for change.
- Remote work capacity: You should assume crises like these will happen again, figure out an emergency plan for your staff to work remotely, and train them in how to do so on a yearly basis.
- Increased demand for services: If your agency serves low-income folks and provides for basic needs (food, shelter, medical assistance), you’re going to be slammed because so many folks will need assistance. You should immediately be in touch with your local and state government representatives to find out what kind of help they can provide you.
- Communication: Stay in touch regularly and honestly with your clients, members, foundation contacts, local government officials, and donors (small and large). Don’t sugarcoat. Ask them for help.
- Fundraising: And keep asking them for money, with thoughtful and appropriate messaging – via email, phone calls, mail, your website, Facebook, and whatever social media you use.
This too shall pass. Keep breathing. Shelter in place. Cherish your friends and family. Take care, and stay healthy.
