During times of crisis, it helps to have access to Best Practices and objective input from industry professionals and practitioners. The Global Center for Nonprofit Excellence has assembled a team of nonprofit experts to provide the following recommendations.
I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.
Take Immediate Action
Forecast Revenue & Expenditures
- Create three to five reduced revenue scenarios and determine a plan to continue or at least survive with each one.
- Examine all upcoming expenditures and reduce or eliminate everything possible without compromising essential activities, relationships or commitments. But . . .
- Avoid short-term cuts that might have long-term negative impact unless cash flow mandates it. (i.e. eliminating a position you’ll have to reinstate or paying termination fees for something you’ll just restart right away.)
- If cash flow permits take advantage of significant discounts vendors offer for early payments on purchases you’ll need later.
Maximize and Protect Cash Reserves
- Consolidate financial assets.
- Accelerate collections of debts and receivables as much as possible. Consider offering discounts for early payments.
- Sell surplus assets only if not a part of a strategic plan and you can get a reasonable price.
Apply for CARES Act Benefits
- Delay of Payroll Tax Remittance
- Paycheck Protection Program (PPP) OR Employee Retention Credit (SSI Tax Credit)
- Economic Injury Disaster Loan (EIDL)
- Emergency Economic Injury $10,000 Grant
Enhance Relationships and Develop Synergies
- Identify key/critical stakeholders (donors, partners, beneficiaries, board, staff), secure these relationships through increased communication and transparency, and consider ways for all stakeholders to be more effectively and efficiently involved.
- Discuss possible joint ventures, shared services or even mergers with similar/compatible organizations.
What to Avoid
- If you take the above actions immediately, you should be ok.
Renewing or Initiating Short or Long-Term Contracts/Commitments
- Unless absolutely essential to your survival, wait to enter into any kind of commitments until you are confident that they are/will be relevant and fruitful and that you’ll be able to perform.
Starting New Programs
- Unless the programs are a direct and strategic response to COVID 19 and you have a known source of funding for them, postpone or cancel them until you have better visibility of what lies ahead.
Every organization should consider developing several contingency plans. What would we do in these scenarios?
- 1. Minimal revenue reduction.
- 2. Significant revenue reduction.
- 3. Catastrophic revenue reduction.
How are your programs, staff, and structure impacted in each?
If you need help, or want to discuss, any of the above, please contact The Global Center for Nonprofit Excellence Co-Founder, Robert Lipps, CPA and Attorney for a private conversation.
Disclaimer: The contents of this article does not constitute advice and should not be relied upon in making or refraining from making, any decision. Independent research is recommended.
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