Over the last several weeks, we have discussed different elements of nonprofit budgets. Our goal is to build capacity because we often receive questions that speak to the need for a broader understanding.
Last week, we looked at cash flow and forecasting. Today we turn our attention to the stock market.
And, what a day. An automatic halt was triggered at the opening of trading this morning, which is the second time this week. The last time the automatic halt happened was 1997.
The market has plunged so precipitously that the only words to describe these unprecedented events are fear, uncertainty, risk, crisis, and shock.
While the response of investors may be panic, the reaction of nonprofit leaders must be to remain calm. Given the situation it may be easier said than done, but we know that communities will need the nonprofit sector now more than ever. The leadership stance of the sector will be essential as we navigate these unchartered waters together.
The health sector is in overdrive — from hospitals to community clinics to research labs. The capacity of the sector is needed and so is their innovation. The Cleveland Clinic announced a new rapid test for coronavirus that will certainly save lives.
The economic pressures, especially in the travel and hospitality industries, may lead to lay-offs that results in more people who need food pantries and job assistance. The potential for job losses may re-new the housing crisis of a decade ago with bankruptcies, foreclosures, and resulting homelessness, which puts pressure on the social service safety net.
Nonprofits not yet feeling the increased demand for services have economic losses to manage with the cancelation of galas, programs, and other events.
The Chronicle of Philanthropy published a special report this week with resources to help nonprofits with fundraising in a crisis, cancelling events, and managing finances. Their article on shoring up cash reserves is a must-read.
Our colleagues at Nonprofit Quarterly have an article on the unexpected cost of COVID-19 and are seeking suggestions from the field for managing cancellations. They are also assessing the nonprofits who serve vulnerable populations and cannot cancel, like nursing homes, homeless shelters, and the aforementioned hospital systems.
Now is the time to gather your organization’s leaders to assess impact among your human capital.
- The operations team must keep facilities clean and implement any contingency plans in order to ensure the safe management of people and property.
- The program team must determine how to support the people you serve once communities move beyond social distancing into quarantine.
- The communications team must implement crisis communications plans (or create them if they do not already exist), have statements prepared for the media and various constituencies, keep audiences informed via social media, and have clear instructions on who in the organization is allowed to communicate messages.
- The IT team must ensure that everyone has the technology and resources needed for work-from-home and virtual meetings that may last a month or more.
- The finance team should be evaluating its cash reserves and investments to mitigate any future losses given the market’s volatility, and to assess losses caused by cancellations.
- The fundraising team must remain in communication with donors, continue to submit requests based on the funder’s direction, but hold briefly on broad appeals and events until a clearer picture unfolds.
- The executive team must stay in constant contact with public health officials, community leaders, major donors, and the organization’s primary stakeholders to ensure fulfillment of mission does not waver.
Article by: Kerri Laubenthal Mollard, Founder & CEO