Managing Money With Mission

Nonprofit Accountants Navigating the Unknown After the Pandemic

Nonprofits-coronavirusSince March, 87% of nonprofit organizations have experienced disruptions to their operations, according to the Center for Nonprofits. We have seen it with many of our nonprofit clients and have worked diligently with them to manage their funding issues and apply for assistance as offered through the CARES Act. Even with this extra support through the pandemic, more needs to be done to ensure local nonprofits and those throughout the country remain viable as they reopen and into the future. Now is the time for nonprofit directors and board members to re-evaluate fundraising efforts, operating reserves, and overall financial management processes. Numbers 4 Nonprofits is focused solely on supporting our clients’ missions in the work we do and we have a few ideas that can help charities push through into an uncertain future.

Re-Evaluate Nonprofit Reserve Funds

Across all industries, the pandemic exposed underlying issues and emphasized that many organizations are not prepared for a complete loss of revenue for more than a month or two. Nonprofit executive directors sometimes refer to quarterly fundraising events and past budgets to compare success in meeting their goals year to year. How was your “rainy day fund” prior to this completely unexpected event? Do you have 90 days of reserve funds? Do you think 3 months is enough or should you find ways to hold more in reserve? How high can you keep that reserve without the IRS looking into your exempt status?

The Numbers 4 Nonprofits team is constantly working with our clients and their boards to create best practices in managing their reserve fund. Make sure you are taking time to review your reserve fund, how much was used in the past few months, review past budgets year to year and notice trends in revenue. It is important in your planning to see how much you’ll need not IF something like this occurs again, but WHEN.

Your Talent and Your Nonprofit’s Mission

It’s very hard for those within an organization to recognize they have drifted away from their mission, but many nonprofits experience this at some point. Have you seen a revolving door of talent? Are you struggling to find workers who want to stick around and help fulfill your mission? Have you taken the time to look at WHY employees leave or WHY potential talent won’t come and work for you?

A 2019 report from Wipfli found recruitment/maintaining workforce topped 22% of nonprofits’ biggest challenges. It wasn’t just about “low pay”. In fact, many nonprofits directors report paying a little more for better talent does not always equate to retaining that employee. The biggest issue: mission disconnect. The culture within the organization is just as important as the paycheck. Turnover rates tend to reflect how the leader of the organization is delegating, teaching, helping, and motivating the staff while keeping an eye on the mission of the organization. As you head back into the office, look back at the past few months of remote work and how your staff worked together. If your organization never closed its doors, what did you do to keep staff together and how can that teambuilding progress as you move forward?

Changing How Nonprofits Handle Fundraising

We recently touched on the subject of fundraising during the pandemic. Some nonprofits created successful virtual fundraising events in the last few months as well as used email and mail campaigns to solicit donations. The bigger question moving forward is whether people will feel comfortable attending large, crowded events any time soon. While it is tricky answering this question today, you can still brainstorm ways to change your signature fundraising event for something people will feel comfortable taking part in. This isn’t to say you will never be able to have an event with people gathering and learning about the mission or new initiatives in person. We have learned that working from home and online conferences are doable and can be fun. More importantly, make sure you are reaching out to donors, possibly with an online survey, to determine their level of comfort and interest in a non-virtual event.

There’s a lot of work ahead for nonprofits as we begin reopening. We are here for our clients and can be here for new clients searching for help in unchartered waters.

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