Status of Nonprofit Finance & Planning This Summer
When I saw the headline in the Chronicle of Philanthropy— “Research Projects that 22,000 (7%) of Nonprofits Will Fail Due to Coronavirus” — I immediately thought of the organizations I am currently studying. From the 34 nonprofit executive leaders I’ve interviewed, I learned that they are finding the unknown variable – the duration of the COVID-19 pandemic – one of the most difficult aspects of living in our times. On one way or another, each of these leaders are asking: “How do we successfully plan without knowing the pandemic's timeline?"
To offer a very brief response to the concerns raised by this recent research, multiple scenario planning is one key path to navigate our current economic circumstances. Nonprofit leaders need to incorporate or maintain two constants into their planning mix: ongoing fundraising and regular constituency relations.
Research from The Great Recession of 2008 and the years that followed demonstrates that ongoing communication with stakeholders, coupled with continued fundraising, can help mitigate the loss of nonprofit income while strengthening and bolstering long-term relationships. Don't lose sight of these constants.
I think the ultimate duration of Covid-related economic challenges, coupled with the length of the recovery period, will be a leading factor in determinng how many organizations are forced to fold, merge, or downsize their programs and services. We don’t know what the future holds for the nonprofit sector, but we can strategize and make informed decisions, guided by what has worked in the past.