The onset of the coronavirus pandemic and its economic fallout are seriously disrupting operations at most U.S. nonprofits and stressing many of their stakeholders, including the neediest Americans.
At the Center for Nonprofit Strategy and Management, we believe that the worst threats of Covid-19 will last many months and that full recovery for charities will take at least five years.
Perhaps as many as one-quarter of nonprofit groups — mostly small and midsize — may fail.
We prepared this checklist to help you manage during these unprecedented circumstances; we suggest steps to take in key areas, such as assessing strengths and weaknesses, and strategies to adopt to help your organization survive and be sustainable. Many uncertainties remain, so you can’t know exactly what is right, but you must act with agility and make decisions decisively.
Organizational Strategy
1. The principal challenge in this period is to keep your organization alive, resilient, and functioning, so consider all options, including reduced levels of activities, a different mix of programs, and new means of service delivery.
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2. Review your organization’s stated mission and vision. Modify them, at least in the short term, as necessary. For example, regarding your mission, might your principal clients or geographic area of service shift?
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3. If you have a strategic plan, it will need to be tailored or even put on hold. Consider sketching out a one-year action plan, subject to revision. A crisis presents challenges but also opportunities for change, innovation, and creativity.
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4. Create a vision of where you see your organization in one year. Do this in a participative way, at least with the top management team and board. Articulate this vision so that all stakeholders know where you are going.
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5. Augment your top management team to make it into a crisis-management team, but do not let it get too large. Examples: The IT head and human-resources director have become more important. The team needs greater diversity and inclusiveness. Include young staff members who always seem to have good ideas.
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Program and Service Delivery
6. As much as possible, continue to provide existing services but in new, safe ways. For example, food pantries might shift from a single location for shopping to home delivery.
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7. Deliver existing and new services in innovative ways.
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8. Trim programs that are not essential to the organization’s mission (or restated mission), have not been effective, or lack sufficient demand at this time.
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9. To increase program effectiveness in this period, collaborate with other organizations across the nonprofit, government, and business sectors, and transfer some programs to other organizations.
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10. Stop creating programs, unless they are essential for your nonprofit in this new environment.
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Managing Fiscal Stress
11. Secure your organization’s financial position. Attempt to improve cash flow, obtain a line of credit from a bank, borrow money, reduce or delay purchasing, renegotiate leases or other obligations, and tap operating reserves (sinking funds). Note you need not use the line of credit; it is an emergency reserve and can be used when needed.
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12. Matching mission and money in this period is especially difficult. Contain costs; review every item in your budget to consider what can be cut or reduced.
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13. Regarding paid staff, consider hiring freezes, staff attrition, early-retirement plans, short-term job sharing, reduced compensation, furloughs, and layoffs. If your nonprofit furloughs staff members, remember they can collect unemployment.
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14. When making budget cuts, consider making reductions in specific areas rather than across the board, then use some of this money to support the remainder of the organization. Try to get to a relatively stable new normal.
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Raising Revenues
15. Stewardship has rarely been more important. Reach out and talk to major donors.
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16. Diversify revenue streams by seeking new sources of funding that will be available because of the pandemic. Keep an eye out for rapid-response funding efforts by foundations, United Ways, and others during this crisis, and apply as appropriate.
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17. Step up fundraising to respond to this crisis (recognizing that economic and market decline and uncertainty will concern most donors/members/subscribers). Listen to donors; let their feedback guide you as to when to restart the solicitation of both big and small gifts.
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18. Advocate before public officials to restore aid, provide new types of funding, or both.
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19. Talk to foundation program officers, both those who have supported you and those who might. Seek to loosen restrictions on current grants to deal with this crisis.
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Crisis Communications
20. Communication has never been more important. To begin with, leaders must show they understand staff concerns and demonstrate genuine empathy toward staff. Have your crisis-management team meet daily. Have an all-staff meeting weekly.
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21. Reach out regularly to the board chair, executive committee, and other relevant board committees, and all board members to keep them informed and to secure their ideas and reactions. This includes advisory boards and junior boards. Good governance is still important.
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22. All the important decisions in this crisis will be seen by an organization’s many stakeholders, external and internal. Leaders must communicate and listen to grant makers, major donors, government officials, board members, paid staff, volunteers, clients, and others whose support is essential for the short-term and long-term health of the organization. Communicate regularly with stakeholders. Be genuine and honest.
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23. Keep your organization in front of your stakeholders, and protect your brand. For closed arts organizations, this could mean a virtual tour or streaming past performances online. For human-services groups, this might mean video showing what services you are still actively providing, even if in different service-delivery modes.
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Managing Operations
24. Learning to work remotely is new for most nonprofit leaders. Select a technology tool, and use it widely. Video teleconferencing will help maintain or even build a sense of community in your organization. Learn how to run virtual meetings.
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25. This crisis is fraught with emotion. Make sure staff members know that you care about them and that they are valued. Work at motivating your team and promoting peak performance, even if everyone is working remotely. You cannot lead through this crisis alone; distribute work to get things done. Make sure to retain talented, key staff.
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26. Self-care is important as so many work from home. Daily exercise, fresh air, healthy eating, entertainment breaks, and enough sleep need to take place. While these times can be all consuming and foster attention 24/7, downtime is important to good mental health.
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27. In New York City, we learned from 9/11 and superstorm Sandy that a formal business continuity and disaster-recovery plan can be very important. If you do not have one, start with a template from another organization, like Nonprofit New York.
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Frederick S. Lane (fredlane365@gmail.com) is professor emeritus and faculty fellow, Center for Nonprofit Strategy and Management, Marxe School of Public and International Affairs, Baruch College, City University of New York. The author acknowledges the contributions of faculty members Cristina Balboa, John Casey, Susan Chambre, Michael Feller, Jack Krauskopf, Don Waisanen, and Lynn Weikart.
