What Nonprofits can do NOW

The job of a nonprofit executive is to ensure their agency will open tomorrow, or if it shouldn’t, to shut it down.

The list of things we don’t know and information we don’t have is long:

·         How long will this last?

·         How big of an economic hit will it be?

·         What will happen to the people we serve?

·         How can I protect my team and my agency?

·         How many of our donors will be impacted?

·         Will our foundations loosen the restrictions?

·         Will I get the Federal loan?

·         Will I have to lay off staff?

·         Will I get laid off myself?

·         Will I have to shut down this program that I love and have spent no small part of my life cultivating?

Then there’s the much more personal and terrifying:

·         Will I get sick?

·         Will someone I love?

·         How can I pay the mortgage without a job?

·         How can I protect my family?

We are all scared and varying degrees of angry, anxious, grateful, bored and terrified and, sometimes, how we feel changes by the minute.

Moreover, for those of us who have spent our lives in the field, sitting at home doing nothing makes us feel helpless. 

We are not helpless.  We are trained professionals.  Let’s get to work!

We are at an unprecedented point in leadership. Every decision we make will determine what happens tomorrow, even as we are aware that we are all making those decisions with limited information while standing on constantly shifting sand.

Many agencies are looking at cuts. “Leaders should start developing models and anticipate what levels of revenue drops may occur … even “as substantial variances are likely based upon the type of” organizations, relationship with state legislature, and historical financial models.” (The Great Recession Was Bad…)

Where to start? As always, you start with your values, your mission and your commitment to intentional aligned leadership.

I recommend the Board of Directors:

• Set the priorities for 2020 and 2021
• Determine the level of saving that needs to be realized
• Approve the cessation of services that will no longer be offered
• Determine how long you will continue to pay staff
  • for work that can’t billed
  • for services that can’t be offered
  • who may not be able to work
• Set severance levels

The CEO:

• Review your policies including sick time, family leave, and severance
• Review your insurance, including short and long term disability
• Make recommendations to the Board for policy revision, as necessary
• Reach out to every funder and ask for special circumstances
• Review and apply for forgivable loans
• Plan out interim leadership for every critical role, including yours
• Cheerlead
• Sell the story

The finance team:

• Clarify the staff that can do billable work (identified as work that will still generate revenue)
• Identify staff that might have to be furloughed based on work that is unable to be done
• Assess income that is unable to be realized

The development department:

• get clarity around if the money that they’ve projected for this year is actually going to come in
• Clarify if any money that has been pledged is available for operating or if it is restricted to other expenses
• Consider asking if any and all restricted gifts can be used for operating
• Consider asking all capital donors if you can use their gifts for general operating this year, as possible
• Prepare an emergency funding campaign that clearly tells the story and the need for additional support
• Prepare on-going communication with donors

Once the above is completed, I recommend:

The Board approve a staged step down, as necessary:

1. easy expense reductions that can happen now
2. reductions in the next round based on the priorities and the savings needed
3. Worst case cuts to keep the organization solvent

Other points of note:

• Pay cuts require a Board vote, even “voluntary” ones. 
• The CEO should not forgo their own paycheck or lend money to the agency. You can, of course, donate back a portion of your paycheck. If you do, make sure it is your choice, aligned with your family’s circumstances, and follows your donor acknowledgement procedures. Three More Things to Stop Doing
• If necessarily, individual Board members can lend money to the agency, with an appropriate paper trail.  If you do, I recommend paying yourself back not be your first order of business once the smoke clears.

That’s my list for today. Hopefully, you won’t need it. If you do, I wanted to get a framework out there in case it’s helpful. If you have a framework you’ve developed that you can share, please do. We will get through this, together. We will persevere!

As always, I welcome your insight, feedback and experience. Please offer your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.