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With rising costs , continued inflation and a possible recession , many individuals may soon cut their spending and , often , that means donors will decrease their charitable giving and sponsorships .
Meanwhile , nonprofits are operating with already tight budgets and increased service demands . How can you prepare so you ’ re positioned well if hard times come ?
1PLAN NOW : Identify possible threats and consider how your organization can best meet your mission when income may be cut . Identifying key programs and developing a business continuity plan can lessen the overwhelming impact if economic conditions affect operations . Prioritize missioncritical programs and create response strategies for different potential scenarios . Being proactive with a clear path to react will be essential for communication with staff , board members and public supporters . |
REMEMBER YOUR
RESERVES : Begin tightening your budget , paying down debt and shifting more to reserves . Reserves will put you in the best position to avoid making drastic service cuts when revenue streams slow or cease . If you haven ’ t already been working to build a reserve , make that a top priority now .
3 FOCUS ON EXISTING
DONORS : It takes more time , effort and money to acquire a new donor than to keep existing ones . Communicate how much you value and need their support . Identify those loyal donors who could increase giving during a downturn .
4 BE OPEN MINDED : Be flexible and open to different funding streams . Remember state and federal funds tend to stay consistent or even increase when community needs increase . Keep your focus on your community and mission and find creative ways to meet the unmet needs of the people you serve .
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With careful planning , it ’ s possible for nonprofits to advance their missions through an economic downturn . Making strategic operational and financial decisions today set your organization up well for the future .
5 BE TRANSPARENT : Let your board , your donors , your community and your contacts know that you ’ re monitoring the economy and that you ’ re strategically considering ways to stay on mission in the context of a recession . Your message should be different for each group , but remember that those who have invested in your organization or rely on your programs will want to stay in the loop .
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T H EE X P E R T Jeri Groce is a member in Warren Averett ’ s Audit Division and is a part of its Public Sector Industry Group and provides auditing , attestation and consulting services in the public sector industry .
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