Nonprofit Leaders Navigating Difficult Waters

July 15, 2020

The world is forever changed. This is especially true for nonprofit organizations. The need is great, funding is uncertain and managing from afar is challenging. No one needs to be reminded of all the bad…we already know that part of the story.

As nonprofit board members, executives, CFO’s, Controllers, leaders, and professionals … how are we going to set the course to ensure the values and missions of the organizations and communities we serve will thrive?

As leaders, we have two choices: panic or persevere.  We choose to persevere!

This is the time of year when many nonprofits are beginning new fiscal years or adjusting mid-year projections and operations to reflect the turbulent economic and social conditions. The uncertainty created by crisis creates an immediate call to action. It also creates urgency for the organization to focus on both its mission and how to continue to deliver impact to the community it serves.

There are three distinct phases of response during a crisis:

 

 

 

1. PROTECT
Address the immediate challenges to safeguard the organization’s people, mission, and operations.

Did your organization have a plan? Did it work? Or, was it left on the shelf when crisis hit? These are all critical questions to review. The shift of the organization’s workforce to remote presented significant challenges for most nonprofits. Overnight, many organizations moved to a digital world leaving behind the shuffle of paper.  Key factors to a successful transition in crisis mode include:

  • Safety and care of the workforce and community
  • Essential business processes identified and properly assigned
  • Deployment of technology such as a comprehensive cloud ERP solution
  • Access to data via a nonprofit-specific accounting software solution
  • Communication plan that keeps all stakeholders informed: constituents, communities, board, management, and workforce

This is a time for action and focus on priorities. Whether the crisis is the result of financial disruption, weather or a pandemic, the way an organization addresses the immediate challenges will make a difference in its ability to adapt in the days ahead.

2. ENDURE
Identify short term operational requirements and immediate objectives.

Is your organization resilient and able to adapt to significant challenges?

A financial leader needs to look past the transactions and can interpret the data based on historical experience, long term strategy and period-to-period budgeting. The culmination of long- and short-term views will help to guide the leader and organization.

Forecasting, financial analysis and budgeting play a critical role in determining the nonprofit’s resiliency. Now is the time to focus on reliable revenue streams, identify non-essential expenses and allocate resources to mission critical activities. This is difficult work. Maintaining access to timely, reliable data will result in sound, data-based decision making.

Investments made to the organization’s infrastructure and processes determine the capacity of a nonprofit to maintain and serve its mission and community. Systems and processes should be modern, robust, and agile for nonprofits to sustain during difficult times.

Board members can serve as a resource for critical thinking on key strategies while management is focused on ensuring that operations continue, supporters are informed, and the mission is preserved. Boards should be engaged, intentional and working to ensure equity remains at the center of decision making.

Identify statutory and audit risks. Communicate with the organization’s auditors and professionals regarding current operating conditions and challenges. Evaluate compliance risks across all grants and revenue contracts.

Evaluate partnerships. Make sure the organization has the skill sets needed to address concerns and issues appropriately. Communicate regularly with grantors and key donors to reduce unanticipated changes or further revenue disruption.

Take care of each other and yourself. Rowing the boat is hard work!

3. REIMAGINE
Define what the organization is going to be after the crisis. It will be different.

This is the time to focus on the organization’s mission and impact. Reimagining an organization during a time of crisis can provide the urgency needed to force real change. Every nonprofit exists to benefit a shared purpose or community. Reimagining requires the leader to look beyond the immediate crisis to position the organization to deliver future impact.

The organization’s stakeholders should be included during this phase. Engaging members of the community who are directly or indirectly impacted by the organization will build a foundation for inclusion and resilience. This foundation will serve the organization well as it moves forward in delivering meaningful, genuine impact to the community it serves.

The financial implications and impairment on the organization resulting from the crisis are factors in reimagining the organization. Aligning the delivery of the mission to the financial realities is paramount. Identifying revenue strategies and partnerships to sustain and rebuild are also key to reimagining the organization. Data driven decision making is required to ensure long term sustainability of the organization. Leveraging the organization’s infrastructure, including cloud-based fund accounting software and grant management software will be necessary to support this level of analysis.

Opportunities that specifically fit the strengths of the organization could be created because of the crisis. Identifying these opportunities may provide new ways to deliver impact and offer security to the organization. They may not always be obvious but can often be the lifeline that is needed.

As social change erupted, Serenic Software, worked with a nonprofit who was asked to distribute aid to those most impacted by the instability created by the crisis. This organization saw this as a game changer, a real leadership opportunity to fill a void and meet the needs of the community. They leveraged their infrastructure, including Serenic Navigator, and broadened their capacity to quickly rise to the challenge. Over $50 million in funds were efficiently distributed providing for housing and the immediate needs of families and children.

How are you navigating your organization? Are you panicking or are you persevering? Will you seize this opportunity to lead in a way that will result in a resilient organization that is agile and able to weather any storm?

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