How Not-for-Profits Can Survive the Impacts of COVID-19

Most not-for-profit organizations operate with confined budgets and limited resources, which creates unique challenges in the business world. Some even struggle to fulfill their mission because they lack funding and manpower. This was before COVID-19.

The pandemic has compounded these challenges, cutting off revenue streams and drastically reducing staff and volunteer contributions due to social distancing. Fundraising events have been cancelled. Operations have shut down. Donations have declined significantly. Grant opportunities have decreased. And while revenue streams dried up, expenses did not. In fact, they increased for many sectors. Not-for-profit leaders are afraid conditions will never return to a pre-pandemic state. Others hope government and philanthropists will offer extra support.

The current economic environment begs the question: How will not-for-profits survive the pandemic?

How to Accelerate Out of the Pandemic

Not-for-profits that can sustain themselves through these unprecedented times must begin preparing to accelerate during recovery. Shift the focus from crisis to growth. This transition will be different for every not-for-profit, and depends largely on the community served as well as relative strengths and the organization’s identity.

“While COVID-19 certainly has affected how we do business, it hasn’t stopped NCPPC from providing services to the tri-county community,” said Tina M. Cobb, Executive Director of North Country Prenatal Perinatal Council, Inc. “In mid-March we began to work virtually from home, continuing to provide parenting classes, virtual home visits, insurance enrollments, and education. We continued to provide families in distress with drop-offs of basic needs, education, and family activities.”

Expect Setbacks and Cutbacks

It’s going to be a long haul back to normal. Understanding not every strategy will be successful can help cushion the blow when failure occurs. Success or failure, it is progress. You are learning what works in a post-pandemic world.

“LCOI has been impacted much the same as others through the initial NYS Pause Order, subsequent movement through Phases I-IV, and what seems like constantly changing mandates,” said Scott Mathys, Chief Executive Officer of Lewis County Opportunities. “It has kept us on our toes and has been a period of stress and anxiety.”

Identify what is instrumental for your growth. This includes team members, partnerships, services, memberships and more. If you are considering cutbacks, weigh the impact each one will have on your ability to grow as the pandemic subsides. Scaling back rather than cutting something is another alternative. Maybe there is a way to scale something back in the short term and then ramp it back up down the road.

“Fortunately, we have remained fully staffed without needing to lay off or furlough our workforce, which is good since the demand for our essential services increased in numerous areas,” Mathys continued. “The agency realigned priorities, revised our Strategic Plan to incorporate a ‘COVID Addendum’, and actually brought in a number of new pandemic-response grants to aid our community.”

Back to the Basics

How did your organization first launch? Identify what made your organization successful at the beginning and then engage the community that has supported you. With a dedicated community by their side, not-for-profits are best positioned to succeed with a transition out of crisis mode. This will always prove to be a competitive advantage, but it’s especially advantageous during the fallout from COVID-19.

“Our mission to working with people in need to promote a higher quality of life in our community is as relevant today as it was when we began here in Lewis County back in 1965,” Mathys said.

Stay in Touch with Supporters

Encourage the connection between them and your mission. Make sure your focus is on them while dealing with the uncertainty of today. Remind them why they love and support the organizations’ work by sharing stories highlighting the differences made during the pandemic. The communities’ concern for your mission has not diminished just because of the pandemic. They are also facing the pandemic and could use uplifting stories. There is no reason to avoid reaching out to people even though they may have less disposable income right now.

Identify Post-Pandemic Needs for Your Target Audiences

Most not-for-profits have a core target audience. The better you know yours, the more likely you are to pull the right growth levers coming out of this crisis.

“We opened a brand new Neighborhood Center in Lowville to allow people greater access to our services,” Mathys said of Lewis County Opportunities. “We have maintained victim services in a time when isolation, abuse, and depression have increased. We were able to continue providing housing assistance to keep people sheltered.”

Here are some questions to consider when evaluating your target audience:

  • How are they being impacted by the pandemic?
  • What challenges are they going to face coming out of this crisis?
  • Which challenges can your not-for-profit help with?

Try to focus on what you can offer them that others cannot. This will help you stand out from the others. It’s your best opportunity to maximize the value you can provide to the community.

Start with Small Goals

It’s going to be a long road to recovery for most not-for-profits. To prevent burnout and becoming overwhelmed, develop a plan for small victories. This will help keep leadership and staff motivated, and focused on moving forward.

Collaborate with Others

You’re not the only one going through this difficult time. Talking with other not-for-profit stakeholders can help generate new (and old) ideas.

“None of our services and efforts occurred in a vacuum,” Mathys said. “Many other human service providers have been linking up to help vulnerable people through a myriad of capacities. We are blessed by our committed staff and volunteers, our partner agencies, and certainly our funding sources despite the scarce resources and their often frustrating hurdles.”

Look into New Revenue Opportunities

Evaluate your revenue sources individually and how they have been impacted during the pandemic. What has sustained revenue and how can you enhance it? Double down on what is working while adapting to the current environment. It is not the time to abandon everything that has historically worked in generating funds. There is a reason it has worked in the past and most likely will work during this pandemic with the right twist.

Seeking new opportunities to generate revenue can also help get your organization ahead of the game. Many fundraising events have been put on hold for the time being. When the pandemic subsides, many organizations will want to reschedule these events. This could cause an abundance of events all at once. Look into different ways to fundraise virtually for the time being and possibly in the future.

Believe

It is important that you believe your organization can transition from crisis to growth. Remember that your organization survived the pandemic. Your team obviously has stamina. Now it’s time to believe in your team, and focus on the future of your organization.

“There are many questions still left unanswered. But ultimately we want to look at the cup we’ve been dealt as half full and remain optimistic,” Mathys said.

Bowers & Company CPAs aims to offer helpful information to our clients and friends. Learn more about how we can help should your not-for-profit organization need accounting and financial services.

Disclaimer: To ensure compliance with requirements imposed by the Department of Treasury, we inform you any U.S. federal tax advice contained in this document or video is not intended for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.

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B&C Not-For-Profit Group

B&C Not-For-Profit Group

Bowers & Company CPAs Not-For-Profit Group has a wealth of experience serving Not-for-Profit entities.

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