There have been very few disasters in recent history that have disrupted our way of life to the degree that this global pandemic has. With social distancing practices and shelter-in-place across the country, many nonprofits have transitioned to operating remotely, canceled live events and drastically changed their practices and routines. Even nonprofits that remain open during this pandemic are relying more on online tools and technology to reduce in-person contact. Months into the pandemic with no clear end in sight, it has become clear that many of these changes have become part of our new normal.
Nonprofits that can quickly pivot to new priorities and adapt to the changing demands and expectations will be best positioned for success in this new environment.
New approaches to fundraising and capital campaigns
Galas and community events are the staple of nonprofits seeking to grow and nurture their relationship with donors and their community. In-person fundraisers are reliable sources of income for nonprofits, and for many of them, it is their main source of income. With social distancing in place, many organizations have restructured their fundraising events to virtual events, canceled or rescheduled their fundraising events indefinitely. Even if social distancing restrictions are lifted, there is no predicting when people will feel safe enough to attend an event.
Nonprofits are famously resilient and adaptive. Many are using creative ways to fundraise digitally. Some of my customers have found innovative ways to solicit recurring donations online, and others are using compelling visuals to drive donation on social media. An increasing number of nonprofits are experimenting with digital fundraisers - hosting live-stream ticketed events and performances, virtual meet-and-greets, auctions, tours, and dinner parties with featured speakers on teleconferencing platforms. These are just some of the ways nonprofits are using digital platforms and apps to adjust to the new normal.
Now is also a good time to reassess your nonprofit’s future by looking at different fundraising programs currently available and start planning for your next capital campaign. That way, your nonprofit will be ready to launch the campaign when the economy opens or when you feel the time is right.
I have helped many nonprofit customers plan and maximize funds from their capital campaign and I always encourage them to include me in their planning. A business banker with expertise in nonprofit banking will be able to provide valuable funding solutions that your nonprofit may not even be aware of. They can also help you assess financial risk and weigh different funding strategies.
Becoming leaner and more resilient
It can be hard to stay optimistic during a crisis. But how we choose to approach a crisis is what defines us. For some, this means self-reflection and a re-assessment of future goals. The same philosophy applies to nonprofits.
As nonprofits look towards the future, will your organization be leaner and more resilient than before the pandemic?
For nonprofits that aim to be a better version of themselves after the crisis, I encourage you to use this time to evaluate your practices, programs and vendors. Are there current practices or processes that can be streamlined or automated to create efficiencies? Can you negotiate a better rate with your suppliers?
Some strategies that can help your nonprofit become leaner and more resilient:
Managing revenue and expenses. There are many available treasury and cash management tools to streamline financial processes such as Automatic Clearing House (ACH) and wire transfers to receive and make payments. For nonprofits looking to reduce the cost of managing payables, there are comprehensive payment solutions like Integrated Payables. If you are still receiving checks in the mail, virtual tools like Remote Deposit can save your staff frequent trips to the bank. Electronic receivables and payables are not only critical to ensure contactless payment during social distancing but can also help your nonprofit operate more efficiently.
Better fraud protection. As more people are using online tools and services, fraudsters are having a field day. Nonprofits relying on online donations as a critical source of revenue during this pandemic are increasing their vulnerability to potential Business Email Compromise (BEC) scams and phishing attempts. To protect your organization from cyberattacks, having a robust fraud management system is essential to prevent any loss of funds and reputational risks from being a victim of fraud. Some popular fraud prevention tools that I encourage my nonprofit customers to have are Positive Pay, ACH Positive Pay and Debit-Block. If your nonprofit is making and receiving checks, getting Payee Verification can reduce your risk of check fraud. A good practice is keeping close tabs on your banking activities and monitoring them daily. However, that is not possible for many nonprofits who have a small finance team. Many nonprofits are also understaffed during this crisis and are unable to devote time or manpower to engage in practices meant to protect them from fraudulent transactions. Fraud management tools are automated and will alert your finance team to red-flags and inconsistencies immediately. This makes them an attractive service for nonprofits that are unable to monitor their banking activities closely.
Creating efficiencies through technology. Nonprofits are finding ways to trim costs while providing quality services to their communities. With a lot of events now online, many nonprofits are re-directing their travel/mileage budget to purchase teleconferencing services and other team collaboration software. Some nonprofits are also warming up to the idea of offering services and programs online, further reducing overhead costs. A few of my nonprofit customers have started offering regular direct telecast of their programs and services. In fact, nonprofits that have conducted online live classes, workshops and conferences have found success, with many of them experiencing higher rates of attendance and donations. Because of the convenience and cost savings of attending virtual services, some nonprofits can reach and assist more people.
Updating IT infrastructure. For nonprofits seeking to benefit from technology, making sure your infrastructure is equipped to handle additional bandwidth is important. One of my customers who runs a nonprofit clinic transitioned into providing online services quickly and efficiently. They are now providing services virtually and all their administrative staff are working remotely. Their key to success was having a newly upgraded and robust IT infrastructure. Upgrading your nonprofit’s IT infrastructure will be critical to the success of your nonprofit in the new normal.
Your business banker will be able to provide more guidance on the types of treasury and cash management tools as well as fraud prevention solutions to help your nonprofit become more effective and efficient. This will also free up time for your staff to work on crisis-recovery efforts and tasks related to your mission.
Business Continuity Plan
As you plan for the future, does your nonprofit have a business continuity plan for this crisis or the next? Questions that can help you prepare and think through what to include in your contingency plan include:
Does your nonprofit have a crisis task force? Identify the roles you need and staff who should be in your task force.
If your nonprofit continues operations, how are you planning for x% reduction revenues for the fiscal year? Imagine two or three scenarios with different reduction in revenues, and how your nonprofit will respond to each one.
What changes to daily operations has your nonprofit made or will make to respond to a crisis?
Does your nonprofit have additional expense adjustments it can take in a scenario where revenue falls below 50%? If it does, what are these expense adjustments? If it doesn’t, it may be time to identify areas where your nonprofit can reduce expenses in a worse-case scenario.
With the adjustments your nonprofit is contemplating, can you estimate the number of days you can continue operations with your current working capital without revenue coming in?
Is your banker involved in your business continuity planning? Your banker is your financial partner and can provide insights and solutions to help your nonprofit manage your revenue reduction in a crisis.
We are in this together
As a community, we are grappling with these changes together and adjusting to our new normal. Some nonprofits are adjusting to fundraising and providing services remotely better than others. And there are also some who find that moving programs online is simply impossible or does not work with their mission. Regardless of where your nonprofit falls in this spectrum, this new normal has exposed areas of redundancies in their current systems, providing opportunities to increase efficiencies and cost savings.
I cannot wait for this pandemic to be over. And when it does, I am looking forward to becoming a better version of myself. Till that day comes, consult your banker or relationship manager, streamline your current practices, and identify ways to create efficiencies to become a tougher and more impactful version of ourselves.