5 Things Your Nonprofit Can Do to Ramp Up Faster After COVID-19
The financial deterioration brought on by the COVID-19 pandemic has dramatically increased community needs while simultaneously delaying and shrinking some charitable donations. As weeks turn into months of stay-at-home orders and tens of millions of job losses, nonprofit executives are increasingly concerned about meeting demand for services and sustaining funding.
In some good news for nonprofit leaders, a March 2020 donor survey by Fidelity Charitable shows donors are stepping up during this time of crisis. When asked how the pandemic would impact their charitable giving, 54% of donors intend to maintain their prior giving levels and 25% plan to increase donations.1 Donor-advised funds were even more supportive, with 59% planning to continue normal contributions and one-third planning to increase their giving this year.
As governments around the world plan for easing lock-down restrictions, nonprofit executives are thinking about how to ramp up their organizations for a new normal in a COVID-19 world. Now is not the time to hunker down—nonprofits need to take proactive steps to stabilize their finances, adapt to new conditions, and position for continued mission success.
Here are five areas to think through as you prepare to lead your organization into recovery:
- Work from home or return to the office?
Your first duty is to protect the employees and volunteers who drive your organization’s mission as well as the public they serve. It could be a good idea not to bring everyone back to work at once. If employees have been working remotely, check to see who might feel more safe continuing to do so as you reopen your physical location.
Rethink your office
In the office, you’ll need to accommodate social distancing guidance such as leaving six feet between employee work areas and not gathering large groups together. Open office environments will need to be reconfigured and areas where employees congregate—such as break rooms, cafeterias, and coffee/water stations may need to remain closed at first. Think about issues such as increased schedules for cleaning and sanitation, any requirements for personal protective equipment such as masks, and a mitigation plan for what you will do in the event that an employee or volunteer does get sick with COVID-19.
Build team agility by adding flexibility
The public health experts say that we will most likely see disruptions from COVID-19 for at least another 18-months until a vaccine is available. Invest now in processes and infrastructure that infuse the most flexibility and agility into your organization.
Analyze your current processes, workflows and tools. Now that you’ve experienced remote work as a team, how could things work better in the future? How can you create greater engagement and empower employees? By now, you have probably noticed that working remotely requires extra clarity when it comes to defining next steps, objectives and deliverables for your employees.
Update your processes for team meetings with a remote workforce. Many leaders have found it’s important to have more frequent, short check-in web or teleconference meetings with teams. Increase collaboration by creating agendas together as a team at the beginning of meetings. Make sure that every member of the team participates in a meeting. Ask employees to share their challenges, their success points and their feedback. Leaders should listen and speak last.
Implementing paperless processes and cloud (SaaS) solutions now can give your team the agility to rapidly transition back to work-from-home conditions if another wave of the virus moves through your area. With the right combination of SaaS tools and communication strategy, you can leave part of your team remote while other employees return to the office without losing productivity or collaboration. Think about all of the tools you needed as an organization—for example group communication tools and file sharing—as well as the specific systems for different operational departments, such as financial management or human resources solutions.
“Moving to a one hundred percent work-from-home arrangement has created very limited disruption with our finance team. We still have to physically pick up the mail but with Sage Intacct we have been able to completely manage the finances of our church remotely during the COVID-19 crisis. It’s business as usual for us. This is just another reason a cloud-based accounting system works for Seacoast.”
Glenn Wood, Pastor of Administration, Seacoast Church
- Leverage available government stimulus programs
While the headlines mostly talk about the economic impact on small businesses, the Federal government’s economic response to COVID-19 also includes provisions for nonprofits. 501c3 organizations are eligible to participate in many of the government financial relief programs set up in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Options for nonprofits include:
- Paycheck Protection Program (PPP): Low-interest, fully forgivable loans of up to $10 million, designed to help eligible organizations with fewer than 500 employees cover the costs of payroll and some operational expenses.
- Economic Injury Disaster Loans (EIDL): This program includes the ability to get a $10,000 emergency advance that does not have to be repaid—effectively a grant. Organizations that qualify are supposed to be able to receive this advance within days of applying.
- Delayed payment of payroll taxes: You can defer paying the employer portion of your workforce’s payroll taxes during 2020 and instead opt to pay it in equal halves at the end of 2021 and 2022.
- Employee Retention Credit: The IRS authorized a refundable credit for 50% of wages paid by employers during the COVID-19 crisis. To qualify, an employer must have either 1) fully or partially suspended operations due to a COVID-19 shut-down order or 2) gross receipts declined more than 50% compared to the same quarter in the prior year.
- Economic Stabilization Fund: Under this fund, loans and loan guarantees can be made available to mid-sized and large nonprofit organizations (500 to 10,000 employees) that do not qualify for small business programs. These loans would be made at an interest rate no higher than 2% but would require that 90% or more of the workforce be retained until September 30, 2020.
- Reach out to donors to request support
Now more than ever, you will need to keep existing donors excited about your mission and try to re-engage past donors that may have gone dormant in their giving. To inspire your donors, you need to employ every strategy in your toolkit to tell your organization’s story in a clear, powerful, and compelling way. Use your website, social media, email campaigns, direct mail and telephone engagement to amplify your message. Add credibility to your story by backing up your mission with the financial and operational metrics that demonstrate your organization’s impact.
Tell donors about three new, limited-time tax deduction enhancements
Here are extra bonuses to include in your next donor communication—the CARES Act contains:
- $300 for non-itemizers: a one-time, above-the-line deduction of up to $300 made to qualifying charities.
- Unlimited donations for itemizers: For individual taxpayers who itemize deductions, the IRS suspended the limit on deductible contributions for 2020, so they can give as much as they like and itemize it all.
- Double donation limit for corporations: The limit on deductions for charitable corporate contributions has been raised from 10% of AGI to 20% for the 2020 tax year.
As you update past and present donors about your mission, educate them about this opportunity to help your cause while reducing their tax burden.
Storytelling has always been critical for nonprofit donor engagement, but right now you will need to do more to rise above the noise of the dramatic daily news headlines. Now is the time to take your storytelling to the next level. But be careful not to appear tone deaf to the pandemic situation—in a recent survey of national advertisers, 89% of marketers said they continue to adjust their messaging in view of the current environment.2 Nonprofit organizations need to tie messaging into current events, convey a sense of being “in this together” and demonstrate how they are helping others right now.
- Take stock of your financial situation and adjust
Every nonprofit organization will face some difficult decision in the weeks and months ahead. The economic road back from COVID-19 will not be quick or easy. Three-quarters of nonprofits recently surveyed by Sage Intacct believe the current recession will last more than seven months. More than 40% are working to recue or contain costs, and more than one-quarter plan to lay off employees.
Sage Intacct, Finance Sentiment in a COVID World: Reactions to the Crisis, April 2020
The good news is nonprofit organizations have weathered many economic storms and giving trends usually recover more quickly than the overall economy. According to a recent analysis of nonprofit performance during the last recession, Nonprofit Quarterly noted, “according to the hard data, nonprofits are excellent and highly adaptive managers when it comes to running complex organizations, even in financial downturns.”3
To recover faster, use every financial analysis tool and report at your disposal to help your team find the way forward. Scrutinize every expense to see where you could capture some savings. Talk to vendors about renegotiating contracts and moving to an automated ACH payment process. Analyze your mixture of full-time and part-time employees and where you might be able to use more volunteers.
“It's no surprise that finance teams are starting with the eminently practical urgency of cash flow management and redoing budgets. But this puts the focus on the tools in use - especially given the remote work imperative. If there's one thing this pandemic has underscored, it's the value of trusted - and remotely accessible - financial and planning systems. Paper-based processes and re-circulated spreadsheets were already problematic. When the office itself is off limits, they are soul-grinders.”4
Jon Reed, Co-Founder, Diginomica
- Collaborate and get creative to shore up your mission
After you’ve taken stock of the financial picture, get creative in pursuing your mission. Get the staff (and perhaps major donors) brainstorming about better ways to deliver programs. Reimagine some of your services. Explore new ways to fundraise without being face-to-face. Talk to other organizations—could collaboration help you drive better results with scarcer resources? Where there’s a will, there’s a way!
Already during the COVID-19 crisis, we’ve seen plenty of heartwarming examples of nonprofits adjusting and adapting through creativity and collaboration. Here are just a few examples of nonprofits getting the job done under the most difficult of circumstances:
- Food banks quickly revamped operations to create drive-through food distribution for food insecure families. In some larger metropolitan areas, food banks received help with distribution from the National Guard.
- School systems developed ways to continue providing lunch and snack packs to students even after schools were closed through walk-ups, drive-throughs and home delivery.
Collaborating with other nonprofits
- The United Way partnered with GiveWell Community Foundation to create the United Community Relief Fund, collecting donations and quickly dispersing funds through direct grants to 34 local nonprofit organizations.
- Leaders of 38 Fond du Lac, Wisconsin nonprofits formed a peer-to-peer group to brainstorm how to meet community needs and accomplish fundraising goals.
- Friends of the Escambia County Animal Shelter created a new fundraiser called “Front Porch Portraits” where a (socially distanced) photographer takes family pet photos outside of their home.
- Orchestras in Hartford, Connecticut and Oregon replaced in-person gala fundraisers with virtual galas and online auctions. The Detroit Symphony Orchestra made an online library of concerts free to the public and asked for donations.
- The Humane Society of West Michigan asked the community to donate “Recyclables for Rescues” to help animals. Response was overwhelming, with nearly $10,000 worth of recyclables received.
“There is also a significant amount of collaboration, hope, and ingenuity coming out of the sector right now. With organizations like Habitat for Humanity and Save the Children staying connected to their core missions and showing up for those in their care, no matter what, an important metric for success is being seen in the field: unconditional love.”5
Alyssa Wright, Contributor, Forbes
Nonprofit executives have faced tough economic times before and led their organizations through to emerge stronger, more creative, and with a greater mission focus. As you now work to protect employees, apply for stimulus programs, increase donor engagement, and determine the best way forward, Sage Intacct stands ready to support you with tools and resources to help you analyze financial performance. Build your brand through nonprofit storytelling that employs images, outcomes metrics, and financial performance data to earn donor trust and contributions.
1 Fidelity Charitable, “COVID-19 and philanthropy: How donor behaviors are shifting amid pandemic,” 2020.
2 The Nonprofit Times, “Marketers Adjusting to COVID-19 Using Creative Messages,” April 6, 2020.
3 Nonprofit Quarterly, “Nonprofits in Recession: Winners and Losers,” March 19, 2020.
4 Diginomica, “How Has Coronavirus Changed Business Spending – and When Will the New Normal Get Here?,” April 29, 2020
5 Forbes, Three Reminders for Nonprofit Leaders During COVID-19, April 7, 2020
A native Texan, Joan has over 25 years of experience in the accounting, technology, publishing, and nonprofit fields. Bringing her experience as a nonprofit financial leader to Sage Intacct, Joan has been instrumental in creating solutions, and providing support and best practices that help ensure nonprofits achieve their mission.