The COVID-19 pandemic taught the leaders of nonprofit organizations many lessons starting in March of 2020. Perhaps the most important lesson concerned how to keep your nonprofit financially afloat during a pandemic that creates an economic crisis. More than two years removed from the start of the COVID-19 pandemic, the American economy has once again taken a turn for the worse.
Skyrocketing inflation has decreased the amount of money donors have to give to nonprofit organizations. Nonprofits are reliving the economic nightmare of 2020 except this time, they know how to navigate the turbulent financial waters produced by economic turmoil.
If your nonprofit is struggling financially, you have several options available that do not involve terminating employees.
Reduce Office Expenses
Before you place employees on furlough or even have to terminate a few workers to save money, consider slashing the office budget, especially the office supplies budget. Cut back on the use of paper products, as well as hold off on purchasing new equipment such as a fax machine and computer monitor. You also should consider cutting employee hours and temporarily suspending benefits such as contributing to retirement accounts.
You also can ask your landlord to renegotiate the terms of your nonprofit’s lease, particularly if you are approaching the end of the lease. If your nonprofit operates out of multiple sites, consider consolidating real estate into one main office. Even after the economic gloom lifts, working out of one office saves you a considerable amount of money on supplies and utility bills.
Negotiate Better Deals with Vendors
Vendors do not want to lose your business, which means they most likely are willing to negotiate different terms for purchases. Joining forces with small businesses and other nonprofit organizations gives you the purchasing power to buy items in bulk at a discount. If your workplace model has shifted to remote locations because of the pandemic, you can cut deals for fewer maintenance visits and a significant reduction in food and beverage services.
Stick with the Virtual Work Model
If there was a silver lining produced by the COVID-19 pandemic, it was the pandemic that taught nonprofits about the cost-saving value of remote work. Your nonprofit probably saved money on meetings, travel, and special event expenses. Remote workplaces also demonstrated how effective virtual meetings and special events can be at communicating vital points and getting introduced to potential donors.
Your nonprofit does not have to buy into a 100 percent remote workplace. Many nonprofits have adopted a blended workplace model of both remote and in-person contributions.
Rev-Up Your Volunteer Drive
Before the onset of the COVID-19 pandemic, most nonprofits did not place as much emphasis on recruiting volunteers as they did recruiting professionals to meet their salaried staffing needs. The great budget crunch caused by the pandemic has dramatically changed the focus on volunteers. Adding volunteers to your nonprofit staff should be the most important priority. Recruit volunteers at high schools and on college campuses. Many businesses reward employees that contribute their time to eligible causes.
Make sure you assign meaningful tasks and projects to the volunteers that give their time to your nonprofit organization.
Pay Attention to What Your Nonprofit Spends
Donations flooded into your nonprofit before the onset of the COVID-19 pandemic. Then, the money spigot went dry. Now, you have learned the most valuable lesson of all.
Monitor what your nonprofit spends to prevent the frivolous spending of hard-earned donations. Instead of tracking expenses in an annual report, move to shorter periods such as quarterly or even monthly. Paying attention to expenses can help your nonprofit avoid terminating valuable workers.
Ernst Wintter & Associates provides California nonprofit audits, broker dealer audits, tax services, and 401(K) audit services. Contact us for more information.