Skip to main content

Watch McKinley Carter's '4Q2022 Market Review & Outlook for 2023' Video

Smart Actions

Smart Actions to Advance Your Nonprofit Organization During These Uncertain Times

Photo of author, Kathleen McDermott.
Kathleen McDermott
Business Development Manager and Director of Nonprofit Advisory Services

In these very uncertain times for our families, friends, and communities, it’s difficult to navigate the path to full recovery. For many nonprofit organizations, that navigation is made even more difficult due to revenue shortages, slashed grants and funding, and postponed or cancelled events that are key to fundraising and outreach. So, what should a nonprofit do to set a positive course for the rest of 2020 and beyond? Here is a recap of the “Smart Actions” recommended during a recent webinar hosted by McKinley Carter Wealth Services.

What’s the State of the Economy?
While much has positively changed in the markets and economy since the May 21, 2020 webinar, the following points remain valid and are noteworthy:

  • Intra-year declines and volatility is always part of the investment tradeoff. Hopefully we’ve seen the worst low of the year.
  • Looking back 100 years, we know that after the 5 biggest market declines, there has been sharp recoveries. From a historical perspective, this seems to be the case for 2020.
  • 2020 earnings are likely to be negative; yet 2021 earnings projections continue to appear positive.
  • However, in order to experience recovery, discipline is important. While emotions tend to play a role in investor decisions, sticking to an organization’s investment policy will help weather those economic downturns. Sitting out of the market, even just a few days, will negatively affect your returns.

How Will Current Conditions Affect Fundraising?
While giving may not be as robust as it was in 2019, there is a resiliency among donors and willingness to help the organizations they are passionate about. Smart Actions to keep your donors engaged include the following:

  • Focus your COVID messaging to existing donors. Your donors want to help you at this time; but you need an effective communication plan. Be specific. Tell them how you have been affected by the pandemic and what your organization and leadership team is doing now. Keep your core mission at the forefront of all your communications.
  • Develop a script for “care calls” and determine who will make those calls. Recruit your organization’s senior members, board members, and volunteers to make those calls.
  • Consider the use of short videos to get your message out.
  • Set a plan for a transition to your normal fundraising cycle: It’s difficult to transition a donor back to the normal fundraising cycle so it’s important to have a plan in place that helps transition your organization from crisis mode.
  • Determine if you should postpone, transition to a virtual setting, or cancel special events altogether. Analyze the gross and net revenue for each event and how they impact your fiscal year.

What other FINANCIAL SMART ACTIONS might you consider?

  • Continue to research what Emergency Grants are available (local, state, federal).
  • Consider your Reserves: Reference your reserves policy. If you don’t have one, what do you have and how long it is available; how will you replace those funds?
  • Do you have Endowments? Are they restricted, unrestricted, or board designated?
  • Research your state’s laws regarding Restricted Gifts/Grants. Are there instances where those funds could be used in an emergency situation?
  • If you’re in the midst of a Capital Campaign, determine the appropriate action steps based on your current campaign phase. Possible considerations: Defer a feasibility study if you are in the initial stage of a campaign; extend your timelines if you’re in the silent phase and be open to donors who want to defer pledge payments until markets fully recover.

Continue PLANNING as you activate your Smart Actions

  • Revisit your Strategic Plan: do the current timelines still make sense, what revisions need to be made to short- and long-term goals?
  • Consider tabling current costly programs.
  • Determine if this a time to try new, low-risk programs?
  • Is this the time to breathe new life into your current programs?
  • Perform Scenario Planning: What are the worst case vs. best case scenarios for your 2021 budget?
  • Reach out to peers across the nation to find out how they are coping and what they are doing. Collective solutions will provide much-needed inspiration.
Although the above actions are critically important, it’s unrealistic to think you can tackle all of them at one time. Prioritize the action steps that make the most sense to your organization. Delegate responsibilities where appropriate. Above all, don’t suffer in silence – Bring your leadership team, board members, key advisors, and peers together to create a plan with a real timeline and real objectives.

For more detailed information about the recommended Smart Actions, please access the webinar recording here.
Related Insights
Board Composition Blog DHM USE

3 Types of Board Members: Why All Are Essential for Organizational Success

Many people find enjoyment in service on boards of directors for their favorite non-profit organizations. The most effective boards seem to have a thoughtful and strategic approach to selecting their directors with the intentions of achieving and maintaining an appropriate balance of skills, experiences, and interests that serve the organization’s interests very well. This issue is particularly important among selection of officers for the board. Learn more.

Read More
I Stock 1058694620 KAM cybersecurity blog USE

3 Areas of Cybersecurity Risk Pose Concern for Today’s Nonprofits

Cybersecurity is a hot topic these days and news headlines about cyber attacks and hackers are quite common. The nonprofit world is not immune to such attacks. In fact, recent statistics reveal two truths for nonprofits: (1) the frequency of cyber incidents is increasing and (2) nonprofits often lack proper cybersecurity protocols. Find out what areas are most vulnerable for nonprofits and how to safeguard your organization.

Read More
I Stock 1316707577 ESG Header Image FINAL

ESG Ratings Give Nonprofits More Impactful Investing Options

No one understands the impact of a dollar like non-profit organizations. Often, an organization’s ability to change the world for the better relies so much on the stream of donations to fund their mission. However all too often, pursuing that mission stops when an organization’s funding outpaces their needs and they turn their attention toward investing. It is now easier than ever to affect positive change in the world while still getting a return on invested capital.

Read More