The disruptive effects from COVID-19 have likely already been felt by your nonprofit, especially financially. As you navigate this uncertain time, it’s hard to know what’s coming next, but there are steps you can take today to help you manage the various challenges and continue delivering your mission.

Before embarking on any plan, it’s essential to know where you’re starting. Take the time to create an accurate assessment of the current cash on hand, operational costs, and cash flow projection.

A cash flow projection is a powerful tool that can help you see how much money you can expect to receive and spend over some time. It will help you anticipate any shortfalls to start planning and avoid them. That may mean you accelerate collecting receivables or cut back on extraneous expenses.

Knowing your current cash realities is the foundation for making smarter decisions that enable the organization to continue delivering value through the mission.

Once you understand your current cash flow, it’s easier to look at options and plan for different scenarios. For example, if one funding source dries up, what are your other options? Is there a project you can delay? Do you have access to a line of credit you can use? How long can you weather this pandemic in your current situation and these different scenarios?

Using your cash flow projections and scenarios, you can work with your board to develop plans that support the mission while maintaining a reliable cash position during short-term financial strain.

With so much uncertainty as to when the pandemic will end, nonprofits may be tempted to use their reserves to stay afloat. Before tapping into these resources, consider the purpose and application of funds carefully. Will you use them to fund a short-term deficit? Or, are you going to use them for a long-term, revenue-generating plan?

Because the entirety of the economic impact also remains unknown, using reserves to fund short-term cash flow gaps can leave your nonprofit exposed. Avoid leaving your organization with so few resources that it’s in a precarious, or even dangerous, position post-pandemic.

Have open and honest discussions with the board about the plan for reserve use. Strategizing different options beforehand could help set your nonprofit up for success in the long term.

Your employees are likely experiencing many emotions right now, including fear of uncertainty and stress from managing their old role remotely.

Align with your mission by helping your employees cope with change and adapt. Create an emergency remote work plan while recognizing that not all employees have access to a quiet space or childcare.

If you need to reduce payroll costs, figure out how best to do so while still maintaining the necessary staff to support your mission. You might decide that it’s better to reduce hours for everyone, or you might re-visit your staffing plan and move people to roles that directly support and prioritize growth projects.

Your nonprofit’s work is essential to the community and the world, but it’s easy to lose sight of that when there are so many challenges that need immediate attention.

When you start to lose sight of future plans and why it’s important to navigate this crisis, remind yourself of your nonprofit’s mission. Re-centering on your mission can help you make clearer decisions that shape the nonprofit’s trajectory and success for years to come. The long-term vision is critical during short-term choices.

You don’t have to navigate these issues on your own. There is so much to think through, and having additional support to help you brainstorm new ideas and solutions often leads to better results.

Look to your board, other nonprofit leaders, and business advisors to help you find answers to the tough questions that you’re facing. The Aldrich team is here to support you and your nonprofit. Reach out to your Aldrich Advisor for assistance fulfilling your nonprofit’s mission.