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Scenario Planning for Nonprofits in the Era of COVID-19

ON YOUR MARK, GET SET, GO!

Everyone is waiting to get back to “normal.” What normal will be and how we will adapt is a difficult question. There will be challenges and the sooner nonprofits start scenario planning, the better. Here are some of the common scenarios I have heard from nonprofit friends.

Board governance expert Kim Donahue offers important scenario planning that nonprofits should be considering NOW. Get your board and staff thinking proactively today for a better future.

Will you be able to keep your current staff members?

Some nonprofits report that staff members who have been working from home feel very disconnected from their nonprofit. Loyal staffers are looking at other opportunities for the first time in a long time. Other employees have additional stress factors that may prevent them from returning to work. Some have already indicated that they are making plans to stay home for a much longer time to take care of young children and oversee online learning because most school systems are closed for the rest of the school year.

The increased unemployment benefits may make the unemployment check larger than the paycheck for some hourly wage earners for nonprofits. How do you convince an hourly wage earner to come back to work at this time, when it makes financial sense to stay on unemployment?

Several nonprofit friends have said that the prolonged furlough from their jobs has convinced some employees that it is time to retire. Others want to continue to work from home even when the office opens again. How do you navigate the “work from home” requests?

Will your clients come back?

Those who work in the arts are worried about those who attend their concerts, plays and exhibitions. How will social distancing affect attendance at concerts, plays and exhibitions? Will patrons want to attend a rescheduled performance or ask for refunds? What about the sponsors for the cancelled performances? Will they donate the sponsorship fee, or will they request a refund? How will you replace the lost revenue from a performance that cannot be rescheduled? How do you support our nonprofit until you can schedule performances?

For human service nonprofits, the concern may be whether they can handle the pent-up demand for services and whether there is funding and staff to support the increased service needs. Getting clients back on track with programming after weeks away will mean starting over for some clients.

Can you raise the money you need for operations?

The philanthropic community is feeling the pinch of the economic downturn on their endowments and is having to make decisions to conserve funds or dip into reserves. Some are looking at changing priorities for making grants during this time.

Nonprofits that do not provide direct human services are reporting that funders are pulling back to fund only basic needs. Some have been told not to apply for funding because of the changed priorities. Where do advocacy and arts organizations find the dollars to support their important missions?

Most nonprofits have had to cancel fundraising events for these months when everyone has been sequestered. Some have tried “virtual” events that have raised money, but not nearly the amount that the cancelled event would have brought to them.

Even when events have been rescheduled for fall, there are challenges. Are there reserves that can support operations until money from the rescheduled event comes in? Will there be intense competition from all the other events that have been rescheduled for fall?

Next Steps

These are tough questions. Boards and staff need to get to work now. These are the times when board members discover that their energy, ideas and good thinking are tremendously valuable to the nonprofit. We have all seen appeals from friends on Facebook for their favorite causes. That is a simple thing that board members can do. If they have made a pledge for the year, writing the check now can help get through the lean months.

Engaging the board and staff in scenario planning can also provide a blueprint for handling the tough months ahead. Recovering from the economic impact of COVID-19 is everyone’s job. Finding ways to cut expenses, prepare for lean months and make plans to raise money should be in process now. Do not wait!


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