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Nonprofits Survived 2020 — What's Next?

Posted: 2/24/2021

Click here to read on NonProfitPro.

By Alan Stein

While the COVID-19 pandemic has certainly created economic challenges across many industry sectors, there are parts of the nonprofit arena that survived and even fared well in 2020.

For example, 34.8 million people on #GivingTuesday donated a record-breaking $2.47 billion to U.S. nonprofits. Of course, not all nonprofits performed optimally in 2020, which points to the need to develop strategies for both survival and capitalizing on unexpected success from last year.

While there could be a light at the end of the tunnel with the vaccine distribution efforts and cases declining overall, there are still plenty of potential issues around the new virus strains.

This is why we hope for the best, but prepare for the worst. With this in mind, there are a number of financial and operational survival strategies that can help any nonprofit get through these challenging times, and even maximize on unexpected successes from 2020.

Budget for Multiple Scenarios

Budgeting becomes even more important when there are uncertainties on the horizon. From an increase in demand for services with fewer resources to the need to reduce staffing, there are a number of scenarios to consider when budgeting.

A worst-case scenario budget should focus on what needs to be done to sustain operations throughout 2021. In addition, if your operations have effectively been put on hold due to COVID-19, develop budgeting scenarios for how to resume operations when things open back up. This could also include securing PPP loans to help you get to the other side of the pandemic.

However, while preparing for the worst-case scenario, it is important to also prepare budgets assuming that the organization can resume most, if not all regular activities. The timing is tricky, but it is important to be prepared.

Building Out Virtual Programming

In 2020, many nonprofits rapidly shifted to doing virtual programming and events, which was a major learning curve for many organizations. Thankfully, nonprofits can take these key learnings and further adapt their virtual efforts in ways that are more targeted and effective.

It is also possible to develop plans for hybrid virtual/in-person programs that can better monetize and optimize efforts. For example, many nonprofit trade associations are making their 2021 virtual symposiums and events more effective for attendees and vendor participants by leveraging better networking and collaboration tools — allowing these events to be more than a series of Zoom presentations.

In addition, there are a number of new solutions, such as text-to-donate, peer-to-peer and online donation pages, to even hosting virtual 5K fundraising runs where participants can complete the runs on their own time at any location.

Don't Make Any Wholesale Changes Based on New Grants

Last year, there was certainly an increase in grant opportunities aimed at helping organizations impacted by the pandemic, such as food banks. And many nonprofits pivoted toward COVID-related grants that helped to keep their employees productive, or just be able to sustain overall operations.

Many of these grant opportunities will continue in 2021 and they can be a great opportunity both to help people and organizations. However, it's best to avoid making any wholesale changes to your organization — such as starting new divisions or making executive-level hires — in order to secure these grants. It will require an unnecessary amount of effort to make these changes for grants that will possibly go away in 2022.

Your 2020 Financial Audit May Be Different

For nonprofits required to have independent audits, this year may look a bit different, where many of these audits will be done in a remote environment. Many nonprofits may have done their 2019 audits either before or during the early days of the COVID-19 pandemic.

For those in the latter category, these organizations may have already performed virtual audits in 2020 or had an audit done at a very challenging time of their operations. These virtual or hybrid audits will likely continue this year, and now's the time to work with your auditor to determine the best path forward for collaboration.

Keep Doing What Works — Yet Strive to Improve

As always, if something is not broken, then don't fix it. If your organization experienced fundraising success due to the pandemic, replicate the programs and virtual events from 2020.

If your digital marketing efforts were a success, keep doing what you are doing, but also research new tools, such as marketing automation and CRM that can help with targeting new donors.

When we finally get to a post-pandemic environment, we all will surely breathe a collective sigh of relief. However, we are not there yet, but the light at the end of the tunnel is getting closer.

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