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by Kim Vaccari
Nonprofits suffered this year. Starting in March when COVID-19 hit, it has been a nonstop game of survival, learning, pivoting and reinvention. Many strived and filled in gaps where the government failed and provided essential services to the most vulnerable. Many shuttered their doors awaiting the time when their missions became more relevant. And sadly, many closed, unable to weather the storm of loss of funding, loss of staff and lack of resources to continue their missions in the virtual world.
What has been made crystal clear is that the nonprofit sector played a critical role during the crisis and will continue to play a critical role in our recovery. So now is the time to take a breath and see what your nonprofit has learned from this year. How did you manage? How are you planning for the future when so many factors are uncertain? Do you see some signs of what the new normal will be?
After a year of being in crisis mode, take the time to be thoughtful about the coming year. Make the following New Year’s resolutions as we inch toward recovery. You will be stronger for it.
Resolution No. 1: Review and Strengthen Organizational Governance Practices
Review your by-laws to ensure that they sync with your practices. Virtual board meetings and voting may very well be around for a long time, so it is critical that your by-laws match your current practice. For example, do your by-laws allow for virtual meetings, email voting, etc.? Is your committee structure still relevant and serving the organization? Take the time to do a full review of the by-laws and amend and readopt if necessary. Also, be sure to check the nonprofit laws in your state to see what is permissible in terms of virtual meetings. Some prohibit it; some have allowed it for a period of time. What are the rules in effect, and are you compliant?
Examine your policies. Are your policies equitable? Did they work? Are they still relevant? Did you discover that you did not have adequate policies in place to deal with a crisis, working from home, governance, etc.? Review all of your organization’s policies through an equity lens. Make sure all the language is gender neutral and inclusive. Then rewrite them and readopt them.
Check for mission creep. If you have pivoted dramatically in terms of your mission and programs, make sure that the services you are providing do not fall outside of your Certificate of Incorporation.
Address board engagement. Did you have board members who ghosted you during the crisis? Was there a lack of engagement from your board that hurt your ability to have a quorum or get decisions made quickly? Think about having the hard conversations with those board members who were unable to provide the level of service you require from them. Identify potential new board members who can enhance the organization and provide you with the skillset and fundraising support that you need.
Get better at financial reporting. With the situation changing every day during the pandemic, it is likely that your budget and financial position changed rapidly. Did you keep your board informed? Create a new monthly financial report with key metrics and financial information that can be shared with the board. They have a fiduciary duty to have a solid understanding of the basic financial operations, so help them meet that goal in a brief, digestible financial dashboard that shows the financial picture.
Resolution No. 2: Focus on Employee Engagement
You likely found out very quickly the importance of a dedicated staff, willing to go above and beyond the call during a crisis. Many worked long hours or put themselves at risk working the frontline. Focus on what you can do for them in the coming year. Nonprofit employees are universally underpaid, and organizations must find ways to retain staff, particularly those who have worked hard during the crisis. If salary increases are not feasible due to financial constraints, find other ways.
Review budget. See what your budget looks like in the coming year. Determine if salary increases or one-time cash bonuses are feasible. Sacrifice an underperforming program or put off a nonessential project, and use those funds to reward your employees.
Enhance PTO. Use paid time off to reward employees if salary increases are not doable. Add a floating holiday for an equitable way to allow staff time off for things they find important. Offer self-care days, volunteer time off, flexible hours. Your employees will be stronger and more engaged.
Use recognition programs. Sometimes the small things carry the most weight. Use recognition as a way to boost morale and let employees know that you appreciate them. Inexpensive gestures of support — employee of the month, team triumph award, excellence in leadership awards. Maybe a small gift card or even a rotating trophy. You will be surprised at the impact recognition will have.
Review your benefits package. Are benefits equitable and flexible? Did they serve your employees when needed? Can you afford to enhance them — lower copays, added coverage? Is your paid family leave policy gender neutral and robust enough? Do a review of your benefits package, and make changes to make it inclusive and as strong as your finances allow.
Training and personal development. Opportunities for personal development and training is another way to compensate employees. Provide access to professional training courses, webinars and conferences. There is a vast amount of resources available, many free or of little cost. Show your employees that you value their career growth and give them the time and freedom to choose their own opportunities. This will keep them engaged and continually growing.
Resolutions No. 3: Get your Financial House in Order
Budgeting. Like many nonprofits, your budget likely looks quite different now than prior to COVID -19. Priorities change, programs change, equipment and supply needs will have changed. Now is the time to rethink your budget and start from scratch. Staffing, expenses, technology and program delivery should all be reviewed, and a new budget created for the new environment.
Streamline and update your financial reporting. Funders and grantors are looking for strong financial reporting. An engaged board needs regular financial reporting. Develop a set of dashboards that can be used to report out and up with real time information. This will be critical for loan and grant programs, compliance, regulatory reviews and fundraising. Create some easy-to-use dashboards that can be updated monthly so the information is readily available for applications and reporting.
Explore additional revenue streams. Have a strategy session with the board and leadership to come up with alternative funding sources. Look at areas that you have not before — state, federal and local grants, foundations, fee for service. Be creative! Not just for fundraising, but sustainable revenue streams to help support operations.
Check your internal controls and financial management. Make sure that your financial policies and controls are still applicable and working in the remote environment. The existence of documented workflow, policies and procedures, expertise alignment, and internal controls are critical to ensure accountability, improve financial reporting and mitigate financial risk. It is also critical for making informed long-term decisions. An underperforming finance department affects the entire organization and can negatively impact growth, program delivery, cash flow, productivity, employee morale and reputation. Undertake a financial assessment to ensure that you are functioning as efficiently and effectively as possible.
Resolution No. 4: Strengthen Your Cyber Security.
If you are like most organizations, you had to pivot to a remote work environment overnight. That introduced a whole set of risks that need to be addressed. Cyber security initiatives have become more important than ever. Make sure you are protected.
Check your policies. Make sure that you have policies surrounding the use of technology at the organization. This should address internet, email and computer use policies, as well as guidelines regarding social media posts, utilizing public Wi-Fi, prohibited uses and protection of the hardware.
Double-down on training. Make sure your employees are professionally trained on the use and protection of technology. Hackers, scammers, phishing schemes are rapidly evolving, and it only takes one slip to cause significant damage. Make sure your data, personal information and donor information are adequately protected by training employees on what to be aware of. Even the smallest nonprofit should require annual cybersecurity training for its employees.
Use new tools. There is an abundance of tools available now that are free or very low cost that can help you manage your organization, particularly in the remote environment — document sharing tools, collaboration tools, project management tools, training, marketing, fundraising. Take advantage of these new innovations to enhance your organizational management.
Build in-house expertise. Make sure that you have at least one dedicated employee with technology expertise. Not all nonprofits have the staff resources to have an IT department, but make sure there is someone in the organization that can address technology needs, oversee system implementation and provide support for staff. There should be a holistic review and management of all of the technology tools, policies and usage. Use outsourced services if necessary; this is an area that is only going to grow in importance and poses a significant risk for your organization if not properly managed.
Resolution No. 5: Revisit Your Strategic and Risk Planning
Review your strategic plan. Is your strategic plan still relevant? Goals and priorities have likely changed, so any strategic planning process you undertook prior to the pandemic may no longer be relevant. Review your goals and the projects needed to meet those goals and make any adjustments for the coming year. It might even be time to start a whole new strategic planning process to ensure it aligns with the new environment and the mission of the organization.
Take the time to develop scenarios. The future is still uncertain, so it will be important to prepare several scenarios focused on different outcomes. And this is not only for financial projections, but also for areas related to human resources, operations and development. Plan for the worst-case scenario in each of these areas to ensure you are ready.
Undertake an enterprise-wide risk assessment. Now is the time to do a holistic assessment of the risks facing your organization. Having a clear idea of the risks that face your nonprofit will allow you to focus on implementing strong mitigation techniques. While not many nonprofits plan for a pandemic, having risk mitigation techniques in place now to address the known risks can lessen the impact of a crisis.
Plan for succession. COVID-19 has changed everybody. The way we work and the way we live. With remote work, opportunities are global. Make sure you have a strong succession plan in place to address loss of leadership, board members and staff.
Use your platform. Use your nonprofit platform as a voice for change. Nonprofits filled a vital role in the issues facing the country in 2020. They were front and center in organizing, advocating and serving. No matter how small, you have a mission of service. Make sure your voice is heard and your message is clear in 2021.
We all need to do everything we can to make this sector stronger. It is very clear that the nonprofit sector plays a vital role in providing services where the government does not step in — nonprofits can help our communities and the country recover. That includes organizations, funders, fundraisers, philanthropy, consultants and membership organizations. There are many steps you can take now, and tools you can implement to make your organization stronger. Use them now, the country needs our nonprofits to survive and be strong. Get your house in order, so you can face whatever the next crisis is!Return to Insights & Events