As 2020 slowly comes to end, nonprofit organizations, like their for-profit colleagues, are all breathing a collective sigh of relief as they look forward to the start of a new year.

What will 2021 look like?

If there is anything we have all learned, it is that making predictions is a slippery slope! In early January and February, who could have ever foreseen global pandemic that has brought the world to its knees? However, knowing what has transpired can help us all be better prepared for whatever lies ahead.

What areas are likely to be of most concern for nonprofits?

The nonprofit community will have many crucial issues to address in the first quarter. Chief among these will be how to best manage funding sources going forward, how to cultivate and nurture individual and corporate donor relationships, how to serve clients effectively, and how to ensure proper protocol is observed for all operations and financial processes in a remote working environment.

Manage funding sources

As the year closes, this is the ideal time for nonprofit leaders to connect with their funding sources to confirm their intentions for 2021. Several important questions should be raised, such as whether or not the agency’s requirements will change (will number of participants be a deciding factor in grant giving?) as well as clarifying if grants will remain at the current level and if terms will be extended.  Additionally, it will be critical to know how quickly funds will become available when trying to juggle cash flow.

Along with keeping a watchful eye on revenue it will be equally as essential to keep an eye on the organization’s expenses.  Significant changes took place this year as a result of the reaction to Covid-19, including the use of telehealth and other virtual/remote options for delivering services. These will need to be reviewed and costs considered. Depending on the presence of a vaccine and other treatments, nonprofits may find themselves preparing to pivot again as 2021 unfolds. Unsure of what the circumstances might be, the leaders will need to be ready for anything.

Cultivate and nurture individual and corporate donor relationships

One of the most difficult challenges brought by the virus was the need for social distancing and other limited behaviors. So many nonprofits have always depended on in-person fund raisers and friend raisers as a significant way of generating exposure and revenue for the organization. Yet, these types of initiatives were among the first casualties of the war with the corona virus.   In lieu of fantastic galas, iconic golf outings, 5K races, Bowl-a-thons and more, nonprofits turned to sophisticated technology that allowed them to continue some of these programs in a virtual environment.   But as another year begins, the question will be if nonprofits will be able to raise the bar again.   Last year’s creative ideas will have to be improved on to keep donors’ interests. While the level of both individual giving and corporate support was generous early on in the pandemic’s first phase, there is concern that this may not be sustainable. The economy has struggled and there is a sense of resignation that may have a negative impact. To counteract this, nonprofits must maintain very close contact with their financial supporters and champions, keeping them in the loop regarding successful programs and positive outcomes as well as reminding them that even though the platform for giving has undergone profound changes, the mission has not changed at all and the need continues to grow.

Serve clients effectively

From food banks to family shelters to mental health associations, all of the social service organizations have had to quickly find new ways to deliver their support to the community’s most vulnerable citizens. Many nonprofits demonstrated a desire to adjust rapidly, embracing flexibility and innovation, improvising as they went. The results have been awe inspiring. Food has been distributed, services are offered virtually, hot lines have been established and online learning has helped even the families with pre-schoolers at home. While everyone wishes for a return to more normal situations, the reality is that nonprofit leaders and their boards and volunteers have identified and implemented solutions for the short term to ensure that no one is left behind.     

Ensure proper protocol for all operations and financial processes in a remote environment

While much of the spotlight has been directed to discussions of obtaining grants, encouraging high levels of fund raising, and serving the community, it is also vital to discuss the continuity of strong and effective management and financial operations, especially when working remotely.

With staff located in their home environment it is more important than ever to observe proper protocol and maintain an appropriate level of approval for all financial processes. This is not the right time to start loosening the rules and assuming that there is not much damage that can be done. In fact, it is imperative that the CEO/Executive Director and the Board members review credit card statements, petty cash receipts, monthly budgets, financial statements and cash flow projections to confirm that the data is accurate and that internal controls are being closely monitored for irregularities or inconsistencies.  Working closely with the nonprofit’s CPA and other advisors is also a smart move – enabling an outside perspective and a fresh approach to these important documents.

At midnight on December 31, 2020, all of us will be ready to welcome in a brighter tomorrow. But at the same time we cannot forget the lessons we have learned over the past year as we prepare for the next “new normal.” Whatever is on the horizon, nonprofits need to be ready to have strong procedures in place for achieving their mission, generating revenue, and securing all internal control processes.

If you have any questions, please feel free to contact me for a confidential conversation at Tara.DelGavio@SobelCoLLC.Co. I look forward to hearing from you.