Just as businesses are scrambling and innovating to figure out how to survive during the COVID-19 crisis, so too are charities and nonprofits.
Some businesses have been able to pivot to different ways of operating, but this is not always an easy thing for those in the nonprofit sector.
It’s not possible to offer online services to a homeless person or to feed an increasingly struggling community without funding and volunteers.
While coping with these challenges, many of the Walla Walla Valley’s charities are confronting loss of programs and staff that limit their ability to meet this increased need.
It takes a long time to create and build a strong nonprofit; this can be undone overnight in an emergency.
As boards of directors and CEOs or executive directors lead their nonprofits through this crisis, here are a few things that they might consider.
First, remember that the board is ultimately responsible for the mission and success of the nonprofit organization, and hires the CEO or executive director.
In normal times the line between board functions of governance and policy and the CEO’s role of leadership and management is a bright one.
In times of emergency the two must work more closely than ever to ensure the organization survives and is ready for the next phase.
Does the board have an accurate picture of its current state? “Current state” refers to the state of the organization’s funding sources, its ability to deliver services and the level of demand for those services. Further, what are the changes life “post COVID-19” may require of the organization?
Second, has the organization tapped into the local, state and federal resources available to it — applying for grants and loans where possible? Most of these are new in response to the pandemic. This is an urgent matter and time is of the essence.
In addition, has the organization reached out to other nonprofits in the area for in-kind help and support? Many organizations are collaborating as never before to share materials, facilities and ideas to get the job done. To do this organizations have to reach out, and may need to think outside the box to get things done in ways that are new and different.
For example, the YMCA is working with several area nonprofits to provide essential cleaning supplies and other support, including laundry services, and providing facility storage for American Red Cross emergency supplies.
There are many other neighborly collaborations occurring to ensure that key resources are available and that people are safe.
Third, is there a three- to six-month plan from the CEO or executive director for short-term survival? Even though the future is unknown, now is the time for management and boards to work together to consider different scenarios and options, complete with a financial analysis of each one — costs, revenue, effect on balance sheet, effect on the business plan and mission.
If there is any doubt about whether the organization can continue, the sooner this question is confronted the better.
Together the organization’s leadership should create three scenarios for the board to consider: a) Continue as best one can paring the less important programs and/or introducing cost efficiencies throughout the organization; b) Suspend operations except for necessary expenses so that the organization can resume at some point, or c) Terminate and/or merge operations with another nonprofit so the basic mission is still served.
Fourth, is the legal nonprofit status of the organization being protected? Don’t let important filings and registrations be lost in the confusion and disruption. The annual Form 990 is still due five months after the close of your fiscal year.
If your fiscal year is the calendar year the Form 990 is due May 15 unless an extension is received. If this filing is missed for three years in a row the organization will automatically lose its tax exempt status.
There are annual renewals required in the states where a nonprofit raises money. The organization’s corporate registration has to be renewed in your home state. There may be necessary or key professional organizational or trade group membership dues that the organization should make sure are current.
Many leaders of nonprofits are working on the frontline daily responding to the community’s needs and a rapidly changing regulatory environment.
Most nonprofit management teams are dealing with reductions in staff, budgets and operations.
The skills you bring to the board are in demand — ask what you can do to help your team.
Reach out to your network on behalf of your organization. Ultimate responsibility for a nonprofit achieving its mission, and its survival during and after COVID-19, belongs to the board.
I hope these points are things that will help nonprofit boards and board members succeed in saving their organizations and positioning them to rebound for the good of the community in the future.
The Walla Walla Valley needs a vibrant, responsive and effective nonprofit sector.
We are in this together.