During this unprecedented time, almost all organizations and businesses are facing current challenges, from stay-at-home orders to employee layoffs. This has been a difficult time for leadership, employees and those individuals in the communities that you serve.
As the situation continues to evolve on a daily basis, it is important to remain calm. As each day seems to come with a new set of challenges, it is important to take a step back and evaluate the financial impacts this will have on your Organization. Decisions made now can help limit prolonged disruptions in fulfilling your mission. As we encounter new challenges, this is a great time for collaboration, creativity and compassion—concepts to which nonprofit organizations are not strangers.
For a majority of Organizations, financial impacts are going to be a reality. Your first step should be to put together a budgeted cash projection for the coming months to determine what your exact needs will be, taking into account potential decreases in revenues and expenses due to the impacts of COVID-19. If financial shortfalls are the reality for your organization, here are just a few recommendations on navigating those impacts:
Expenses
Look at your expenses and try and determine areas where costs could be reduced or eliminated.
For example:
- Can you scale back on any overhead costs?
Personnel
Before resorting to employee layoffs, are there other ways you could get creative with your personnel costs to keep all individuals employed?
For example:
- Cut back or defer retirement contributions
- Ask employees to take a brief pay cut (note that you will still need to abide by all wages and hours laws in your state)
- Consider intermittent employee furloughs or universal part-time hours
Fundraising
Now is not a time to stop your fundraising efforts; it is a time to get creative! While many individuals in your communities also will feel the financial impacts of COVID-19, unprecedented times like these bring out generosity and kindness in all of us. Make sure your donors know that you are not immune to the economic effects of COVID-19 and remind them of the essential impact you have on the people in your communities.
Although all in-person fundraising events have been halted, we have endless amounts of technology at our fingertips (literally) to keep these fundraising efforts going.
For example:
- Social media platforms
- Direct mail
- Phone calls
- Video chats
Legislation
Stay up to date on the federal financial assistance packages that are being made available. The paid sick and family leave act will help organizations substantially (see additional links provided on our website for more information and resources). We will keep you up to date on the various assistance packages that are evolving daily.
Families First Coronavirus Response Act: Questions and Answers
The U.S. Department of Labor Wage and Hour Division defines “Paid sick leave” and “Expanded family and medical leave,” in addition to providing answers to dozens of pressing questions.
Read the FAQ
Local Resources
Reach out to your local resources to determine if there are grants, loans or other financial resources available.
For example:
- Small Business Administration (SBA) disaster assistance loans (see below for details)
- Private community foundation grants
- Business interruption insurance
- Local, city or county assistance
- Your local Chamber of Commerce and United Way
Finances
Have open communication with your lenders and vendors. Many banks and credit card companies have offered deferred payment options.
During these uncertain and challenging times, it is important that you take a step back, take a deep breath and remember your mission. Nonprofit organizations are essential pieces for the communities in which we live. Strategic decision making and compassion in times of crisis will help you overcome these challenges. At Hawkins Ash CPAs, we appreciate you and are here to help you.
Sign Up to Receive Email Updates
Be sure you’re getting the latest insights as legislative developments occur. We’re here for you with tax insights and business resources.
Sign Up Now
We Are Here for You
Contact us to talk through the challenges your business faces as you navigate through this unprecedented time. No doubt you’ll need help assessing cash flow and making smart projections, reviewing loan covenants, lining up bridge financing, talking to banks and lenders, figuring out staff loads and employee counts, handling disrupted supply chains, and so much more.
Read An Important Message from Our Firm
