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COVID – 19 Not For Profit Updates and Implications

Karyn A. Nunn

March 24, 2020

The extent of the impact of the COVID-19 pandemic on nonprofit organizations will vary depending on the nature and activities of individual nonprofit organizations. 

Any organization that had fundraisers planned in March and the upcoming months are faced with event cancellations, which could represent a significant drop in actual and budgeted revenue for the year.  Expected contributions for the year are now uncertain.  Also, many organizations that provide services are looking at interruptions in the ability to provide those services and the potential for the loss of the related revenue for providing those services. Organizations have seen significant decreases in the value of their investment accounts, which is especially impactful to granting foundations and potentially those that normally receive funding from those foundations.  Many organizations rely upon their robust group of volunteers, who may not be able to volunteer due to social distancing, stay home orders, or other constraints on their time commitments during this crisis.  Due to the closures of many businesses and normal activities, the services of many nonprofits are needed now more than ever.

Communication with the community, the board, and employees is key to navigating these unknown waters.  We all need to keep those lines of communication open and to start thinking outside the box to continue to serve.  Many nonprofit organizations are at the forefront of the response to the growing needs in our communities.  Your organization needs to tell your story as it relates to this crisis.

Conversations and reassurance regarding the financial stability of the organization are critical.  Budgets need to be reviewed and revised for changes in the economy and needs of communities.  Realistic cash flow projections for the next 6-12 months should be completed as soon as possible in order to determine cash needs.  This information then can be used to determine your organization’s strategy for moving forward. In order to avoid laying off employees, organizations may need to consider new strategies for providing services, scrutinize budgets and cash resources, and look for new resources for donations in the upcoming months.  It may be possible for organizations to request prior donors release restrictions they had placed on contributions or evaluate the possibility of requesting donors of long-term pledges to accelerate payments.

Business Relief Programs

Some relief programs may also be available to nonprofit organizations. The following provides information on some of the recent activities for assistance to nonprofits that are currently in the works: The NonProfitTimes reported on March 18, 2020 that a coalition of charities is seeking $60 billion in coronavirus relief and economic stimulus and other measures to incentivize giving. Click here for more information.

The new provisions from the Family First Coronavirus Response Act do apply to nonprofit organizations, so organizations will need to evaluate the potential impact. Click here for more information.

The Small Business Administration (SBA) is taking applications for coronavirus business relief loans. The SBA has made an exception to its normal rules and is lending to nonprofit organizations in addition to for-profit businesses. The interest rates for nonprofit organizations is 2.75%. Click here for more information.

Business Continuity Planning

Do you have a business continuity plan you are utilizing?  If you don’t, consider putting one in place to assist with the upcoming weeks/months. Based upon the recent shelter in place orders, plan for working remotely, if possible. In order to maintain effective communication, organizations may also need to evaluate ways to maintain board contact remotely. 

Best practices for working from home can be found here. Organizations also need to consider cybersecurity as people work from home.

As always, please know we are here to help you with any of the new challenges you face. We’d be happy to discuss implementation strategies for any of the above topics.

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