All types of nonprofits have been impacted by COVID-19. Whether you work at an organization that serves the front lines or if your nonprofit has taken a backseat in the current climate, you’ve felt the impact of the virus.
The vast majority of nonprofits (those not directly involved with the frontlines fighting coronavirus) have experienced many of the same challenges. Fundraising may be scarce as your community endures the economic downturn associated with businesses closing their doors and laying off employees. You may be struggling to adapt your programming to be more socially distanced or full-on remote. This guide is designed for the organizations facing these issues.
That’s not to take away from the importance of the organizations on the frontlines! Those supporting healthcare workers, scientific research on the virus, and other related missions have a very different set of challenges. If you’re a part of the frontline mission, you may be able to draw insights from this guide, but ultimately, it’s designed for the struggles and challenges of the other missions and organizations.
Here at Jitasa, our nonprofit accountants have seen and helped nonprofits through a diverse set of economic and financial challenges over the years. During the era of COVID-19, we’ve picked up on some tips and tricks that nonprofits can use to meet the unique challenges faced today. These tips are what we’re sharing here today. We’ll cover:
- Re-Evaluating Your Budget
- Stewarding Your Supporters
- Getting Creative with Fundraising
- Communicating Openly and Frequently
- Keeping Accurate Records
Ready to learn more about connecting with your community and sustaining operations during COVID-19? Let’s get started.
1. Re-Evaluate Your Budget
At the turn of each year, your nonprofit creates a brand new budget that outlines your expected revenue and expenses for the year. Usually, organizations revisit this plan either once per quarter or around halfway through the year to make sure they’re on track.
This year is far from “usual” though. While we’re approaching the end of 2020, that doesn’t mean it’s too late to re-evaluate your budget for the remainder of the year. You should, in fact, go ahead and schedule frequent checks on your budget (especially given the turbulent economic conditions). Jitasa’s nonprofit budgeting guide suggests that you check in on your budget:
- Monthly – to review the budgeted vs. actual expenses and revenue for individual projects.
- Quarterly – to review the budgeted vs. actual expenses for the previous quarter.
- Annually – to collect insights from last year’s budget and start writing your next one.
And that’s during times of steady economic conditions! Keeping a close eye on your finances is even more important now.
At this point, you know how COVID-19 has impacted various aspects of your organization. If fundraising has been limited, check in to see how far off you were from your original revenue target. If you invested in new software to reach your supporters remotely, revisit your budget to see how the new investment impacted your anticipated expenses. Make note of any discrepancies (you’ll likely find some!), then consider how you’ll move forward regarding these changes.
Let’s say, for example, that your organization invested in a new live-streaming software solution to assist with virtual event planning during the pandemic. Since there’s no foreseeable end to the crisis yet, it’s worth noting that the annual payments for this solution will likely continue into the next year as well. You may highlight this part of your budget to make sure you factor it into your future plans and projections.
Evaluating budgets can be challenging, especially if you’re not well-versed with fund accounting. It helps to have an expert on your side to help you adjust predictions for next year, quarter, or month. Reaching out to a top nonprofit accounting firm can help your organization get everything on track to finish up the year on the right foot. After all, it will be much easier planning your 2021 budget when you start with an accurate and clear picture of your 2020 budget.
2. Steward Your Supporters
Your nonprofit supporters are always the lifeblood of your organization. They provide the funds you need to implement programs, accomplish various projects, and work toward your mission. More than ever, stewardship of these important supporters should be a top priority for your organization.
Consider post-pandemic life. After a long, hard year working to make up for scarcity in funding and socially distancing from friends and family, we finally get back to almost how it was before the pandemic hit. (This is all conjecture of course.) Will you simply keep asking for donations from those who had the capacity to give during these difficult times? Or will you return to your other supporters who may have come across hard economic circumstances during the crisis?
While chances are, you’ll do both, it’s likely that your historic supporters will want to continue giving and showing their dedication to your organization when they feel more secure in their own finances and have the capacity to contribute. However, how can you make sure they will jump back into helping your nonprofit succeed?
That’s where stewardship comes in. Regardless of whether a supporter is currently able to contribute or not, stewarding them right now will help you come out of the pandemic on top. It shows your supporters that you’ll stand by their side through thick and thin and that you value their relationship above their money.
According to Nonprofit Quarterly, it costs about ten times more to acquire a new donor than it does to retain an existing one. Therefore, it makes good financial sense to maintain your stewardship programs now so that after the chaos ends, you’ll find yourself able to more quickly bounce back with your retained support.
Some stewardship strategies that you may try include:
- Ask for feedback from supporters
- Keep an open line of communication
- Show additional appreciation for support
- Engage supporters with blog posts and social media updates
- Provide non-financial opportunities to show support
- Host virtual stewardship events
When you craft a stewardship plan, be sure to consider the level of support each donor (or prospect) can potentially contribute. Prospect research can help you define these levels. After all, you wouldn’t steward your major donors using the same strategies as you would a volunteer who hasn’t donated yet. Create a different segment of your stewardship plan for each donor level you define.
3. Get Creative With Fundraising
Adherence to social distancing has created substantial challenges for nonprofits. However, by viewing the glass as half full, you may uncover opportunities to learn and become more creative with various nonprofit activities, such as fundraising.
Virtual fundraising has been trending for quite some time now, even prior to the pandemic. However, the switch to all things digital and fully remote strategies has amplified and secured this trend to an even greater extent.
Therefore, your nonprofit has the opportunity to learn and enhance your own virtual fundraising ideas to capture the attention of your audience online. Because you’re vying for that attention against so many other organizations, you’ll need to get creative with your strategies. We recommend trying some creative fundraisers such as:
- Face mask fundraising – Sell branded face masks to raise money while promoting safety and healthy practices.
- Matching gift drives – Promote matching gift opportunities so that supporters can check their eligibility and contribute more without digging deeper into their pockets.
- Virtual book club – Find a book relevant to your mission and set up discussion groups with your supporters. Ask for donations before, during, and after virtual meetings.
- Virtual 5K – Enjoy all of the benefits of a regular 5K, but allow your supporters to run on their own path and on their own time.
- Virtual gala – Ask your supporters to get dressed up in their homes and enjoy a nice meal while attending a virtual gala. Be sure to include an auction, raffle, and other gala activities to help raise funds.
There is always some risk involved with trying new fundraisers. How will you know which events and strategies your supporters will respond most positively to? How can you be sure you’ll raise as much as you need to continue your programming?
As for the first of those questions, you can conduct some market research through surveys and questions. However, the best way to learn what your supporters like is to simply take an educated chance and see what their reactions are. Be sure to keep accurate records so that you know what worked well and what ideas can be improved upon in the future.
For the second question, we recommend that you work with a nonprofit accountant to estimate the revenue from various fundraisers. An accountant will help you decide where and when you can take some calculated risks and try out new strategies. They’ll help you find wiggle room in your budget if things fall short or make decisions about what to do with surpluses if a fundraiser exceeds expectations.
4. Communicate Openly and Frequently
Communication has become drastically more important for nonprofits during COVID-19. While it has always been a vital aspect of your strategy, it’s taken on additional weight in your strategic plans this year.
This is because you likely found some of your communication channels limited. No longer can you meet with your supporters in person or network at events. Plus, even online channels are more crowded than ever before as many other organizations—for-profit and nonprofit alike— are competing for supporters’ attention using digital means.
Our advice is to also amp up your communications and be sure to message openly and frequently. Supporters recognize honesty (it is the best policy!). When they know that you’re being honest, they begin to trust your nonprofit more. Therefore, tell them what’s been going on!
If you’re struggling to raise the funds you need to keep programs going, tell your supporters, and offer opportunities for them to help get those programs back up and running. Tell them when you’re having difficult times as well as when you succeed in a project or a campaign. As invested individuals, they’ll want to be kept up to date.
Be sure you have an extensive communications strategy that allows you to keep supporters updated with the goings-on at your organization, show the appreciation they deserve when they contribute, and steward them for continued support in the future.
If you’re looking for a place to get started, we recommend looking at communication letter templates. Fundraising Letters has some free downloadable ones to kick off your efforts. You may not use the letters verbatim, but you can use these templates to make sure you don’t miss any vital information when you conduct your own outreach.
5. Keep Accurate Records
It seems that the only predictable thing about the COVID-19 pandemic is that life remains entirely unpredictable. Therefore, one of the best things we can do is prepare for learning in the future.
Throughout these difficult times, keep detailed records of your finances, campaign successes, stewardship strategies, and any other initiatives. Make sure that your data is clean and that you can pull accurate reports that will show various insights into your strategies from this year.
You can use these insights to plan your strategies for 2021 and find a little more stability moving forward.
Of course, there is another reason you should make sure all of your data—especially financial data—is clean, organized, and accurate. That reason is taxes.
Tax season will be here before we know it for nonprofits with a December 31st fiscal year-end. Instead of adding on more stress to your organization’s many initiatives, be sure you have all of the information you need organized intuitively so that you can draw from it when preparing your Form 990 and any related state filings (or providing it to your accountant to prepare those filings).
Keep in mind that you may need to pull additional information for your taxes with regard to the CARES Act for nonprofits. This guide discusses the various programs that were a part of this governmental initiative. It can be used as a reminder about the initiatives you may have utilized earlier in the year. Be sure to keep records of any programs in which your nonprofit participated as you’ll likely need to record aspects of them on your Form 990.
The COVID-19 outbreak has been difficult to say the least. In the beginning, nonprofits found themselves scrambling to keep up. Now, many are just trying to readjust and find their place in this “new normal.” These tips should help you on your way. Good luck!
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