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Friday, Dec 8, 2023

Nonprofits Need Forward-Thinking Decisions, and Funds

The current financial and public health situation is bound to place a strain on nonprofit organizations.

At the same time, such organizations will be called to meet San Diegans’ needs.

Below are two articles. First are some thoughts for community leaders who serve on nonprofit boards. Following that is an update on a San Diego Foundation fund-raising initiative, current as of March 17.

The following is taken from an article titled “5 Things Every Nonprofit Board Should Be Doing in Response to Recent Turmoil” by Laura Deitrick, Ph.D. and Bob Beatty. It is reprinted courtesy of the University of San Diego Nonprofit Institute.

Current and unprecedented events bring to mind the impact of the 2007 global recession on the nonprofit sector. At that time, research conducted by The Nonprofit Institute at the University of San Diego found resilient nonprofits tended to credit their success to one common factor: a prepared and forward-thinking board.

As we consider and deal with the many effects of COVID-19 on our work and personal lives, we who serve on nonprofit boards must not forget our governance responsibilities. Given the rapidly changing health and economic conditions in which nonprofits are currently operating, it is likely board members will be called upon to quickly make choices with important and lasting organizational effects. When the urgency of a situation calls for swift action, proactive leadership is essential.  The following 5 action items provide guidance for nonprofit leaders and board members to navigate their organizations through these times of uncertainty.

  1. Reaffirm your Duty of Care for the organization by communicating a need for thoughtful, measured, and informed responses. Essential to the duty of care is sound decision making. Boards or committees may need to have special meetings or meet more often as conditions evolve. Now is a good time to establish virtual channels for regular communication, most likely using tools such as Zoom or teleconference. Discuss communication strategies with the staff to ensure the board receives all the information (especially financial and program data) needed to make decisions.
  2. Identify the primary risks facing the organization due to social distancing, stock market impact on reserves, and impact on program participants and staff from missed work or reduced funding.

Some things the board can do right now include:

• Engage in scenario planning. Determine short term impacts of things such as cancelled events, shifting donor priorities, and changes in demand for your services. Reforecast your current budget based on any new assumptions.

• Consider the possibility of funding additional sick time for staff, including additional cash impact caused by reimbursement for any newly passed legislation for payroll tax cuts and sick leave reimbursement

• At any given time, most nonprofits have fewer than 2 months cash reserve on hand. Assess current reserves given stock market fluctuations and talk to your bank about loans. Consider drawing on any short-term lines of credit to increase balance sheet liquidity.

• Talk to landlords and other vendors about stretching payment terms should you predict or experience any cash flow interruptions.

• Review employment policies and risk management protocols to protect your employees and clients. Ensure that your nonprofit is positioned to follow all CDC guidelines.

  1. Communicate transparently and honestly about the expected impacts on your stakeholders and your organization. Speak honestly with your employees about their needs during this time.  Employees with underlying health issues and those over 60 years of age may need special accommodations. At the same time, they may feel pressured by the need to earn a living or support the organization in its work.  Create a culture of support and emphasize the need for open communication about employee needs. Plan for potential disruption should childcare become an issue for your employees and those that you serve. Make sure that the appropriate representatives speak openly and in a timely manner with major donors and contractors about your ability to meet your obligations given the demands of the current operating environment. If cash flow becomes a problem, be honest with funders about your needs.
  2. Coordinate with the larger community including other nonprofits, funders, vendors, staff, and local government to understand how to support each other through this period of turmoil. Your local county (e.g. The County of San Diego) and the CDC web sites provide detailed and up to date guidance for businesses, employers, and community sector support organizations. If you find you have an excess of capacity or a resource you can share with a different organization (e.g. space, volunteers, employees, technology, expertise) consider making it available to others.
  3. Keep your long-term mission at the forefront of decision making.

Separately, the San Diego Foundation offered an update on fund raising.

The foundation announced on March 17 that its San Diego COVID-19 Community Response Fund reached $2.3 million in donations as more partners joined in support, including NEWS 8 and Alliance Healthcare Foundation.

The San Diego COVID-19 Community Response Fund, created in collaboration with a coalition of philanthropy, government and business partners, will rapidly deploy flexible resources to support programs and organizations addressing the effects of the coronavirus outbreak across San Diego County, particularly for communities disproportionately impacted by COVID-19.

“Now, more than ever, it’s important we come together as one community to help each other,” said Mark Stuart, president & CEO of the San Diego Foundation, in a statement. “The outpouring of support we are receiving from partners and donors, large and small, is a positive sign of hope. Every donation is being used to support nonprofit organizations providing vital services and resources to San Diegans most impacted by the coronavirus.”

Individuals and organizations can donate and find additional information about the San Diego COVID-19 Community Response Fund at SDFoundation.org/COVID19.

As the official media partner for the San Diego COVID-19 Community Response Fund, NEWS 8 will share important information about the fund and its impact. NEWS 8’s parent company, TENGA Foundation, also donated $30,000 to the fund to support San Diegans in need.

“San Diegans care about one another, especially in times of need,” said Alberto Mier y Teran, president and general manager, KFMB Stations. “NEWS 8 is proud to support the San Diego COVID-19 Community Response Fund to help our most vulnerable neighbors impacted by this ongoing health crisis.”

Alliance Healthcare Foundation announced a $400,000 donation, which includes a $200,000 matching component to inspire additional giving. A portion of the donation will be used to support nonprofits that are experiencing gaps in contract funding, delayed fundraisers and other challenges.

“We deeply appreciate the leadership of The San Diego Foundation, San Diego County leadership, the business community and other funders who are taking immediate actions to make responsive funding available to those in need,” shared Sarah Lyman, executive director of the Alliance Healthcare Foundation. “We stand strong with all our community partners and will continue to proactively work to do our part in keeping our community safe and well.”

Grant funding will focus on three critical areas: food security; rental and utility assistance; and income replacement or gap funding. A new category of assistance has also been added: no-interest loans for nonprofit organizations to provide business and community service continuity.

The San Diego COVID-19 Community Response Fund at The San Diego Foundation was created in partnership with San Diego County Supervisor and Co-Chair of the COVID-19 Subcommittee Nathan Fletcher, San Diego Gas & Electric, United Way of San Diego County and San Diego & Imperial Counties Labor Council.

One hundred percent of donations to the San Diego COVID-19 Response Fund will be provided to nonprofits helping San Diegans impacted by the coronavirus. Funds will be released on a rolling basis as fundraising continues throughout the coronavirus outbreak and its recovery phases.

More information and continuing updates on how local charities are currently assisting in the COVID-19 crisis are available on the San Diego Business Journal website: www.sdbj.com.


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