How many of you are ready to turn the page on 2020? It has been one for the record books and one we are all ready to see become history. At the risk of overusing a comparison that may have become cliché, the year 2020 may have indeed brought clarity (20/20 vision) for the nonprofit sector.
This past year has allowed (or forced) us all to pause and re-evaluate mission, operations, measurements, and fundraising. While uncertainty may likely remain our greatest threat, the pandemic, election, unrest, and natural disasters have provided a platform for focusing on what matters most as we move in to 2021.
I encourage you to ask yourself 3 questions as you plan for 2021 and beyond.
- Are you still focused on your mission? Evaluate your work against your mission statement. You may have tweaked your work or pivoted services, but you should remain focused on your mission. The work your ministry is invested in is important, and in a time of uncertainty, it becomes more critical to ensure you are fixated on that mission. Be willing to say the difficult “no” to good work that is off-mission.
- How does your balance sheet look? Take a hard look at your finances. Cash-flow, fundraising, and expenditures are where many nonprofit leaders’ attention is right now, and for good reason. We cannot predict the reaction to or even plausibility of large-scale events. Giving last year was not evenly spread across causes. Where some saw a significant influx, there is no confidence that the increase will continue, and, in many cases, development officers knew it was a one-time incremental gift.
Spend time analyzing where you ended 2020. Get a handle on finances and cash flow as well as you can. Forecast what is coming. Again, while difficult to predict, it is an important exercise. Make a plan to conserve cash and cut expenses.
- What does the future hold for your organization? Uncertainty is certain. There are some key steps you can take that have been discussed for the last 15+ years that 2020 may, in fact, be expediting.
- Start a reserve fund. I know, I just said conserve and cut. Think of this reserve fund as an economic shock-absorber, a preparedness fund. Consider opening a Charity Fund at The Signatry and invest this reserve fund to fuel your mission well into the future. Ensure you are positioned to sustain services throughout the consequences of the pandemic and beyond.
- Decrease dependence on events. Focus on personal connection and individual donor programs. Segment donors between general donors, mid-level, and major donors. Connect personally with the mid and major donors in particular and tailor messages to all segments.
- Determine alternative revenue streams. We have talked about this hypothetically for years. What happens if you lose your tax-exempt status? Many donations will stop at worst or decrease at best. How can you generate income outside of donations? A thrift store, modest fees for services, or rent-out unused space? Perhaps you can research grants for some of your services. Are government or foundation grants available for services you provide the public? Diversify your revenue to insulate you from a down economic cycle.
While 2020 brought some things into focus and allowed us to see more clearly, 2021 is still a bit blurry. Emphasize your mission. Evaluate your financial situation. Explore future opportunities for funding – a reserve to fuel your work, individual donors, and alternative revenue options.
Take this moment in time to stabilize your organization’s work by evaluating carefully and planning intentionally.
“Trust in the Lord with all your heart, and do not lean on your own understanding. In all your ways acknowledge him, and he will make straight your paths.” Proverbs 3:5-6
Start your journey towards a lasting legacy
Bring your family together around shared values and goals for generosity through a donor advised fund.Start a Fund