NONPROFIT SURVIVAL GUIDE: Weathering the Recession

As an audit manager of a small CPA firm, I frequently interact with and perform audits for nonprofit organizations. As such, I have seen first-hand the impact the recession is having on these entities. Over the past year and a half our economy has faced several events which have not occurred simultaneously in over 20 years:

· Significant decline in the stock market
· Rising unemployment
· Deterioration of the housing market
· Decreases in production and sales

The Nonprofit Finance Fund recently completed a survey of more than 1,100 nonprofits. The results indicated a distinct financial vulnerability. Some of the findings are astounding:

· 31% of nonprofit organizations surveyed don’t have the operating funds to cover more than a month worth of expenses; another 31% cannot cover three months’ worth
· Only 16% foresee being able to cover operating expenses in 2009 and 2010
· Just 12% expect to operate above break-even in 2009

http://www.nonprofitfinancefund.org/details.php?autoID=177

These findings should prompt nonprofits to consider what this recession means and what can be done to reduce their risk. Here are a few tips for weathering the financial crisis:

· Make sure your money is safe. Is it insured? Are your investments diverse enough?
· Cut costs. This can be as simple as reducing office perks or cutting office supplies such as paper – use email/digital copies instead.
· Two words – social media. Start marketing your good deeds. Spreading awareness may lead to unexpected donations.
· Keep your annual donors and supporters happy. Write personal thank you notes or make a brief phone call.
· Have a contingency plan for cutting costs. Can you employ more volunteers? Can board members contribute in more technical manners?

If nothing else, keep in mind that this recession can be used to improve efficiencies and sharpen the organizational focus. Make wise choices with the funds you have and you may just find that you have weathered the storm.

--LeAnn Carlson