Financial planning in times of uncertainty

There is a lot of uncertainty at this moment- the presidential elections, the pandemic, the future of the economy. Each of these events individually represent critical inflection points for many nonprofits, and when combined, mark earth shifting realities organizations must tackle.

As a nonprofit leader, you must ask yourself and your team difficult questions to ensure you can navigate uncertainty:

  1. How is our cash flow? Given that nonprofits generally have non-linear revenue, it is critical to assess whether your organization have the cash on hand to meet payroll and other operating expenses? If you have an accountant or bookkeeper on staff, they can prepare a cash flow statement for you. If not, check out my sample cash flow template.
  2. Are there any redundancies in our expenses? As all of us have shifted our work to be remote, which also impacts our spending. Therefore, it is important to review each and every line item and determine what are expenditures that must remain, what are new expenditures you anticipate incurring with a remote work model, and what are expenditures that can be cut. Have these numbers clear in mind so you can make a case to the board.
  3. What scenarios do we need to prepare for? Since the uncertainty of this moment has far reaching impacts, it is critical to think through potential scenarios that could play out with your funding and with your programming. Bring together a core group of organizational leaders to map out potential shifts in anticipated funding and changes in the way programs will be delivered.

This unprecedented moment requires that we adapt. It can feel scary and overwhelming, but through uncertainty comes growth and a reimagining of yourself and your work. By shifting our work to meet the urgency of this time, we can help our organizations navigate this storm and emerge stronger.

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