Crisis leadership is not something that most of us signed up for as we entered the nonprofit sector. And yet whether we have led through crisis before or not, we find ourselves facing a huge crisis scenario now with COVID-19. Can we make payroll? Will we be able to re-open our doors to provide services for our seniors, our youth, our most needy, can we provide any educational programs effectively online or perform environmental restoration? Nonprofit organizations drive human connections, and for many of us, these are difficult to achieve with remote technology, even where available.
With the emergence of the global pandemic, we at Jan Glick & Associates have been thinking about the precarious foundation upon which many nonprofits existed even prior to COVID-19. Unfortunately, nonprofits were and are facing existential issues that are not widely covered in the mainstream media coverage of COVID-19, despite the significance of the nonprofit sector in addressing the human cost of COVID-19. Yet just like the restaurants, airlines, and other industries whose survival is now mainstream news, the risk to nonprofit survival is just as dire. Nonprofit organizations must continue to provide a basic safety net and civic connections that are more needed during this unprecedented time and will be more needed in the future as we repair the damage to our communities. This is especially true when considering that anxiety and depression and the need for economic and human services supports are growing exponentially, and will likely grow after COVID-19 passes through our global community. Our human service providers, recreation organizations, arts and culture nonprofits and many other sectors help ensure support, recovery, civic connections and positive environments. We are acutely aware of a recession that is already hurting incomes that will probably force more people into poverty with a greater need for services that they can’t afford and our very human need to promote joy and connections and the stuff that makes life positive.
In response to the crisis, many nonprofits are seeking loans and other relief through the initial COVID stimulus packages passed by Congress. The Federal CARES Act and Payroll Protection Program is a very helpful short term stimulus, providing several weeks of what amounts to an unrestricted federal grant (converted from a loan) for many nonprofits that apply for it. This is one step in a crisis response that some nonprofit leaders see as providing immediate relief (though some nonprofits may not be able to take advantage of this due to various restrictions or business models).
Yet looking beyond the short term benefits of the Payroll Protection Program, and other short term survival strategies (including use of reserves, cost cutting, layoffs and furloughs of staff and temporary suspensions of operations), much of the nonprofit sector will be facing very hard decisions about service continuation later this year, particularly if public health strategies to contain future localized outbreaks require additional stay-at-home orders and social distancing. Organizational resilience will be defined not only by an organization’s reserve levels at the beginning of the crisis, and how well they are able to retain or re-hire staff, but also by how prepared they are to analyze how a recession and ongoing public health concerns will likely impact the long term future demand for their services, and plan their future accordingly, perhaps at a reduced scale or with a creative approaches to service delivery that appropriately incorporates technology or other strategies that we are now using every day. In a way, this is a type of sustained ‘crisis planning’ – not one based on a singular event, but a series of shocks to organizational operations that may continue well into 2021 and beyond.
Organizations that are most prepared for such analyses and decision making, and that do a good job planning right now for a post-COVID-19 world, will have greater options. They will be in a better position to negotiate with funding agencies. If they are seeking partnerships or even a merger, organizations will do best to plan now for scenarios that retain the greatest possible level of remaining assets (programmatic, people, brand, etc.) and not just financial assets. Organizations with the highest possible assets will most interest potential partners, as partners generally do not want to bail out a nonprofit that has only nominal resources. As such, planning now for long term service continuity will be very time-dependent for many organizations.
While it is too early to predict what the world will look like in 2021 and beyond, one thing is clear: We are likely to see re-shaping of the nonprofit sector. It is our hope that funding partners, both government and philanthropic, will thoroughly understand the precarious position that so many nonprofit organizations are experiencing, not just now but increasingly over the past 50 years. A strong nonprofit sector is critical to civic recovery, locally and globally. Nonprofit organizations facing the future will derive their greatest strength in effective planning right away, with support from partners, and advocating for a sustained and collective role in assuring the health and welfare of our communities moving forward to a post-COVID world. In the meantime, the role that nonprofits are playing in trying to maintain absolutely critical programs is nothing short of phenomenal, and we salute the boards of directors, executive leadership and frontline staff who remain committed to their mission-driven work. Stay safe and be healthy and know that you are appreciated.