Surviving COVID-19: 6 Recommendations for Nonprofits and Funders
We are in the midst of the 2019 novel coronavirus (COVID-19) pandemic and our lives are evolving on an almost daily basis. Industries globally are feeling the financial effects of the virus. The travel industry, for example, which is comprised of airlines, hotels, and parts of retail, restaurants, and technology is estimating that the drop in the industry’s economic activity could be as much as US$1 trillion. And the music and film industries are each projecting a US$5 billion loss. Millions in revenue are being lost daily across most industries.
And in the nonprofit sector, the revenue losses continue. Many large-scale nonprofit conferences, convenings, galas, and meetings have been canceled, and more events are expected to be canceled this month. Thousands of event registrants are being notified almost weekly of cancellations. More intimate in-person meetings are also being canceled or postponed. Many organizations have closed their physical offices and asked their staff to work remotely. The coronavirus outbreak is fast-moving and has disrupted organizations and our lives generally. We are in a novel holding pattern, and for many people and organizations, panic and uncertainty have started to set in.
Unfortunately, no one knows exactly when this pandemic will end. I do know, however, that the only thing that can carry us through this time is resilience – of people and of the organizations we build. We are built to withstand adversity.
As with any other crisis, the COVID-19 outbreak needs to be effectively managed by leaders who are supported by strong infrastructure consisting of robust systems and engaged people with sufficient capacity. In that way, this crisis is not so unique, and it may not be the last crisis we encounter. At this point, many nonprofit organizations are unable to determine whether their systems, operations, and programs can survive this or another crisis and are struggling to keep their heads above water, so to speak.
Accordingly, grant making, funding, and the evaluation of whether new grants or funding should be awarded should not be suspended in this environment; on the contrary, this funding is critical to the current stability of the sector.
I share six recommendations below that consider efforts from both funders and fundraising nonprofits so that they each have active roles in creating solutions and forging a path forward in this crisis and beyond. In this way, nonprofits are not passively waiting for funders to help them during this pandemic.
My recommendations focus primarily on benefiting marginalized communities that are most impacted when funders and nonprofits face resource restrictions and on people of color-led organizations serving these communities that tend to historically receive the least amount of funding even outside of a crisis; these communities and organizations are often the most vulnerable, particularly in times of uncertainty.
These recommendations are based on my interactions with clients and nonprofit leaders around the globe who are experiencing and responding to this pandemic in their different environments and geographies:
Meaningful conversations. It should go without saying, but funders and nonprofits should be talking with each other about nonprofit sustainability. These conversations should be occurring between funders and their grantees and funders and nonprofits that are not currently receiving funding from the funder, if those nonprofits are critical parts of the ecosystem in which the funder and its grantees operate (see the ecosystem approach recommendation below). These conversations will vary in focus based on the funder and nonprofit. Immediately, however, the focus should be on identifying immediate needs, expense increases, and revenue losses that are significantly impacting the nonprofit’s budgeting, and determining how to stop any financial hemorrhaging, so to speak, occurring within the nonprofit. This initial conversation will highlight the funding already provided and used, outstanding funding, and tracking that funding to meet the grantee’s needs, and will also allow funders and grantees to determine if current grants should be amended to meet those pressing needs. As I have stated previously, grants should be flexible, innovative, and likely for general support so in uncertain times like these, restrictions likely do not need to be removed because flexibility was built into the grant in the first instance. These conversations should also address the nonprofit’s revenue streams. Many nonprofits’ revenue is not diversified. So, when crisis hits, if that homogenous source of revenue is at risk, the nonprofit’s business and financial models and thus the nonprofit’s viability itself is at critical risk. These meaningful conversations should occur immediately and should remain a cornerstone of the grantor-grantee relationship.
Ecosystem approach. The nonprofit sector is interconnected, and COVID-19 has only reinforced this point. Instead of providing a grant to a nonprofit for its singular needs, funders and nonprofits should consider who else within a particular ecosystem may need support. This ecosystem-based funding can still be received by a singular organization, but coordinated among many organizations. This integrative approach better ensures a nonprofit’s sustainability than providing isolated funding to a nonprofit based only on its immediate needs in this crisis...