Keeping Your Nonprofit Afloat in Troubled Waters

Nonprofit organizations, like lifeguards, are the first to selflessly jump in and help when a person or community is in harm’s way. Unfortunately, the COVID-19 pandemic has many of us wondering who will jump in if the lifeguards need saving? Nonprofits often have to rely on their own efforts to remain afloat. In a crisis, organizations need to develop a strategic plan that prioritizes equity, streamlines operations, and fosters creativity. I want to help nonprofits do more than just tread water. Let’s look at some methods that, even mid-pandemic, could help your organization thrive. 

Revisit Procedures & Programs

When times are challenging, nonprofits should take the time to review their operational procedures for missed opportunities to increase efficiency or cut costs. Start with reviewing your organization's utility, equipment, software, and other contract obligations to see which may benefit from price comparisons or negotiations with vendors.

Keep your board apprised of any changes that affect the organization’s financial situation, so they can make decisions that will contribute to your organization’s success. Board members may need more frequent updates on profit & loss data, spending and fundraising needs, and budget vs. actual comparisons, making a procedural change necessary. Take a close look at your functional expenses and consider where program adjustments may be needed. Your CPA can help finetune your budget or perform if/then projections and cost-benefit analyses.

Communicate & Educate

Stay in close contact with donors, lenders, other funding sources, and stakeholders. Nonprofits are accountable to their supporters and those they serve, so it is important to communicate openly about how the pandemic has affected your organization and what you are doing to address any challenges. When you speak with donors, don’t be afraid to ask for what your organization needs to maintain operations and achieve your charitable purpose. Your donors are invested in your success, and some may allow your organization to repurpose funds if necessary.

Donors and prospective donors often consult your publicly disclosed resources before making contributions, so take advantage of the opportunity to use ordinary compliance obligations to educate the public and showcase your nonprofit’s mission, values, community commitment, and accomplishments. 

Ensure individuals who itemize know about the temporary charitable contribution limit increased to 100% of AGI. Non-itemizers should know they may take an above-the-line tax deduction of up to $300 ($600 if married, filing jointly) for cash gifts made to eligible charities. Corporations may deduct qualified contributions of up to 25% of their taxable income and may carry over contributions that exceed 25% to the next year. Educating your audience about these charitable giving incentives may persuade some donors to increase their generosity. 

Think Outside the Box

For nonprofits, now is not the time to hide inside your comfort zone. Keep an open mind and consider new and creative ideas. For example, Amazon’s Business for Nonprofits Program may help certain 501(3)c organizations. The program provides a multi-user, tax-exempt account, pricing advantages, and access to COVID-19 Supplies, as well as a charity-specific AmazonSmile landing page to help you maximize your support. 

 “Nonprofits need agility and flexibility to respond to changing community needs. Every dollar spent at a nonprofit represents a choice between funding staff, operations, or programs. We’re here to help you get the job done more efficiently,” states Amazon. 

Ramp up your online presence, use social media to communicate, and get into technology! Programs like Zoom or Google Meet may help you maintain donor and other business communications. Make sure you have the cloud-computing and virtual file-sharing abilities you need to function successfully in a remote business atmosphere. 

Stay In-The-Know

Now, more than ever, nonprofits need a solid understanding of federal, state, and local directives and access to relief fund programs and up-to-date educational resources. Keep tabs on critical websites, such as the Centers for Disease Control and Prevention, Occupational Safety and Health Administration, and your state and local office websites. Nonprofits may find additional information on the National Council of Nonprofits website, and check the Small Business Administration’s webpages for information for first-time borrowers and second draw loans through the next wave of PPP funding.

Nonprofits in Massachusetts can monitor the Mass.gov Coronavirus Updates & Information Page and the Massachusetts Nonprofit Network Coronavirus Resource Center. Stay in contact with your CPA, bankers, attorneys, and other advisors. They can help you understand and comply with new tax laws and legislative changes and provide information about tax benefits and relief options.

My nonprofit industry team at L&H is here to serve organizations like yours. We can assist with budgeting, projections, operational considerations, cost-benefit analyses, and much more. It’s my goal to provide nonprofit services that not only help organizations stay afloat but also help them thrive. Contact me today to get started. 

by Wendi Haynes, CPA

Wendi Haynes, CPA, has extensive experience providing accounting, and auditing, including single audits, and  tax advisory for nonprofit organizations, including human service organizations, charitable and grant-making institutions, cemeteries, foundations, social clubs, and fraternal organizations. She serves as Livingston & Haynes’ Managing Partner and has been with the firm for over 30 years. Wendi has completed the AICPA Not-For-Profit Certificate Program I.