In times of financial difficulty, call on your partners
Judy Krause |
Contributed by Judy Krause, MWA Associate, Certified Nonprofit Accounting Professional through the National Association of Nonprofit Accountants & Consultants (NPAC)
The COVID-19 crisis is forcing every organization and business to reassess its financial plan, and nonprofits are no exception. You are making decisions daily about costs, people, programs, operations, and so much more. You are looking at your revenue–what is available and estimating what might come in (or not) in the months ahead. Flexible, unrestricted revenue and cash in the bank is critical at a time like this.
When you look at your financial position, do you have concerns about the amount of unrestricted money you have? Or perhaps you have cash, but it is restricted to a project or program that you aren’t able to execute at this time.
There are two partners you can ask to help you manage your financial situation and contain costs right now:
Your commercial insurance broker: Share your plans for the next month or more, so your broker can help you identify possible ways to reduce insurance premium costs. Potential considerations include:
- Need to reduce payroll? Your workers compensation policy could be adjusted.
- Reducing program volume? our general liability exposure (and cost) could be decreased.
- Letting vehicles sit idle for perhaps months? Consider removing liability coverage temporarily (remember to lock up the keys so no one drives the vehicle!).
- Be open with them about your position and your plans.
- Share with them what your needs are.
- Ask funders if they would release a restriction on an existing grant to allow you to use the funds for more urgent needs.
- Thank them for their support!
Who else in your circle of vendors, partners and stakeholders can you reach out to as you navigate through financial decision-making?