You have just learned how endowments can create a legacy and stable financial future for your nonprofit. But an endowment or board-designated fund does not guarantee a nonprofit’s perpetual financial resilience.
Strategic planning, diversified funding streams, robust financial management practices and effective operations are critical for nonprofits to weather economic downturns, respond to emergencies, and invest in long-term projects that drive meaningful change. Moreover, demonstrating nonprofit resilience builds trust with donors, stakeholders, and the communities served, showcasing the organization’s commitment to sustainability and effective stewardship of resources.
The following series will assist your nonprofit to achieve a level of nonprofit resilience that ensures the organization not only survives in today’s dynamic economic landscape but thrives.
When the COVID pandemic hit, it proved to be not only a global health crisis but also an economic crisis as many industries ground to a halt. In times of economic stress, nonprofits are uniquely challenged with the double threat of increased demand from their communities struggling to make ends meet as donors hold back gifts until the economy shows some strength. Some nonprofits, which were thought to be robust, ended up struggling to adjust during these unprecedented challenges. However, the strongest nonprofits were able to pivot quickly and some even scaled up by prioritizing the tenets of resilience before the problems hit. The strategies they used to become nimble and resilient did not require any amazing creativity. These nonprofits were also not just lucky. They thrive because they know the chief factors of resilience that can make or break a nonprofit: Funding and Finances, People, Property, Technology and Program Operations.
The following are examples of nonprofits that addressed these five factors before crises hit.
Feeding America
Funding Resilience: This nationwide network of food banks has shown remarkable resilience during economic downturns when the demand for food assistance surges. They have expanded their donor base and sought funding from various sources, including government grants, corporate partnerships, and individual donations.
The Nature Conservancy
People Resilience: This environmental nonprofit’s robust human resource strategies maintained a large network of scientists, conservationists, and volunteers to continue their critical conservation projects virtually as they pivoted to remote work during the pandemic.
The Nonprofit Village
Property Resilience: Located in Maryland, this nonprofit shared office space provides affordable rental options for nonprofits. By sharing a building, these organizations benefit from reduced overhead costs and increased opportunities for collaboration and networking.
Child Rescue Coalition
Technology Resilience: This tech-savvy nonprofit adapted quickly by leveraging tools like Zoom and Slack to continue their operations. They were able to maintain their mission of rescuing children from sexual abuse by leveraging online platforms for training, meetings, and coordination.
World Central Kitchen
Program Resilience: WCK was able to scale efforts and support through partnerships with restaurants and other nonprofits to support food-insecure communities.
These are but a few examples of nonprofits that were not only able to survive through crisis but thrived. We will explore those factors in detail in forthcoming content. Stay tuned!
However, executing a strategy to address these factors does require upfront planning often months before the crisis. Implementing resilience can be time-consuming and costly, especially for nonprofits with limited resources. More importantly, the organization needs to adopt and accept a culture of transparency, in which information about operations, finances, and impact is openly shared with decision makers stakeholders, donors, volunteers, employees, and the communities served. The biggest obstacle to transparency is nonprofit leaders’ fear of scrutiny from donors, regulators and the public that can distract from delivering on the mission. Leaders may be hesitant to engage in self-evaluation or disclose operational inefficiencies, fearing it might reflect poorly on the organization. Despite these challenges, many nonprofits find transparency leads to increased trust and improved stakeholder engagement, ultimately leading to greater strength, agility and resilience.
In the next chapter, we’ll be delving deeper into the factors that drive resilience starting with Funding and Financial Resilience.
Other Resources
In a Crisis, Resilient Nonprofits Tap into Their Superpowers | Bridgespan
The Importance of Nonprofit Transparency and Accountability – Expert Nonprofits
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