Nonprofits and COVID-19: What is Your Strategy?

5/4/2020 - By Emily Lalas

As the COVID-19 crisis continues to have major global impacts, we expect that nonprofits will be among those most impacted as local economic impacts will likely cause a great increase in the need for services and assistance that nonprofits are uniquely positioned to provide.

Navigating the plethora of guidance and resources that are likely flooding your inbox daily can prove challenging, and at times overwhelming due to:

Planning for the unexpected increase in demand for services,
Navigating changes in the scope of services offered and operations due to social distancing guidance,
Uncertainty about your organization’s operations and impact on future funding sources.

We'd like to make sure that as many organizations as possible are aware of the resources and tools that are available to aid you in making informed decisions as you plan your COVID response. We have put together a checklist of topics and related resources that you may want to consider when creating a response plan that best suits your needs and enables you to continue providing your services to the greatest extent possible during this time.

Build Your Team

Now is the time to collaborate as much as possible. Make sure to engage your Board of Directors and trusted advisors during your response planning process. As you begin to develop a response plan, call your CPA or attorney. Valuable insight and direction from a trusted professional who knows your organization’s unique composition and services will save time and eliminate sifting through the never-ending sea of resources and information being published right now. Be open and honest about your immediate challenges as well as the challenges that you expect to face soon.

Identify Program Impacts and Organizational Concerns

Identify the unique impacts that COVID-19 will have on your organization’s operations and various programs. Consider the following discussions with your COVID-19 response team:

Which programs do you expect to be most impacted?
Have some programs needed to be shut down completely?
Will you be able to maintain the costs associated with payroll and other administrative needs?
How will future funding be impacted by the changes in nature or the amount of services being provided?

When do you expect those funding changes to take place?

Do you have any grant matching, enrollment, or participation requirements that may not be feasible to meet as a result of COVID-19 changes?
Consider the impact COVID-19 has had on the population that you primarily serve.

Do you expect these impacts to increase the amount of people which will now qualify and need the services that your organization provides?
Do you expect there to be an increase in the amount of resources or services that you provide to the people that you currently serve?

Are you able to expand your programs to meet any new needs that your community, or surrounding communities, may now have as a result of the crisis?

Now, Where, How

Conducting a Now-Where-How analysis is helpful for any strategic planning and can be extremely helpful in aiding the response team in developing a crisis response plan.

Now - Analyze where your organization is now in terms of services being provided, staffing levels, sources of funding, and various programs in operation.

Where - Use your stated purpose to decide what best makes sense as far as direction for your organization during this time and after. Consider these:

Are you able to offer your services in a virtual setting or via a different setting?
If your organization cannot continue one program, can resources and personnel be reallocated to another program that can still operate?
Are there other organizations that you can partner with to combine resources to continue providing services?
What will your fundraising campaigns look like this year?
Can you adapt in-person events and campaign remotely or ask for support in new ways? This may even present an opportunity to cut back on some of the costs historically associated with the production of events.

How - Gathering resources and implementing your plan effectively.

Gather Resources

The resources available to help organizations navigate the crisis seem to be changing daily, including guidance related to those programs. As stated above, now is a great time to reach out to your CPA or other trusted advisor who is staying current with the programs, as they may have groups, email subscriptions or “one-stop-shop” resource hubs to serve as a central place to visit for information that you can rely on, and they can keep an eye out for resources that may apply to your unique needs. Saltmarsh has developed a COVID-19 resource hub page which can be accessed here. Make sure to subscribe for frequent updates sent directly to your inbox. Consider exploring the below resources, which may be of value to nonprofits during this time.
CARES Act Resources - The CARES Act includes several programs that nonprofits may be able to utilize in order to meet payroll and administrative costs during the crisis. Additionally, several tax provisions have been provided including credits for retaining employees and the choice to delay certain payroll tax payments. Click here for further information about how the CARES Act specifically helps nonprofits as of April 3, 2020. To check the most recent status of SBA CARES Act programs, see the U.S. Treasury’s website here. Click here for a summary of COVID-19 loan programs to help aid in your decision-making process.
Check with the governing agency who issued and monitors your grant to determine if any special provisions have been made to allow flexibility in qualified use of funding. Many agencies have issued guidance specific to COVID-19 with direction on how program operations can be altered to continue providing the service, and how funding may be repurposed to meet community needs while staying within the allowable cost principles surrounding your program’s funding.
Determine deadlines. Many agencies are allowing extensions for reporting submissions such as 990s and audits. While extensions may give your administrative team some much-needed breathing room during this time, remember that delayed reporting could result in negative consequences if donors and grantors do not have current documents to rely on when responding to funding requests.

Implement

Communication during this time is critical. Make sure to clearly communicate your plan of action with members of all levels within the organization.
Assign action items for your plan to individuals within your organization, with deadlines for completion.
As with any strategic decision, be sure to check with grantors, donors, and your CPA to make sure you understand the impact that use of these resources, particularly any forgiveness of loans achieved, may have on your organization’s allowable program cost basis and future program funding.
Engage your donors and your community! Although times are changing, and we cannot be together in-person for the time being, it is still as important as ever to ensure that you are engaging with your top donors and the community that you serve. Make sure to keep them up to date on changes in operations, your efforts to continue operating and serving the community during this time, and any additional or immediate needs you may have. You may consider reaching out to specific donors to ask for flexibility in the use of their donation to carry out your response plan.

These unusual times present challenges for almost everyone, however, through collaboration and strategic planning, nonprofit organizations can overcome those obstacles and continue meeting the needs within their communities to the greatest extent possible.

QUESTIONS?

If you have specific questions, please reach out to your engagement shareholder, manager or another member of our nonprofit team. Visit our COVID-19 RESOURCE HUB for ongoing updates and information. Due to the ever-changing nature of this event, you should always consult the appropriate professionals.

About our Author | Emily Lalas
Emily is a staff auditor in the Audit & Assurance Services Department of Saltmarsh, Cleaveland & Gund. Her primary areas of expertise include providing audit and assurance services for a variety of clients. Prior to joining Saltmarsh, Emily worked in bookkeeping and office administration for a regional law firm.