The 501 S(c)ene

The latest view on not-for-profit accounting issues

COVID-19: What should nonprofits focus on during this time?

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There is no doubt COVID-19’s impact is like nothing we have experienced from the food and toilet paper shortages to the state mandated closures of non-essential businesses and schools. There is so much uncertainty as things are continually changing day by day. Nonprofits are not immune to the impact of COVID-19. In fact, they are probably one of the industries to feel it the most. It is during these times of crisis that nonprofit organizations experience an increased need for services and a decrease in funding and support. The two main things organizations should focus on are communication and finances.

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COMMUNICATION

It is often said that communication is key and that holds especially true in challenging times. Nonprofit organizations need to communicate with a variety of groups such as employees, board members, donors, those they serve and volunteers. The communication should be focused on their mission – how they are able to continue to provide services while responding to concerns over COVID-19 exposure. These various groups will have many questions so the nonprofit should have a way to get the right information out to the right groups quickly. The nonprofit may consider creating a crisis management team to determine the right message to send out. Having a designated group be responsible for getting the needed information out can help ensure that the message is accurate and consistent across all lines of communication.

FINANCES

There is no doubt that all organizations are going to be financially impacted by this virus. Many are forced to cancel scheduled fundraising events, which for most is where a substantial amount of donations is received. Some nonprofits may even have to take a loss on event expenses that have been paid if they aren’t able to reschedule the event. Additionally, with the downturn in the stock market donors may pull back on their support as they wait and figure out what the financial markets are doing. It’s not all gloom and doom though. The government has allocated funding to help those affected by the coronavirus and there is no doubt that nonprofit organizations will be recipients of some of this funding. There are also many grant making foundations and large corporations that will be providing support to those affected by COVID-19. Nonprofits should develop a plan or strategy, with the help of their board members and financial advisers, on the best use of its current resources as well a plan for applying for additional help with the government and grant makers. Time is of the essence as so many other companies and nonprofits will be vying for the same pot of money.

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During this unique and challenging time, nonprofits should be able to adapt to changes that seem to be happening at a fast rate and keep those lines of communication open.

For more information and resources for nonprofits during COVID-19, see our coronavirus page. Feel free to contact your Henry+Horne tax adviser with any questions or concerns.

For information on how Henry+Horne can help your nonprofit, head over to our Industries page.

Sharlynn Garza, CPA