IPA Blog

Nonprofits Are (Like) Businesses Too

Friday, May 22, 2020

This IPA guest blog is authored by Jenna Wachtmann, vice president of Ball Brothers Foundation. This blog was originally posted by Shafer Leadership Academy and is shared here with permission.  An IPA member, Ball Brothers Foundation is a family foundation dedicated to the stewardship legacy of the Ball brothers and to the pursuit of improving the quality of life in Muncie, Delaware County, East Central Indiana, and Indiana through philanthropy and leadership.

 

Prior to joining the staff of Ball Brothers Foundation, I was a fundraiser for a neighborhood-based social service agency serving families impacted by deep inner-city poverty. I spent my days juggling grant deadlines, meeting with donors, developing new programs with staff, and, generally, running around like my hair was on fire. I started my job in 2007, not long before the world economy began to collapse. We raced to meet the needs of neighbors impacted by the “great recession” and unemployment, hunger, utility disconnects, and more as the demand for services skyrocketed.

As trying as those times were, they taught me many lessons that have helped shape my beliefs about nonprofit management and philanthropy. I had the great fortune of working with a team of smart, dedicated, innovative colleagues who worked tirelessly to re-imagine our traditional models of service delivery. We were also led by an Executive Director who had vision, who empowered his employees to excel, and who ran our organization with deep care for our neighbors and a very sharp business sense.

The COVID-19 pandemic is certainly different in many ways than the economic collapse a decade ago. But what’s not different? Just like a decade ago, we desperately need our local nonprofit organizations to carry-on their vital services and be creative in re-imagining the ways they serve our communities.

Just like small businesses—which have been in the news a lot lately—nonprofits are under incredible pressure right now. Having a sharp business sense is crucial. So whether you work for a nonprofit or serve on a nonprofit board, here are a few things to think about:

Is our leadership and board asking the hard questions that need to be asked? Is there anyone missing from our board?

There’s no such thing as a “business-as-usual” approach during times like this. It is critical for nonprofit board members to be stepping up, asking hard questions and working together to support staff in finding answers. Will our insurance policy cover losses related to COVID? What’s our estimated loss of event revenue for X and what steps can we take now to offset this loss? Should we be pursuing funding via the new federal emergency and stimulus programs? What does our organization’s condition look like 3 months or 6 months from now? This is also a great time to look at the make-up of your board. Do you have bankers, healthcare workers, accountants, lawyers, marketing/public relations experts, other experienced nonprofit leaders, remote technology pros, or small business owners on your board that can lend their expertise?  

How can we better serve our clients/constituents/neighbors?

The best nonprofits—and businesses—are those who never get comfortable. They are deeply in-tune with the needs of their customers/constituents, and they seek constant feedback to inform continuous improvement. Every Friday during our staff meeting, BBF staff discuss these questions: What can we do to better serve our grantees? How can we better communicate? Is there anything we need to do differently next week? This has become a regular agenda item since the COVID crisis began….and it’s something I expect we’ll continue for a long time.     

What is our cash flow situation? How many days of cash do we have on hand? What are our fixed costs versus variable costs?

As the old saying goes, “cash is king.” It’s absolutely critical for nonprofit leaders and board members to have a strong understanding of cash flow and cash position, especially now. Can you clearly articulate exactly how many days of cash your organization has on hand? Does your organization have a sense of which costs are fairly fixed (can’t do much to change in short term) or variable (may be optional or adjustable)? Does your organization have reserves or a line of credit? If not, now’s the time to ensure that everyone at the management and governance levels is crystal clear about where your organization stands financially. You can’t plan for the future without a strong sense of exactly where you stand right now.

What’s our Plan A, B, and C? What outside help can we get to think through the next 3-6-12-24 months?

If there’s one thing that is certain about the COVID-19 pandemic, its uncertainty. But that shouldn’t stop you from thinking about the future. The “recovery” phase of COVID is likely to be long and challenging—things aren’t going back to normal anytime soon. Remember, this is a marathon—not a sprint. Creating flexible plans and scenarios are extremely important. Having an outside advisor to help you think through finances, HR, fundraising strategies, service delivery models, and more may be crucial. Any good entrepreneur knows the limits of his/her knowledge and seeks outside help. Nonprofits can—and should—do the same. Reach out to the team at the Innovation Connector. Check out the low-cost services of Indiana Youth Institute. And reach out to your local funders to keep us in the loop on how your organization is doing right now and what’s on your mind as you look to the future.

Remember, as nonprofits, we know how to work together in good times and challenging times. Today, nonprofits are needed to be extra strong for our communities. Keep in contact with your colleagues and keep taking care of yourself too.


Jenna Wachtmann, vice president, joined the Ball Brothers Foundation staff in 2014 after working in fundraising and program development for social service agencies in St. Louis and Indianapolis. She also completed an internship with the U.S. Department of State, Office of Innovation. She is a graduate of Abilene Christian University and holds both a certificate in nonprofit management from the School of Public and Environmental Affairs at IUPUI and an executive master of arts degree in philanthropic studies from the IU Lilly Family School of Philanthropy. As vice president, Jenna supports the foundation’s president and COO in strategy development, communications, and day-to-day management of operations. She also works directly with the foundation’s grantees. Learn more about BBF at: https://www.ballfdn.org/

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