A Spreadsheet Helps 

As reported on by The Minnesota Star Tribune, and the Minnesota Council of Nonprofits in its recent Nonprofit Conditions Report: nonprofits are facing financial crisis. Increased costs, fluctuations in charitable giving, and the end of COVID relief funding are among the factors contributing to the financial situation facing nonprofits.  

As a nonprofit lender and financial specialist, I have been heartened to see so many nonprofit leaders working to find creative and adaptive solutions for this moment. As the need from our communities continues to grow, so does our nonprofits’ increased demand for services.   

Having talked with many nonprofit leaders applying for loans, planning for year-end giving, and approaching budgeting season, I want us to remember that we have autonomy in this situation. Of course, we need capital and support now. The funding mechanisms haven’t caught up to the cost of running a nonprofit. But I am also of the firm belief that the only way nonprofits are going to be sustainable is when we invest in ourselves. Here’s a few places I think we can start: 

Back to Basics (or Fundamentals) 

It will come as no surprise that I am talking about the Fundamentals of Nonprofit Finance.  

One night, I was alone in my office worrying about the financial state of a nonprofit I worked for. The thought I kept having was, “this is bad.” I didn’t know how bad, or what bad meant. As I sat there looking for solutions, I realized I didn’t have a critical tool. I did what I would tell any other nonprofit financial leader in my situation: I made a cashflow statement. When you’re spinning out of control, honestly, a spreadsheet helps.  

What was large and scary in my head, was an action plan on paper. Over the course of a few hours, I created a tool for myself, and my Executive Director. The coming weeks and months were not easy. Action is hard, and it impacts people whether it is you, your staff, your board, or your program participants.  

I encourage you to do the same and know that you aren’t alone. Nonprofit leaders are creative, smart, and technical. Now is a good time to remember the power of a realistic budget. We know that funding sources are going to be conservative, and it is important to focus on realistic forecasts so you can make strategic decisions.  

Board Engagement

Now is a time for great community care and that starts with boards showing up and paying attention to the nonprofit leaders they are supporting.  If you are a board member, show up and listen to staff. Your role is to be a thoughtful partner in solving financial challenges.  

Propel offers board trainings if you are new to serving on a board.  I encourage you to check out our upcoming trainings for support on how to be the best board member you can be.   

During this time, I encourage board members to ask, “How can I be of service?” instead of “What are you going to deliver?” I am always going to remind board members to ask this question, but I feel especially strongly about it right now.  As a board member myself, I am also asking the question of how to focus on governance and less on management.  What staff need is partnerships and support in this time of flux.   

Be Creative 

Despite the financial constraints the sector is facing, leaders are continuously finding innovative ways to fundraise and collaborate. Examples of such initiatives include joint fundraising efforts and a shift towards community-centric fundraising models. 

These creative approaches exemplify the adaptability of nonprofits in the face of adversity. By embracing new strategies and fostering a spirit of collaboration, nonprofits are growing stronger and more sustainable.  

So, What’s Next?

 As we look ahead, resilience and innovation will be the cornerstones of our progress. Nonprofit leaders and board members must continue to engage deeply, ask the right questions, and support one another. By harnessing creativity, fostering community-centric approaches, and maintaining a realistic yet optimistic outlook, the sector can navigate these challenging times and emerge even stronger. 

If you’re ever in need of a nonjudgmental partner and cheerleader, please reach out to me, or any of my colleagues at Propel. Remember, our resources are always free, and our trainings are available on a monthly basis.