Time For a Six-Month Check-In

By: John F. Gillespie, Nonprofit and Social Enterprise Practice Leader – Charles River CFO

With the restrictive concerns of COVID receding into the background, nonprofits have been returning to their mission and association work more robustly. This positive energy may be offset by the tightening labor market stretching staff even thinner, as well as the reality of inflation impacting all costs, including salaries. Flexible staffing and the ability to model various operational and financial strategies are critical right now for success. Over the next six months, nonprofits will need to consider what is required to respond to a future that may be financially challenging but hopefully without dramatic economic swings.

Here are several strategies to consider now.

  • Explore new ideas for earned income that set you apart from others. What about a new service or location if you have a strong brand?
  • What is not critical for the next six months? Can a new project, staff development program, or new hire be pushed out six months?
  • Now is the time to start if you are not doing monthly cash flow forecasts projecting out at least three months.
  • Are you getting accurate monthly financial statements on time and having actional data to make decisions?
  • Develop three budget scenarios for 2023. One with expected revenue, one with 20% more and one with 50% less. Model various organizational outcomes at these different revenue levels.
  • Assess your current level of risk and evaluate appropriate levels of insurance. Don’t underestimate the importance of cyber insurance.
  • Review staffing to understand who are the top performers and what is needed to retain them. Evaluate ways to engage them in new responsibilities, invite them to present to a Board meeting, and provide more opportunities to be leaders and have their voices heard.
  • If you think a headcount reduction plan is in the future, make sure you fully understand all the state and federal requirements as well as the best way to implement.
  • Conduct a vendor review to ensure all the terms and conditions are well understood and determine if payments could be optimized. Pay on time, not early, to retain cash. Or negotiate a discount if payments are made before the due date.
  • Mine your donor database to match messaging and additional giving options to appropriate donor segments.

Move forward or fall behind. Those are the only choices. Be proactive. Have an excellent financial/cash model in place but execute your plan. Inaction is not the optimal course. We are at the six-month mark for 2022. Where do you want to see your organization at the end of December 2022?

About Charles River CFO

Charles River CFO (CRCFO) provides outsourced finance, accounting, tax, HR, and recruiting services to nonprofits throughout the eastern seaboard from Maine to Washington D.C.

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