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Preparing Your Nonprofit for a Recession

Does all this talk about a recession make you nervous? Are you concerned with how your organization is going to navigate the recession? What are some things that you could be doing to ensure that you weather the storm? If any of those things have been on your mind, then keep reading.

Let’s first understand that you cannot avoid being affected by the recession. There is plenty of media surrounding how to navigate the recession, how to recession proof your organization, and things of this sort. In this post, you will learn what you can do to prepare.


To start off, you should consider embracing cloud accounting tools and technology. The reason why this is important is because it reduces costs. We should always be thinking about how we can preserve some of our cash when heading for a recession. Embracing cloud technology also improves overall efficiency. For example, if you have a team and it seems like things are redundant, things aren't being done on time, or maybe some of your staff members are overlapping with the work that they're doing, there should be an efficient process in place to help straighten out these kinks. Your organization needs to be able to take stock of who's doing what, and make sure everyone's role is maximized.

Although we’re well into this new digital world, there are plenty of organizations that felt a little shock when the pandemic happened. Many weren’t able to access their accounting records, reconcile their books, or pull reports because the accounting software lived in a desktop application on someone’s computer in the office. At this point, if you haven't embraced the cloud, if you haven't started thinking about how you can move away from some of the legacy tools and systems software that you're using, then you will get left behind. Things will feel difficult and rocky. Thus, this is a primary area that you want to tackle, and start improving on first.


The second thing that you want to do is lean into cash flow management. e will be the first to say how underrated it is. We too could be doing a better job of highlighting how important it is and what you need to be looking for when tracking your cash flow. What do we mean? First, you want to make sure that you're reviewing your expenses consistently. Are there things like tools or software bills, or things that you're paying for that no longer serve the organization? This will help you remain focused on where you can cut expenses.

Keeping this in mind, you want to do an audit of your expenses on a consistent basis. When we're providing clients with their cash flow reports , we're highlighting where their money is going. If we come across something that we think the client really isn't using or no longer needs, we're going to bring those things to their attention. If they find that they don’t in fact need the things we’re pointing out, we can cut that expense, and in turn keep more money within the organization.This is vital because we want to make sure that you have reserves and that you’re only spending where it's necessary.

Another part of cash flow management that you need to be assessing is your funding sources.The organizations that operate mainly using Government funds or reimbursement contracts have to spend first and then get their funds returned. Thus, it is imperative that your bookkeeping and reporting is top notch. Your organization’s books need to be wrapped up in a timely manner so that you may provide the funding reports in a timely manner as well, which returns your money to you quicker. A lot of the organizations that we've worked with, at first, didn't have an efficient process in place, and experienced delays in getting their funding because the bookkeeping was chaotic. As a result, they were missing the deadlines of when they had to provide the funding reports to the funder, which meant they were not getting paid quickly.


It is no secret that you can be worked really hard in this space; whether that be due to being short staffed or due to the work that your organization might be doing in the community. With this, you have to make sure that you are tapping into the culture, that you are looking after your people, that you are encouraging breaks, and you are encouraging them to take time off.

Be sure that you are listening to them, that you are taking stock and inventory of the role that they're playing on the team. Ask yourself: do they have the tools that they need to do their job? When I think about my time as an in house Controller , the majority of my frustration came from not being heard and not having what I needed to do the job. You also want to make sure that when you're thinking about your team, thinking about the workload and thinking about roles and responsibilities. You also want to make sure that your team has clear roles and responsibilities and that they understand what their priorities are. This gives them clear focus and minimizes the feeling of being stretched in a million ways. All in all, a recession typically means resources are super tight. This can mean that sometimes people may have a heavier workload than other times. During these times of uncertainty, let your people know that you care and that you're thinking about how you can best support them.


When you foster the growth of your team members, you're essentially nurturing the future success of your organization. Continuous learning ensures that employees stay updated on industry trends and acquire new skills. As they become more proficient in their roles, they can accomplish tasks more quickly and effectively, positively impacting the organization's bottom line. By providing opportunities for growth and development it shows that you value their contributions and are invested in their future. This can boost morale, job satisfaction, and overall engagement.

Remember, the goal here is to get your organization to the other side. Your people, processes, and cash are what help you to do that. Be relentless in managing them well.


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