The Business of Non-Profit Organizations In the Age of the Coronavirus
Our Message: Don’t Stop Fundraising
If you’re over 60 years old, you’ve lived and worked through five economic recessions, Black Friday in 1987, the 9/11 terrorist attacks in 2001, the sub-prime mortgage real estate crash and the subsequent Great Recession of 2007-2009. Yet, most of our workforce in Georgia, and throughout the nation, is under 50 years old and they have only experienced 9/11 and the Great Recession.
In previous recessions there were underlying issues with the economy; and even with 9/11, it occurred during a Recession, and the terrorists’ intention was creating chaos in American business. Hence, the symbolic target of the Twin Towers of the World Trade Center, where many of the world’s great businesses were housed and headquartered. One of the aspects of the COVID-19 pandemic is that it is a non-economic related crisis. Instead, it is, and has been, a healthcare crisis with economic implications.
So, how does this affect the Non-Profit Organizations (NPOs) in Georgia, and indeed, around the country?
NPOs serve the public good in a wide variety of ways, from local hospitals and healthcare institutions to arts organizations, religious denominations and issue-related causes. NPOs also live in a complex world that’s often juxtaposed to what is happening in the economy. When the economy is strong, most NPOs receive more contributions but may provide fewer services. By contrast, when the economy is in recession, people tend to contribute less, but the demand for NPO services increase. For instance, when unemployment is low, NPOs that provide unemployment services experience a decline in demand.
This brings us to the Age of the Coronavirus. We entered the year 2020 with the lowest unemployment rate since the U.S. Government began tracking unemployment. The stock market was at its all-time high and consumer confidence matched the stock market with record polling numbers. Then the unexpected happened.
Now we’re in unknown territory. Most for-profit businesses and NPOs have never experienced a shutdown of commerce over such a long period of time. Our firm has spent much of our time, from mid-March through June, counseling NPOs on how to survive during this unusual time. Several of our clients have not only survived, but thrived during the crisis
The Community Foundation for Northeast Georgia, headquartered on Sugarloaf Parkway in Duluth, saw the upcoming crisis and acted quickly. CEO Randy Redner launched a Covid-19 Emergency Fund as a $300,000 challenge match to the community. Contributors met the challenge in one month and the community foundation upped their challenge goal by another $100,000. To date, more than $1 million has been raised, just sense the shutdown occurred.
“We raised money in a crisis, and we spun that money back into the community,” stated Redner. “To date, we’ve already granted more than $500,000 to NPOs in the community. There is more to come.”
Theatrical Outfit on Luckie Street in the heart of downtown Atlanta was in the middle of a fundraising campaign when the shutdown occurred. After considerable deliberation, the leadership decided to plow forward and continue raising funds.
“Last month we received a $100,000 check from one of our long time supporters,” commented Gretchen Butler, Managing Director. “We’re staying in touch with donors and stakeholders, and the response has been inspiring. We’ve received contributions of $5,000, $10,000 and $25,000….people know that we’ve had to postpone our spring productions and that the theatre is dark right now and their support hasn’t wavered.“ The Theatrical Outfit held their first virtual gala at the end of the month and it proved to be a hit with their constituents.
Auditory-Verbal Center (AVC) headquartered at Century Center, just off I-85 in Atlanta, teaches deaf and hard of hearing children birth-to-five years old how to hear and speak without the need for sign language or lip reading. AVC assists families in making sure that their children have the correct hearing aids or cochlear implants, and then the family begins working with a certified auditory verbal therapist specialized in listening and the spoken language.
“When we saw the shutdown coming, we quickly moved from live sessions to online instruction and therapy,” states Debbie Brilling, Executive Director of AVC. “We serve more than 160 families who have a deaf or hard of hearing child. Our families come to our Atlanta or Macon offices from all over the state, for one-hour therapy sessions each week. Many of them cannot afford internet or computers for the online instruction. So, as the shutdown was occurring, we found the money to purchase the technology for each of our families who didn’t have it.”
Deafness, or hearing impairment affects two hundred newborn children a year in Georgia. Even more children a year experience hearing loss as from illness or accident. AVC helps children learn how to listen, not just hear noise, but interpret the meaning of sounds, and how to speak.
“Eighty percent of a person’s learning occurs by the time they are three years old,” Brilling continues. “In order for them to learn to listen and to speak, the child has to learn how to understand what they are hearing.”
Amazingly, there are only 760 certified auditory verbal therapists in the entire world. Auditory-Verbal Center employs six in their Atlanta and Macon centers.
“We found the money from supporters and we were completely online in February, well ahead of the complete shutdown of businesses and other NPOs,” Brilling concluded. “You can’t hit the pause button on that critical time when children are learning.”
We’ve compiled a short list of clients’ best practices that we’ve recommended to NPO executives, staff members and board members:
1. You are the legal fiduciary of the organization. As a board member of an NPO, you should thoroughly understand the financial operations and position. If you don’t, now is a good time to immerse yourself in it.
2. Learn the burn rate. Make sure that everyone knows the rate at which your organization is spending down cash and how much money can you spend each month before your cash is exhausted. How long can you operate with no, or materially reduced, revenue?
3. Consider a strategic merger with another like-minded NPO of similar or identical mission. This shutdown has created an emergency situation for many NPOs in America. Working together with similar NPOs may save the mission and create a more efficient operating model.
4. Understand that Change has already happened. NPOs, as with many businesses, are averse to change. The culture encourages us to operate as we’ve always operated. People intuitively want to do what they’ve always done. But these times are different. Plan for the future. If you can’t conduct “business as usual” today, then what does tomorrow look like?
5. Continue to ask for contributions. People give to things that they believe in because they were asked. While the stock market downturn earlier this year was swift and dramatic, remember that the market has bounced back significantly – so much so that in early June the S&P 500 is up almost 10% from June 2019, so long-term investors still have significant gains in their investments. Be sensitive to a donor’s current situation, of course, but don’t assume someone will say no to making a gift. Let the donor make the decision!
6. Do not cut development staff. Some non-profits trim their development staff when the budget gets tight, which is a perfect example of cutting off your nose to spite your face. Good development officers generate revenue, in much the same manner that salesmen generate revenue for a company. NPOs have meaningful and important missions, but someone has to be the communicator, cheerleader and chief fundraising officer.
Lastly, remember that this shall too shall pass. Consider: “What does your NPO want to look like, and how will it operate, as we progress to a new normal?”
Wesley K. Wicker, Ed.D. is a Principal and Partner of Columns Fundraising, an Atlanta-based consulting firm with clients throughout Georgia and from coast to coast. For more information, you may contact him by email: email@example.com.