Advice for Managing Uncertainty

Advice for Managing Uncertainty

by John Shasky, CTP, Financial Advisor for Pinnacle Financial Partners, and Das Rooprai, CEO for Center for Nonprofit Excellence

With continued changes in government funding, the financial outlook for nonprofits feels more stressful than ever. But there are steps you can take right now to help insulate your organization from the severity of what may come. In the spirit of "preparing for a rainy day," now is the time to take practical steps to identify and manage financial vulnerabilities in your organization. From business and banking perspectives, here are a few items and actions to consider:

  • Information is power. Now is a good time to assess your business model for more efficiency, resilience, and adaptability.
  • Scrutinize your budget. Trim non-essential costs and consider delaying investment in discretionary items.
  • Cash is king. Know your cash position and how long can you operate if funding stops. Manage payables carefully and take advantage of the full time your organization has to pay expenses.
  • Talk with your banker. Discuss ways to improve cash flow and ask about a potential line of credit for that rainy day. Ask your bank to provide a wellness checkup: How do they view your organization’s financial health? In general, don't be afraid to ask for help in times of financial strain. Your accounting firm, associations, and peers are helpful resources too. You are not alone.
  • Plan for possible cuts. Nobody wants to think about this, but the reality of the moment calls for it. Staffing is typically the largest category of expense, so the hard question to wrestle with is how you might trim staffing expenses if needed without impacting your mission.

Running a non-profit organization is stressful work. Throw in the uncertainty of our current environment and the task becomes even harder. Call upon trusted partners to help you see through the haze of uncertainty and take actions now that will extend your financial runway. 

There are additional considerations related to grants, contracts, funders, and social capital. The following resources can help you strategize and manage the financial needs of your organization during these times of uncertainty: 

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