Inflation and nonprofits: How to survive the crisis
Nonprofit & Human Service Organizations, Finance 02/8/2023
Since the COVID-19 pandemic began in early 2020, nonprofits have seen a sharp increase in the need for their services. These nonprofits have struggled to keep up with the greater demand, both in terms of funding the work they do and finding volunteers to carry it out. Now, organizations are dealing with the effects of inflation on their budget, volunteer capabilities and the demand for their services.
Church Mutual is publishing a series of blog posts on how different types of organizations can best handle inflation. Here, we offer five tips for nonprofits.
- Reach out to recurring donors. If more people need your services, and if those services are more expensive, then you have a problem. A food pantry, for example, still must feed hungry people, even when the cost of groceries has risen 20% or more in some categories. Your recurring donors are the people who have understood and supported your mission through good times and bad. Ask them if they would consider increasing their giving amount by $5, $10 or $20, or increasing the frequency of their giving for just a few months.
- Create partnerships with corporate donors. Even as Americans have struggled with the pandemic and its aftereffects, corporate donations are still going strong. Corporate giving increased by more than 20% between 2020 and 2021, which shows that large companies want to make a difference. Share your story with local corporations and start a conversation about how they can help you through this challenging time.
- Know where your organization stands with cash. Your board members and finance director should have a clear understanding of how much cash you have on hand so you can make decisions with sound information. Depending on the system you use for accounting, that information may not be easily accessible, which means you may want to make an effort to create a detailed financial statement.
- Seek out grants. If you don’t already have a robust grant-writing program at your organization, now is the time to start one. Grants can make a big difference to your budget, and often, all it takes is a carefully worded application. If you don’t have someone on staff who can look for appropriate grants, consider asking for a volunteer to take on the task.
- Meet with your advisor to inflation-proof your investments. This is a time for careful investing, and sometimes, you need to ask a professional for help with taking advantage of the current market.
For more tips on how nonprofits can weather a wide variety of “storms,” visit our safety resources page.