CRISIS PLANNING
FPLG COVID-19 RESPONSE
CRISIS PLANNING
[UPDATE: November 13, 2020]
The severe spike in COVID-19 cases all around the nation as well as the likelihood that one or more vaccines may become available (soon in limited distribution and more widely perhaps in mid-2021) brings the planning process for the nonprofit sector into somewhat clearer focus than even a month or two ago.
Using “scenario planning” as the theoretical framework, there are fewer possibilities. Of course, the delay in what everyone had hoped might be continued phased reopenings makes the path forward for the nonprofit sector more precarious.
Whether there will be a much needed infusion of financial help from the federal government remains unclear.
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[UPDATE: September 24, 2020]
Planning has remained fraught with uncertainty as the progress of the COVID-19 pandemic has continued to be marked by surges and retrenchments. Now it seems clear that “scenario planning” – rather than traditional “strategic planning” – is the best way to meet the current and upcoming challenges.
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[UPDATE: June 25, 2020]
A key question for each organization is how to plan – if, indeed, planning is even possible in the face of massive and unprecedented uncertainty.
But the experts diverge on the best approach. Some experts advise doubling down on the “strategic planning” that many nonprofits have adopted. Others say that “scenario planning” is the only logical choice in the current volatile circumstances.
“The goal, nonprofit leaders need to remind themselves, is not necessarily the survival of their individual organizations, but ensuring ongoing services and support for their constituents.” That’s why many more groups than usual are at least considering merger or collaboration possibilities.
And now that all states are “reopening” in phased stages, the planning issues facing nonprofits around the nation have become considerably more complex. Also, because of starkly rising infection rates, there may be a slowing of these reopenings or even retrenchment back to an earlier, more closed-up operational situation.
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[March 31, 2020]
Nonprofit organizations must take important steps now to mitigate the impact of the COVID-19 pandemic and – as much as possible – plan for the near future and their ultimate survivability. There are several essential steps:
- Review finances and, particular, the cash position
- Assess damage to revenue streams
- Determine where reduced operations will cut expenses, or where government programs or emergency loans or benefits may help
- Review all policies, procedures, and insurance coverage
- Review all grants and contracts: in certain cases, a “force majeure” (Act of God) clause may be in effect that will excuse performance or eliminate penalties
Some organizations have business continuity plans in place but even those may turn out to be inadequate in light of the catastrophic events we face. For the many other groups without advance plans and policies in place, the task will be more daunting – but necessary.
Experts concur on one important point: Communicate regularly and consistently with everyone inside or outside the organization, including donors and funders.
Over the last eight months of disruption and uncertainty, the nonprofit sector has been asked to keep its doors open and services going while its sources of funding have been rocked. Business models that were honed for the pre-pandemic world where we had grown comfortable working no longer seemed secure. Each organization faced a question: Where will we find the money to keep going? Often, there was no good answer.
–Martin Levine, NPQ (10/28/20)
Scenario planning is ‘an approach to thinking about the future that is rooted in the recognition that even in the best of times, we can’t accurately anticipate what will come ahead. Instead decision-makers can begin to imagine multiple plausible pictures of the future and rehearse how their organizations might respond.’
–Linda J. Rosenthal, J.D., (8/6/20) FPLG Blog
The COVID-19 crisis has created a moment of hyper-uncertainty for social sector organizations. No one knows how the future will unfold … [Nonprofit and foundation leaders] … find themselves swamped by having to make organization-defining choices during this extraordinary period of disruption.
— Gabriel Kasper and Justin Marcoux, The Monitor Institute (7/20/20)
With greatly reduced income and increased need, nonprofits may have to find new ways to deliver outcomes — whether evolving existing programs, embracing technology or partnering with businesses. Thinking beyond current parameters is crucial.
–Jeff Jowdy (5/18/20)
Should you engage in strategic planning right now? No – definitely not. Conserve resources so you can respond with agility in the face of uncertainty. You have no sound basis for deciding what you will achieve five years from now. If you think you do, you’re kidding yourself. Stop wasting money.
—Ted Bilich, Risk Alternatives 4/30/20
REFERENCES & RESOURCES
- The Frontlines of Nonprofit Distress Get Clearer (October 28, 2020) Martin Levine, The Nonprofit Quarterly
- The Endless Ride: Nonprofits that Reopen Only to Close Again (October 28, 2020) Ruth McCambridge, The Nonprofit Quarterly
- THE HUMAN SIDE OF COVID-19’S IMPACT ON NONPROFITS (October 2020) BDO USA
- If, When and How Nonprofits Should Consider Reforecasting their Budgets (October 6, 2020) Barbara Finke, BDO USA
- Dream or Die: Nonprofit Closures Raise Important Questions for Us All (October 5, 2020) Rob Meiksins, The Nonprofit Quarterly
- Nonprofit Organizational Planning in Times of Uncertainty (September 19, 2020) Kristen Hay, Bloomerang Blog
- Preparing for 2021 (September 15, 2020) Cindi Phallen, Nonprofit SnapChat
- Diverting Restricted Funds During A Crisis (August 25, 2020) Linda J. Rosenthal, J.D., FPLG Blog
- Spontaneous Collaboration a Go-to Move in the Midst of Disaster (August 21, 2020) Deidre Fraser, The Nonprofit Quarterly
- Scenario Planning: Four Models for Nonprofits (Part 3) (August 12, 2020) Linda J. Rosenthal, J.D., FPLG Blog
- Scenario Planning: Four Models for Nonprofits (Part 2) (August 25, 2020) Linda J. Rosenthal, J.D., FPLG Blog
- Scenario Planning: Four Models For Nonprofits (Part 1) (August 6, 2020) Linda J. Rosenthal, J.D., FPLG Blog
- COVID-19 scenario planning for nonprofit and philanthropic organizations (July 2020), Gabriel Kasper and Justin Marcoux, The Monitor Institute
- New Report Offers 4 Scenarios for How Covid and the Economy’s Fall Will Reshape the Nonprofit World (July 20, 2020) Michael Anft, The Chronicle of Philanthropy
- The Road to Survival: Nonprofit Tales During the Pandemic (July 2020) GiveCentral Blog
- Ask An Expert: Starting the Merger Conversation in a Crisis (June 17, 2020) Eden Stiffman, The Chronicle of Philanthropy
- Nonprofit Leaders, Get Used to the Uncertainty and Focus on the Big Picture (June 15, 2020) Alan M. Cantor, The Chronicle of Philanthropy
- Nonprofit Innovation for a Post-Crisis Future (June 10, 2020) Nithin Iyengar & Reilly Kiernan, The Bridgespan Group
- COVID-19’s Impact on Nonprofits’ Revenues, Digitization, and Mergers (June 4, 2020) David La Piana, Stanford Social Innovation Review
- Executive Session: Rebooting and Managing After COVID-19 (Video Webinar) (May 2020) Paul Clolery, The NonProfit Times
- Nonprofit Strategy Guide for When the Economy Reopens (May 18, 2020) Howard Levy, Nonprofit Pro Blog
- Are Nonprofits Ready to Reopen? What Do We Need (May 14, 2020) Martin Levine, The Nonprofit Quarterly
- COVID-19: Failures Jump When Planning Isn’t In Place (May 14, 2020) Melissa Ouari, The NonProfit Times
- Is Your Crisis Response Defensive or Proactive? (May 13, 2020) Rachael Noyes, INSEAD Knowledge
- Financial Leadership: Making Good Decisions in Unprecedented Times (May 11, 2020) Jeanne Bell & NPQ, The Nonprofit Quarterly
- 5 ways smart nonprofits can soar over COVID-19 and into the future (May 8, 2020) Andrea Kihlstedt, Candid Blog
- Proactive, Not Perfect, Scenario Planning: A Short Guide for Our Times (May 5, 2020) Kate Barr, The Nonprofit Quarterly
- Three Things Nonprofits Should Prioritize in the Wake of COVID-19 (April 30, 2020) Amy Celep, et al., Stanford Social Innovation Review
- A Year of Budget Revisions Lies Ahead for Many Nonprofits (April 24, 2020) Ruth McCambridge, The Nonprofit Quarterly
- Are You Responding or Reacting? (April 20, 2020) Lindsay Tallman, BoardSource Blog
- Planning during COVID: creating a strategic plan, even now (April 16, 2020) Doug Schneider, Philanthropy Daily
- Should Your Nonprofit Engage in Strategic Planning During Uncertain Times? No: Here’s 3 Steps to Take Instead (April 14, 2020) Ted Bilich, Risk Alternatives
- 3 Nonprofit Types under COVID-19 – and What They Must Come To Terms With (April 3, 2020) Ruth McCambridge, The Nonprofit Quarterly
- Crisis Funding and Debt: What Organizations Need to Know (April 2, 2020) Sandi McKinley and Avichai Scher, Nonprofit Finance Fund
- Sustainability to Survivability: Nonprofit Finance Must-Do’s in the Time of COVID (March 19, 2020) Steve Zimmerman, Spectrum Nonprofit Services, The Nonprofit Quarterly
- Q&A on COVID-19 (March 18, 2020) Suzanne Smith, Social Impact Architects
- How Nonprofit Organizations Can Mitigate Risk in Light of Coronavirus Pandemic (March 17, 2020) Partridge Snow & Hahn, LLP
- Coronavirus & business continuity planning (March 2020) Cindy Leonard, Nonprofit Consultant
- COVID-19: What Nonprofits Should Do Right Now (March 13, 2020) The Nonprofit Finance Fund
- Nonprofit Insurance and COVID-19 (March 10, 2020) Emily Cote, New York Council of Nonprofits
Remote-Work Costs: Must Nonprofit Reimburse?
[June 5, 2020] Among the many adjustments that employers - including nonprofits - have had to make during the COVID-19 pandemic is the abrupt switch to remote work for some or all of their employees. That includes making sure that everyone in the workforce has needed hardware, software, and internet and phone connectivity. California is among the jurisdictions that initiated early and mandatory stay-at-home orders for a large portion of the population and economy. There [...]
Filing Deadlines Extended for Nonprofit Organizations
[April 24, 2020] By the third week of March 2020, governments at all levels had begun to respond to the many questions and issues raised by the COVID-19 emergency, including - most notably - the curtailment or suspension of operations and activities by individuals and entities on account of new stay-at-home orders and recommendations. The necessary federal emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Act was made in mid-March. The [...]
UPDATE: The CARES Act and Nonprofits
[March 27, 2020] The third prong of the Congressional response to the COVID-19 pandemic - the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 747) - is now before the House of Representatives, having passed the Senate on Wednesday. The House is expected to approve it today with overwhelming support; voting is expected to begin shortly. It could be signed at the White House and in effect before the end of this weekend. [...]
Some Good News: Funders are Stepping Up
Ten days ago, we posted Funders Must Step Up - Right Now! (March 16, 2020). That same morning, influential blogger Vu Le had posted Funders, this is the rainy day you have been saving up for. Mr. Le has long been a vocal critic of many foundations’ viewing the five percent payout figure in the tax code as a ceiling instead of what it is: a floor. During that week, as most of us were [...]
Nonprofit Board Meetings in an Emergency
The devastating pandemic has brought sudden and profound challenges for all of us. In What Nonprofit Board Members Should Be Doing Right Now to Address the COVID-19 Situation, (March 16, 2020), the experts from BoardSource write: “As the world responds to the threats of COVID-19, many nonprofits and their boards are wrestling with difficult questions and decisions.” A rewrite of that sentence may be in order; every nonprofit and its board is flying blind in [...]
The Charitable Sector: COVID-19 Relief and Economic Stimulus Package
America's charities request $60 billion infusion of support to help the most vulnerable March 18, 2020 The COVID-19 (Coronavirus) pandemic facing the country is having a profound impact on the economy and has greatly expanded the need for charitable organizations to provide additional services in an unprecedented manner. At the same time, the economic downturn will undoubtedly result in a contraction in contributions and other sources of revenue which are the lifeblood of many charitable [...]
Coronavirus and Nonprofits: Challenges & Resources
What a difference a week makes. Last week, the news media focused on the minutiae of the primary-election horse race. This week, Americans have been forced to confront the coronavirus (COVID-19) pandemic. For the nonprofit sector, the emergency becomes a double-barreled crisis: we are both victims and saviors. This is not an unfamiliar conundrum; there are frequent natural disasters that devastate one area or another. This nation’s charitable organizations - and, in particular, the social [...]
Funders Must Step Up – Right Now!
“Funders,” writes nonprofit blogger Vu Le, “this is the rainy day you have been saving up for.” Recently, we wrote about Mr. Le’s earlier plea for America’s foundations to step up their payouts beyond the “five percent rule” in the federal tax code. In an article last summer, he characterized it as a moral imperative: The ethical argument for foundations to increase their annual payout rate beyond 5% (August 4, 2019). This morning, it’s a [...]
Small Business Association Disaster Loan Guidance and Resources
The U.S. Small Business Administration (SBA) has an existing program, the Economic Injury Disaster Loan program, that extends disaster relief loans to small businesses, including nonprofits, to help alleviate economic injury caused by disasters. On Thursday, March 12, 2020, the SBA announced that the program will be available to claims arising from COVID-19. The SBA will work with state officials to offer loans of up to $2 million. “These loans may be used to pay [...]