Strategies for Small Nonprofits Searching for Long-term Solutions

As a nonprofit leader, if you are struggling right now, you are certainly not alone. Many nonprofits are buckling under the weight of the coronavirus pandemic and the economic havoc that it has ushered in. While the government has created some programs to provide aid—such as the Payroll Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program—many nonprofits continue to struggle.

In a recent article for Forbes, author Donna Blackwell examines why so many small nonprofits are struggling at the moment and offers two strategic avenues for consideration. Blackwell explains that the most common causes of current struggles are the following:

• Tight cashflow
• Uncertainty regarding applying for and using federal aid
• Loss of long-term investment and experience due to cutting staff
• Antiquated infrastructure with little reserves and no available credit

The author goes on to suggest two strategies that small, struggling nonprofits should consider in order to ensure their long-term success:

1. Merge with a larger nonprofit. Combining resources with a more strongly rooted organization can help to preserve the vital services that you provide to your local community. It gives your organization access to stronger infrastructure. If this is the path for you, evaluate which nonprofits you already have a relationship, or consider what local nonprofits share a similar mission to yours.
2. Work with a fiscal sponsor. Fiscal sponsors are nonprofit organizations that offer “fiduciary oversight, financial management, and other administrative services to help build the capacity of charitable projects.” Becoming a sponsored program allows your nonprofit to maintain control and management of all program functions while benefiting from the fiduciary and financial oversight of the fiscal sponsor.

“Merger and fiscal sponsorship are real solutions for nonprofits that find this current crisis has created an economic hardship they fear they cannot overcome,” concludes Blackwell. For more details, click here to read the article in full.