Heading in to 2021 we have learned a lot from 2020 but organisations still need to remain nimble and agile in this ever-changing landscape. Whilst we could have not predicted everything that 2020 would throw at us, organisations need to look forward and plan for future success.
Many NFPs have struggled through the pandemic due to a decrease in revenue and fundraising. The JobKeeper program has kept money coming into organisations which has helped – but what will happen when JobKeeper ends on 28 March 2021? What can you do to lessen the impact of these reductions?
The findings of the recent Australian Institute of Company Directors annual NFP Governance and Performance Study published in November 2020 revealed that many organisations’ future was under threat even before the challenges of COVID-19. What should organisations be doing to ensure that that survive?
Many charities’ operations are affected by COVID-19. This might mean that some or all of them might need to be modified or even temporarily halted. The ACNC has stressed the importance of charities keeping stakeholders informed about what they are doing and why. Regular communication about charities’ changed activities should be a priority.
The commission has stressed that if charities’ activities change, they need to match their charitable purpose – what the charities were set up to achieve.
A charity that has decided to cancel or postpone a fundraising event might need to decide what to do with money already committed (for example, through ticket sales or other purchases).
Questions needing answers might include:
- Will the money be refunded – either immediately or in time?
- Will the charity hold the money until the fundraiser is rescheduled?
- Will the charity commit the money towards a future event or effort?
Review your purpose
- What is the organisations purpose in the strategic plan?
- Has this changed due to the COVID-19 pandemic?
- Are you still providing the same products or services that you were prior?
- Has there been a change in the demand for your services?
- If your activities have changed over the last 12 months, do they still match your purpose?
Review financial position
NFPs need to consider financial moves that might include:
- Considering using financial reserves
- Assessing their eligibility for federal, state, and territory stimulus packages
- Considering any other financial assistance available (for example, business-relief packages from banks and financial institutions)
- Assessing future cash flows and doing a forecast – or adjusting their forecasts – considering current events
- Speaking to funders about the effects of cancelling or delaying activities that are part of funding agreements
- Knowing fixed costs and when they will need to be paid. Not committing to any more expenditure if possible, and
- Reviewing existing liabilities (for example, exploring options with banks and financial institutions, including deferring loan repayments).
Responsible persons should speak to their accountant and auditor in preparation of budgets, forecasts, and financial statements.
Partnerships and Collaboration
With NFPs facing a range of challenges, collaborations and partnerships (including mergers and acquisitions) can be an effective way to come together and operate in the most efficient way in order to deliver greater impact. Collaboration is complex so ensure you have the best advisers around you.
Is there an organisation you could partner with to assist you delivering your product or service? Could this reduce overheads or distribution costs? How can you work with another organisation (for profit or not-for-profit) to plan ahead? Are you better to merge or acquire another organisation?