Over the next year or two, budgetary challenges are clearly in the cards, and there are likely to be successive and different situations requiring action. Change may be inevitable, but the impact of this change on an organization depends on which decisions are made and how.

Although Kate doesn’t use the old adage “Never put off until tomorrow what you can do today,” she does illustrate the dangers of allowing a problem to “fester until it [becomes] a crisis.” She also offers some suggestions for how to improve organizational decision making.

After reading the article, you can use our resources to start making decisions at your organization.

• Cash Flow Template
• Scenario Planning Worksheet

This Week’s Harvest: Frequently Asked Questions

Audits

Not-For-Profit Accounting returns to answer some frequently asked questions, starting with questions on audits:

Our nonprofit is getting ready for our first audit.  What are we supposed to do, and what does the auditor do?

You should receive a letter of engagement from the auditors that helps spell out the relationship.  You’ll also get a lists of things to do and get ready before the auditors come to your offices for the field work.  This article also talks about the process.  But if you have any questions you should ask your auditors before things get going to avoid any confusion and additional cost.

Read more about audits in Balancing the Mission Checkbook and see what other FAQ’s Allan tackles in blog post.

Collaboration

• Mergers seem to be the hot topic these days. But there are many ways to collaborate beyond mergers. The Foundation Center provides information on different types of strategic alliances, including few different typologies, which underscores the range of possible collaborations.

Stimulus

• 2009 Recovery Act Resources for Nonprofits from MCN’s Public Policy team

• Want Stimulus Money? Act Fast! from Fieldstone Alliance

• Special Reports on Economic Stimulus & Recovery from the National Council of Nonprofits

Inspired by Nonprofit Leadership 601, I’m going to keep an eye out for innovative and interesting examples of how nonprofits are collaborating during this challenging economic time.  Taking a note from Heather, I’ll also tag those stories npoeconomy.

• Now That’s What I Call Collaboration…

Another Collaborative Framework

In his post, Social Movement Innovation Andrew Wolk asks how nonprofits can work together to maximize impact.

What are the unique roles of a direct service organization, an advocacy organization, a coalition, or the government? How do they all fit together to ensure lasting social impact?  What are the connections in education, for example, among Teach for America, Alliance for Excellent Education, the National Alliance for Public Charter Schools, and the U.S. Department of Education?  Each organization is  concerned with its own sustainability and impact, but shouldn’t they also consider their role in a collective purpose: better education?

How Liquid is Your Cash?

From Balancing the Mission Checkbook, an important reminder that Cash is Cash, Sometimes:

Beyond verifying an accurate number, though, it’s important to have a solid grasp of all the strings and restrictions that might hinder your ability to use that cash when you need it. Some restrictions are external, such as temporarily restricted grants. Other strings on cash result from internal decisions related to investment decisions, reserve policies, or overly-complex designations and conditions.

To help organizations get a better handle on how accessible their cash really is, Nonprofits Assistance Fund has created the Cash and Investment Analysis worksheet.

I would also suggest reading a related post, It’s 10 am, do you know where your cash is?

 This Week’s Harvest

Updates on the Stimulus and the Proposed Deduction Changes

• Sources of Information Regarding Stimulus Funds: National Council of Nonprofits Special Report #4

• More information on federal stimulus in Minnesota from Minnesota Budget Bites

• Information about the Proposed Changes in Charitable Deductions: National Council of Nonprofits Special Report #5

• Obama’s Charitable-Giving Plan: What It Means for Nonprofit Groups Live Discussion Transcript from the Chronicle of Philanthropy

Other Developments

• L3C – Developments & Resources from Nonprofit Law Blog

• What I Learned From the IRS, Part 1 from Not-For Profit Accounting

• Art as collateral from the Artful Manager

• The Critical Alignment of Mission, Money and Competence blog post and discussion on Social Velocity

As you can see from the screenshot, you can sort the data by fiscal year, state, or recipient type.  It’s important to note that this includes grants and PRIs or program-related investments.  (Kate describes the benefits of PRIs in her post, Hidden gems of foundation funds.)

For more information, read the announcement on PhilanTopic.  Their intent is for the map to evolve and accurately reflect foundation giving:

New grants will be added to the map on an ongoing basis to provide the most current picture of foundation giving for programs and issues relating to the economic downturn. Grantmakers are encouraged to send announcements about their grants or PRIs to Matthew Ross at mr@foundationcenter.org.

Do you know what’s happening in your community?  Chime in!

Many organizations, such as Nonprofits Assistance Fund, are working to gather and disseminate resources. Our goal is to collect as many of them as possible and post them here.  These posts will be filed under Resource Collections.

Focus on the Economic Crisis

The Foundation Center has created a library of information on the economy.  Their Focus on the Economic Crisis features news items, commentary, research advisories, and blog posts from PhilanTopic. It is an excellent collection of materials, with a focus on research and analysis from thought leaders in the field of philanthropy.

Nonprofit Economy Vitality Center

The National Council of Nonprofits (NCNA) has created the Nonprofit Economy Vitality Center. It is designed as an “ever-evolving resource” with materials on the impact of the economy on nonprofits, statistical data on the nonprofit sector, and coping strategies to help nonprofits continue to deliver services.

The Economy and Philanthropy

The Minnesota Council on Foundations has posted a collection of resources on The Economy and Philanthropy. Although it is geared for grantmakers, many of these resources are useful for nonprofits to gauge the impact of the economy on foundation, corporate, and individual giving.  They also have sections in the side bar of relevant news items and resources for nonprofits.  I also suggest you visit their excellent blog.

Our Call to Action: Building a Collection

I believe that at this time, we have a call to action.  At Nonprofits Assistance Fund, it is our mission to help build financially healthy nonprofit organizations.  Right now, there are many factors undermining our sector’s financial health and viability.  Let’s take advantage of what we do have — tools that facilitate sharing information, as well as savvy and strategic thinkers working to sustain our sector.  I encourage you to connect with me and contribute to this collection.  But I also ask that you work with anyone else who is gathering this kind of information.  For example, you can contact the NCNA and help them keep their collection up to date.  If we are all working in concert to harvest resources, we all have the best chance to make it through the winter.

• Kate discusses the economy on Balancing the Mission Checkbook. She has identified some strategies for nonprofits, as well as offering advice on on what to be wary of. Here are a few recent posts prompted by the current financial situation:
  • Jittery About Investments
  • Start Your Turnaround Strategies Today
  • This Post Will Not Cheer Your Up
  • It’s 10am, Do You Know Where Your Cash Is?

• Managing and Adapting in a Time of Uncertainty offers a framework to respond to the challenges nonprofits face in this economic downturn and set priorities with mission in mind.
• How financially healthy is your nonprofit? With this Financial Self-Assessment, you’ll have a better idea. Use the checklist to assess your organization’s financial management practices.

There are resource collections, blog posts, podcasts, news articles, and other information that we have found particularly useful. They are a great place to start.

Resource Collections:

• How Charities Cope With a Troubled Economy: Stories, live discussions, and statistics from The Chronicle of Philanthropy

• Economic Crisis Resource Center: A compilation of resources put together by Meyer Foundation.

• Dealing with the Economic Crisis: Resources collected by Donors Forum.

• Opportunities in Lean Times from Fieldstone Alliance

Blogs, podcasts, new articles, and other sources of information:

• Philantopic has done an excellent job collecting news stories on the economy and its potential impact on the nonprofit sector. Their posts are a mix of analysis, provocative ideas, and tangible suggestions to help your organization during this uncertain time.  I suggest reading all of their posts on this topic, and have included a few that I think are especially relevant to nonprofits:
  • Tips for NPOs Threatened by the Financial Crisis
  • A to Z Survival Guide for Uncertain Times
  • Time to Start Preparing for the Unthinkable?
  • How to Survive (and Thrive in) Tough Times
  • Do Foundation Giving Priorities Change in Times of Economic Distress?

• Lucy Bernholz blogs at PHILANTHROPY 2173, where she regularly comments on the future of philanthropy.  Lucy shares some predictions on the possible short-term impact of the economy for foundation and individual giving, as well as ideas for innovating the business of giving.
  • Stirred, Not Shaken
  • Foreclosures, Falling Economies, and the Future of Philanthropy
  • Resetting Philanthropy
  • What Will You Do?

• Philanthropy Potluck, from the Minnesota Council of Foundations, regularly includes resources and news stories on the economy for grantmakers and grantseekers.

• Special Address, On Third-Sector Funding and The Economy, from Tom Suddess

• Greenlights Nonprofit Town Hall Meeting:
  • What the (Near) Future Holds
  • Raising Money in the Downturn

• New York Times
  • Giving Section
  • Facing Deficits, States Get Out Sharper Knives