Anyone who shops for groceries, worries about recent bank failures, or wonders how to save for things like car repairs or college tuition understands economic uncertainty. When nonprofits experience that same uncertainty, their leaders must not only deal with the financial implications but also continue to advance their missions, hire staff, and foster community wealth and well-being.

While foundations and government agencies have a responsibility to bolster grantees that rely on their support, nonprofit leaders can also take actions to better navigate economic uncertainty. Here are six things nonprofits can do now.

  1. Assess strengths, risks, and challenges It can be daunting to analyze organizational risks and opportunities, especially for nonprofits that operate with a thin margin.
  2. Be open about your financial situation Keep grant makers informed of the economy’s impact on service delivery. While power dynamics can complicate these conversations, we consistently hear from grant makers that early communication — updates rather than direct asks — helps foundations better support grantees in uncertain economic times
  3. Coordinate and collaborate with peersCoordination takes time, but it can bolster efforts to secure support to cover the full costs of programs and to compensate staff members fairly.
  4. Advance equity Communities of color are disproportionately affected by economic downturns. Plus, many BIPOC-led and -serving nonprofits have not had equal access to resources, as detailed in NFF’s 2022 State of the Sector Survey.
  5. Reject the assumption that bigger is always better Nonprofits and businesses are often encouraged to grow. But investing in things that make you more stable without growing — staff retention, systems, financial reserves — is also a valid option, especially in times of uncertainty.
  6. Reassure staff, if you are in a position to do so Staff members are a nonprofit’s most important assets. A new survey by Forvis found 50 percent of nonprofits are having difficulty delivering programs and services due to staffing shortages, and 78 percent are trying to fill staff vacancies.

Read the full article about nonprofit uncertainty by Michelle Legaspi Sánchez at Nonprofit Finance Fund.