Accounting for Change - Nonprofit Tips for Navigating the COVID-19 Crisis
As a nonprofit, you’re used to being on the front line helping your community members tackle the challenges they face every single day. From social services to arts and education to health and religion, you play a critical role in helping others. The positive impact you have on your community has the power to reach far beyond local geography, it is limitless.
But now, in the face of COVID-19, you feel its limits.
Everything seems to change, every single day. How do you keep track of all you need to do, normally, while having the resources to manage an ever-changing crisis?
Accounting for Change in Organizational Flexibility & Security
How do you continue your mission while so much of the country is ordered to stay at home? COVID-19 has forced most nonprofits into a work-from-home environment. Configuring systems into a workable solution with multiple access points so everyone can continue moving forward can be time-consuming. We know time is precious right now, but ensuring your systems are set-up with proper security features now can ward off potential threats in the future.
Be careful not to open Remote Desktop (RDP) directly to the Internet to support remote workers, even temporarily. Temporary fixes have a bad habit of becoming permanent fixtures. Instead, require that your users connect to your network by VPN, first, then connect to RDP over the VPN. According to this Shodan Blog article, the number of RDP ports exposed to the Internet has jumped 41% in the last month. This is a worrisome statistic, because RDP is a magnet for cyber-attacks. Reduce your overall risk and invest in a proper solution to avoid the expense of recovering from an incident down the road. Furthermore, you can reduce your overall risk by enabling perimeter defenses like IP address whitelists and multi-factor authentication.
For systems you rely on that are provided on-premises, is that a workable solution for you? If not, can your accounting software/ERP solution offer an online product? Assess what your needs are and reach out to your providers–they are here to help.
Accounting for Change in Accountability
As with any major event, there are itemized changes that need to be addressed. You may need to adjust your software to account for the new FMLA rules relating to COVID-19. How do you account for the various types of FMLA leave line items specific to COVID-19? What new reporting should you be doing as a result of COVID-19?
To accommodate the Families First Coronavirus Response Act (FFCRA), make sure your accounting software provider has made changes to the Employer FICA Calculation.
Now is a good time to project out your cash flow – and regularly schedule updates over the next 6-18 months. Assemble a diverse team to monitor and track the changes and expenses associated with managing through this crisis. Every department is affected by this in different ways and the ability to come together regularly will help keep everyone up to date on how the entire organization is impacted.
Your nonprofit’s methods of governance should be addressed and changed if needed. Requirements will vary by state and due to this crisis, your state might even be altering their nonprofit governing laws to enable virtual board meetings, etc. Here’s a recent Blog Article by Casner & Edwards relating to changes enacted by Massachusetts Governor Charlie Baker.
Be sure to review your specific state guidelines.
Additionally, what changes, if any, need to be made to your existing mission statement? If there are changes that need to be made internally to address the external changes occurring in your community, what process is required during this unprecedented time.
Reporting and continuity of business operations. Where are you in your reporting cycle and how does this affect your year-end? Reporting, in general, is key for internal decision-making, communicating with donors, securing grants, and providing the transparency needed to ensure longevity.
Where are you in your reporting lifecycle? How does this pandemic affect where you are and what you have or plan to have reported? This Surgent CPE Blog Article offers a detailed summary of accounting and reporting considerations relating to COVID-19. No matter where you are in your financial reporting cycle, please be sure to review regularly with your trusted advisors as you navigate through this challenging time.
Accounting for Change in Revenue
There is no doubt this pandemic crisis is affecting every single person, financially and emotionally. Staying connected to your staff, your community and your donors is critical at this time. Keeping your communication lines open mean you have a direct line to knowing what your team and community need. And there will be people in your community who can help.
What resources are available to you? On the federal level, the Coronavirus Aid, Relief and Economic Security Act or CARES Act, was signed into law on March 27, 2020. The $2.2 trillion stimulus bill is more than 850 pages with important help when it comes to donations and operational revenue for nonprofits. The Nonprofit Times article, 7 Ways CARES Act Financially Supports Nonprofits, outlines a variety of ways the CARES Act can assist nonprofits in their efforts for financial stability.
Another Nonprofit Times article, CARES Act: A Guide to Financial Resources for Nonprofits, provides a deeper dive into the specifics around the Paycheck Protection Program including FAQs. Applications for PPP loans must be done through an SBA-approved lender.
Local Grant Assistance
This is changing, almost daily. With more and more states, counties, and local organizations aiding those impacted by COVID-19, be sure to research local grants regularly as opportunities and deadlines approach quickly.
For example, the Berks County Community Foundation launched an emergency grant program to support nonprofit agencies in Berks County, Pennsylvania to assist them in their efforts to help others during the COVID-19 crisis.
Chronicle of Philanthropy compiled a list of foundations offering COVID-19 grant assistance in this recent article, Foundations Invite Proposals for Rapid-Response Grants (Coronavirus Roundup).
There always seems to be big impact at the local level. People and organizations are here to help. Be sure to organize your team to ensure you can submit your requests quickly and efficiently to maximize your chances of receiving aid.
Accounting for Change in Your Offerings
The tactical, day-to-day activities you perform are in flux right now. While public events are banned and face-to-face contact is strongly discouraged, people are adapting. Virtual meetings, virtual events, virtual fundraising, virtual outreach; staying connected to your members in different, creative ways lets everyone know you are there, in the thick of all this uncertainty, making a difference.
Don’t stop. Keep connecting with your community. Keep posting your success stories. During the very worst of times, your positive efforts can have a profound positive impact on your community.