Recession Proofing
If you've been watching the news reports or even keeping an eye on social media chat, then you've seen hints of a recession in the wind. People are complaining that food prices have increased, both in the grocery stores and restaurants, and retail prices have increased and discounts are not nearly as low as in past years. Travel is on the rise, and so are the prices to enjoy the things that truly seem to be more of a luxury these days.
When I was a young mother with a newborn, I made sure to "baby proof" my home. That meant, covering electrical outlets with plug protectors, shielding sharp-edged countertops with plastic guards, using gates to keep my toddler in a safe space and safe from a potentially dangerous fall.
As a non-profit leader, I "recession proof" my organization. Recession proofing is a way of protecting your nonprofit from sudden dips in the economy which might cause revenue losses or huge unexpected expenses.
A recession can seriously impact the ability of nonprofits to raise funds, carry out programs, and continue serving their communities. However, there are steps that nonprofits can take to prepare for a recession and minimize the impact it has on their organization. Here are some tips to help nonprofits prepare for a recession:
1. Diversify your funding sources
Nonprofits should actively work to diversify their funding sources, so they are not solely reliant on one or two sources of funding. This could include seeking grants, corporate sponsorships, individual donations, and fundraising events, among others. By having multiple sources of funding, nonprofits can buffer themselves from the economic impacts of a recession.
2. Create a contingency plan
Nonprofits should create a contingency plan well before an economic downturn hits. This plan should include strategies to reduce expenses, cut costs, and prioritize programs and services. By having a plan in place, nonprofits can act quickly to maintain sustainability in times of crisis.
3. Keep fundraising going
Organizations may be tempted to stop fundraising during a tough economic downturn, but it is essential to keep fundraising efforts going. It is important for nonprofits to remain top-of-mind with their donors and supporters, even during difficult times. Consider creative fundraising techniques that are cost-effective, such as social media campaigns, crowdfunding, and virtual events.
4. Build relationships with donors
Nonprofits should seek to build authentic relationships with their donors and supporters, so that they remain loyal to the organization during challenging times. Communicate regularly with donors about the impact of their contributions, and show them the positive difference they are making in the community.
5. Leverage technology
Technology can help nonprofits streamline their operations, reduce costs, and reach new audiences. Embrace digital tools and platforms that can help automate processes, facilitate fundraising, and enhance communication with donors and volunteers.
6. Collaborate with other nonprofits
In times of uncertainty, nonprofits should work together instead of competing against each other. Collaborating with other organizations can help nonprofits maximize their resources and reach, while also enhancing their collective impact in the community. By the way, funders love it when non-profits come together to solve an issue,
By following these tips, nonprofits can prepare for a recession and mitigate the impact of economic downturns on their organizations. With proper planning and management, nonprofits can continue to serve their communities and make a positive difference, even in times of reduced financial resources.