A Recession is Coming: Preparing Your Organization

By Amberlie Phillips

Half of Americans think a recession is coming in the next year, and after The Great Recession, the thought of another one is enough to give even the most seasoned nonprofit executive nightmares! It is important that you take steps now to prepare your organization, and here are three basics to get you started:

  • Maintaining financial transparency with board members and executive staff, so they are not surprised if a financial crisis hits and cuts must be discussed sooner rather than later.
  • Staying in contact with major donors. This is always a best practice, but now is not the time to neglect these important relationships! Meet with them to share your successes and express your gratitude, but also be prepared to share your concerns about a looming recession. Make donors partners in both the ups and downs of your work.
  • Strengthening reserves. While the level of cash needed in reserves may vary by organization, a good rule of thumb is three to six months of operating expenses. Assess your current reserve and identify strategies to bolster that savings on a regular basis. Small sacrifices now will be easier than large cuts later!