Picking Between Mission and Financial Health and Sustainability: Which Comes First?
In the short-run you must pivot to favor financial health over mission so you can make it to the long-run and deliver more on mission in the future. Ensuring your organization will be around a long time will be the single most important factor to sustaining and then increasing delivery on mission.
During a crisis, the answer is easy – financial health and sustainability must be preserved above all else. With long-term mission as the number one priority, short-term continuity and survival take precedence.
Throughout a time of great disruption and uncertainty nonprofits are at biggest risk of experiencing unexpected negative cash flows. Suddenly, once reliable sources of funding surprisingly start to disappear more quickly than expenses can be pulled back. If your nonprofit is not careful and is slow to react, the negative consequences can multiply quickly.
Two important facts of life to keep in mind: First, the need (the mission-based reason your organization exists to serve) is always greater than your resources. Second, if you disappear or are greatly diminished in size, your capacity to do good and fulfill your mission will cease to exist. The only way to guarantee that you can do more to support your mission is to maintain and build a financially healthy organization that will be sustainable and thrive well into the future.
Financially weak nonprofits live a daily battle managing large accounts payable balance while trying to maintain enough cash to meet their next payroll. For these nonprofits, pivoting to protecting financial position at the cost of less mission delivery is the only path because if they continue to bleed cash they will die quickly.
Financially strong nonprofits have the blessing of operating reserves. However, they also have the curse and hard choice of figuring out how much to use their operating reserves to support funding short falls. The COVID-19 crisis is not a short-term crisis, so even strong nonprofits must quickly limit their use of operating reserves to support mission and operations and pivot to protecting their financial health.
Planning Tip – Do not wait for the question to arise. Be proactive with communications to your Board, constituents, staff, and even the general public, and let them know that you are not moving away from mission. Communicate that your nonprofit is in the fight for the long-run and that strategic short-term repositioning and re-aligning of programs are part of a thoughtful process to best position the organization to be sustainable and vibrant for recovery and the future.
Simply put, it is OK to do less mission now so you can be in the best possible position to do more mission in the future.
