(Photo by iStock/Portra)
In 2008, I was the executive director of our flagship Portland chapter of Friends of the Children when our economy sunk into the Great Recession. As a nonprofit that makes a 12+ year commitment to each child we serve, no matter what, our first priority was to ensure we could hold onto all staff so they could continue serving our youth. We had to cut back in some ways—putting a hold on 401K matching contributions for the year (which we then made up for the following year), for example—but we were able to avoid staff layoffs, and by slowing new enrollment into the program, we kept our commitments to the youth and families already enrolled.
Other chapters in our national network, unfortunately, did not fare as well; two chapters closed. This was incredibly painful, and we vowed we would never be in that position again.
When I became the national CEO of Friends of the Children in 2012, I took some of those lessons learned, along with previous experience as a Certified Public Accountant, to set up our national network for financial stability. And though, like most other nonprofits, we’ve never experienced anything quite like COVID-19, we are reimagining our service delivery model while also working to assess all possible options for shoring up our national network (which includes 22 locations around the country and in the United Kingdom).
We don’t have everything figured out yet. But here are some of the actions we are taking to be fiscally responsible in the uncertainty our country faces right now:
- Prioritizing stability: To continue serving current youth and families, we are pivoting away from our national expansion campaign. While it’s hard to press “pause” in communities that already were building momentum for launch, we know it’s the right thing to do at this time. We are also working to ensure employee well-being: Our staff is our most precious resource. Like all businesses, we juggle keeping the business running, while ensuring our staff feel supported while working remotely. Together with each staff member, we have built individual work plans tailored to their unique circumstances. We are also connecting more often (and in fun ways) to ensure our staff feel connected to the work during this difficult time.
- Tracking and applying for COVID-19 funds: We are aggressively tracking and applying for dozens of national and local funds created to support nonprofits through this crisis. In just a few short weeks, we have been in awe of just how many foundations, communities, and individuals have quickly come together to support people-serving nonprofits. We are also taking the opportunity to take out SBA loans, which were made available as part of the $2 trillion economic relief package. It is a fiscally responsible option for our network, as well as most nonprofits that are considered small businesses. One of the requirements is that nonprofits need to sustain current staffing levels, which is in line with our priorities for employees and our organizations. And while many insurance policies have virus exclusions, we are working with attorneys with expertise in insurance recovery to assess what coverage, if any, may be available. (The advice they have given, which other nonprofits should consider, is to not take “no” for an answer from insurance companies just yet.)
- Leaning on our funders: We are grateful that several of our funders are offering more flexibility in meeting grant requirements, such as the number of hours our Friends spend with each child. With schools closed and social distancing orders in place, we are serving our youth virtually, but the digital divide is still taking time to work through. We are also requesting expedited delivery from funders for payments that were already in process or due in the near future. Several of our funders have reached out to us proactively asking how they can help, but we are also making personal calls to current funders. Since we are living in a totally new world, we are making sure our champions feel connected to how we are adapting. We stay focused on maintaining relationships with current funders by making personal phone calls to share stories of hope and our challenges.
- New fundraising: We typically disseminate about 80 percent of funds we raise nationally through grants to support chapters. Our chapters are all independent 501c3s and lead the vast majority of their fundraising locally, but we are working tirelessly to identify opportunities our chapters can take advantage of. Like most other nonprofits, the national office and chapters are launching aggressive digital fundraising campaigns. In just three days, we were able to raise more than $200K, thanks to a matching grant opportunity with the Stand Together Foundation. Our Boston chapter was recognized for its swift response on behalf of families disproportionately impacted by the crisis by The Boston Foundation.
- Looking for tech companies to donate digital devices for our youth: Under normal circumstances, our Friends meet in person with each child three to four hours a week. We are quickly learning that some of our families have no devices at all, others share among multiple household members, while others don’t have consistent access to the internet. We are reaching out to potential funders to help bridge the digital divide. Bill Davenport, a senior director at Apple, generously donated more than 100 new iPads to help our Friends stay connected with our youth. Some chapters have had success securing devices locally, but there is still a great need.
Preparation Begins Before the Crisis
Before expanding, we built in several safeguards to ensure that our new chapters would be sustainable, and we are particularly grateful for several targeted actions we took, which included:
- Raising enough capital to sustain the organization for a few years: We require that all new chapters raise at least three years of seed capital. This allows them to focus on building a strong program, while giving them a runway to continue fundraising for future years. Existing chapters also strive to have 30 percent of their revenue coming from multi-year gifts, which also creates a foundation of stability and maximizes donor retention.
- Diversifying funding streams: We require a diverse funding stream for each chapter launched, with no more than 30 to 40 percent of support coming from one single funder. In 2008, we lost one chapter because the primary funder could no longer fund our work. In the past several years, we have also increased our government funding sources. Through the Corporation for National and Community Service’s Social Innovation Fund, we received a $4 million grant, which was passed onto chapters. We have also received more than $6.5 million in grants from the Office of Juvenile Justice and Delinquency Prevention.
- Ensuring community support was strong: We don’t launch new locations unless there is potential for significant community support. We only go to places that invite us to come and see us as a way to fill an existing service gap. We also hire executive directors who come from the community and who have a background in fundraising. Seed capital comes from local foundations and philanthropists who become personally invested in our work.
The Future
We are still only a few months into the crisis, and there is still a lot of uncertainty. We are not planning layoffs; we are remaining nimble, while keeping in close communication with our network, taking all possible steps to preserve our ability to continue serving youth. But people-serving nonprofits must totally reimagine the best way to provide services, something which has taken a significant amount of planning and checking in with chapters. We’re sharing what’s working, moving away from what isn’t, and finding new ways to explore keeping up our relationships with youth.
Our specialty is serving youth and families who have big dreams and who face great challenges. As we live through this unprecedented situation with COVID-19, our top priorities are to keep serving all of our youth and their families, make sure our youth are safe, their needs are met, and that they have the opportunity to continue to learn. We are a long-term, ‘no matter what’ organization, and we are relentless so our youth can be resilient.
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Read more stories by Terri Sorensen.