Building a Robust Future: Operational Resilience Strategies for Nonprofits

Uncertainty is the nonprofit's bread and butter – an aspect of the business that, while mitigated somewhat by careful planning, is almost never eliminated entirely. 

2023 forward, the world nonprofits operate in is beset by a number of risk factors, ranging from global disasters like COVID to various humanitarian crises. An impending economic crisis, the looming specter of climate change, and the ongoing sociopolitical conflicts across continents make it a challenge for nonprofits to distribute their limited resources adequately. Nonprofits cannot possibly plan for every possible contingency, nor can they do much to provide relief without a steady stream of funding – which, of course, is also impacted by these events.

It can seem a losing game; in fact, it is anything but. Nonprofits are following best practices for fundraising, allocating resources as best they can, and administering aid to a vast array of impacted populations. Nonprofits are still serving; but they have communicated that they are struggling far more than they need to be in the era of technology. 

Nonprofits need to find a way to build resilience, boosting their efficiency and impact. Fortunately, they can do so. This article will break down three key principles to build resilience in this challenging economic landscape, empowering nonprofits to continue their good work and serve communities through crisis. 

Risk Management

As explained above, the notion of risk is one that nonprofits are very familiar with. However, proactively taking measures to reduce risk is absolutely crucial if nonprofits want to mitigate their impact. To do so, nonprofits should look into:

• Diversifying revenue streams: The eternal problem of finding more donors. This is made much easier with the help of a CRM, as CRM solutions can provide a degree of market visibility that nonprofits may not presently have.
• Improve board governance: Stack the board with people that have diverse skillsets, and have some experience weathering difficult economic climates. Regular risk assessment meetings are an absolute must, as is constant communication to provide visibility into the organization’s inner workings.
• Keep a weather eye out: Sudden incidents are inevitable, but the market/news will often forecast disasters before they occur. Keeping a pulse on the news, and making strategies just in case, will save you a major headache. 

Following risk management best practices is one of the most consistent ways to attain operational resilience – to keep sustaining operations through times of unparalleled crisis. Assessing your weak links, compiling a high-level view of internal and external risk factors, and constantly stress-testing operations will help insulate you from sudden disaster. 

Adaptability and Contingency Planning

It’s equally crucial to remain flexible, as again, there are things you just can’t plan for. Nobody imagined in 2019 that a global pandemic would spread like wildfire in 2020, or anticipated the devastation that followed – yet, that time put significant stress on unprepared nonprofits. 

Achieving the level of adaptability that is required to handle such incidents, ironically, takes planning. Always leave room in the budget for unexpected occurrences, and when news trickles in that something major may be coming, have a premortem brainstorming session with your colleagues. These sessions allow minds to meet, anticipating and developing responses to a wide variety of potential scenarios that take probable risk factors into account.

Additionally, you can:

• Spread risk awareness within your organization, encouraging employees to proactively identify and report potential problems before they become concrete issues. Risk management is a team effort, and should your employees not know what they’re looking for or how to report it, completely avoidable crises can compound quickly.
• Develop contingency plans. Whether your concerns are of the cybercrime variety, related to the supply chain, or based on HR-related issues, you should strive to map out procedures that are as thorough as possible to address them. Proactively having processes in place to handle these concerns will save you a major headache when they do eventually occur.
• Conduct regular risk assessments. Risk assessments take a wide variety of internal and external factors into account, and highlight the areas where your organization’s defenses are most likely to crumble. Doing this often will help you allocate your resources to where they’re needed most. 

Planning for as many contingencies as possible is another way to achieve operational resilience, ensuring that your nonprofit can weather the concerns that will inevitably crop up. Whether those factors are internal or external, macro or micro, having a team behind you that understands the possible risks and is prepared to respond is key. 

Building a Sustainable Future for Nonprofits

For nonprofits to continue doing their good work, and to serve as many of their benefactors as possible, they must be financially stable. Fortunately, there are a number of ways to embrace financial stability that are in line with nonprofits’ values of sustainability. 

You don’t have to front a bunch of cash for technology, or compromise on your values, to build a strong operational foundation – you just need to be fully aware of the risks you may face. We hope this guide will be helpful to you as you chart a course toward a better financial future.