Many organizations are experiencing the compounding effects of COVID. Unfortunately, these are not usually positive.
Usually we think of the compound effect when it comes to our money – either in the form of interest we pay on credit cards or the interest earned on money in the bank. For example, let’s say you have $100 and receive $5 in interest in August. The next time you receive interest, you will receive it on $105, so your interest may be $6.50. It’s easy to see how, over time, the numbers will continue to get bigger and bigger.
But, the compounding effects of COVID have not been so beneficial to nonprofits and ministries.
Some areas where the compounding effect is taking place —
Organizational Culture and Morale – Culture can make or break an organization. The internal culture is a reflection of the organizational values, how staff and volunteers perceive their role and value in an organization and what is really important. If the culture and morale of an organization were not great before COVID, they have probably deteriorated. You may be experiencing people leaving the organization, becoming less interested and committed to their work or perhaps a bit of an attitude is showing.
Very gently, I want to tell you that these problems did not just pop up because of COVID. If you are having a morale or culture issue now, it existed before COVID but the people in your organization were able to push it aside because they were busy. Or, they simply ignored it. As people have spent a lot of times in their homes and away from their work families, the problems and concerns that existed at work are being magnified in their minds.
Volunteers – We know that for many organizations, volunteers are essential if not crucial to the work of the organization. However, you may be finding that it is a struggle to get volunteers now because of COVID—perhaps they are afraid of catching the virus or are just overwhelmed with the demands COVID has created.
For nonprofits and ministries, the very real challenge is that your volunteer base may need to be completed re-developed. Some of the volunteers who previously served with the organization may never be back. So, while volunteers are needed NOW, be very careful to only take volunteers who align with your organizational culture and values; there is no sense in creating headache later.
As you recruit volunteers, be wary of getting too comfortable. In other words, always be recruiting—looking for additional volunteers. Your organization may need a plan in place to attract younger volunteers (and, what attracted older volunteers to the work of the organization is probably not going to work with the younger crowd).
Donors – Obviously, COVID has caused a significant financial challenge for many organizations and for many individuals. COVID has highlighted for many organizations the need to have a “fund balance.” A fund balance is an emergency fund, developed in much the same way that one is developed in your personal budget. Far too many organizations were really operating on a “paycheck to paycheck” basis.
Additionally, COVID has magnified the need to have a diverse funding base. In other words, when the organization relies on just a few sources of income, and loses one of them, the gap left is much larger than when there are multiple funding streams.
Lesson learned here is to be continuously working to diversify funding streams through government grants, philanthropic grants from both foundations and corporations, individual donors and special events. This means working to build a strong donor base, one that you are continually adding to, thanking your donors and staying in touch with them to let them know what is going on.
The compounding effect does not have to be negative for your organization. But, to turn the negative into a positive will take dedicated, conscious effort. So, while you have a minute, begin laying out some plans to overcome the negative compound effects COVID has had on your organization.