The COVID-19 pandemic has become a difficult time when more people need help from non-profit organizations. However, the organizations themselves are experiencing issues with the current situation and need support. Many non-profit projects need government funding, which is the primary source of income for them. However, news reports indicate that despite the allocation of funds to pay for public services, some organizations do not receive them (Patterson, 2021). In this situation, the board plays the role of diversifying funding sources, restructuring costs, transforming the strategic plan, and communicating with the public and donors.
In meetings with the White House representatives, the CEOs of several organizations emphasized that people need more help nowadays. The Florida Times-Union reported on August 31, 2021, that the non-profit organizations faced a lack of “taxpayer money that Congress allotted to help America’s communities rebound from COVID-19 pandemic” (Patterson, 2021, para. 1).
However, government funding did not reach some non-profit organizations, including Feeding Northeast Florida and the Agape Community Health Center, which suffered significant financial expenses in the provision of services to the population. The article also indicates that the government has sent $ 10 million to the state (Patterson, 2021, para. 7). Additionally, it was noted that Jacksonville could be an excellent place to launch a direct funding program for service providers.
In this situation, the news underscores how important government funding is for non-profit organizations. Lu and Zhao (2019) identify that there is a positive correlation between government funding and an organization’s focus on program implementation. Thus, the more government funding a non-profit organization receives, the more efficiently it performs its functions and spends more resources to achieve its goal. This factor is also associated with another feature of such organizations, such as dependence on stable financing and difficulties with budgeting. In an article, the CEO of the Agape Community Health Center notes that her organization suffered a $ 50,000 financial hit (Patterson, 2021, para. 3). Thus, it is difficult for non-profit organizations to rely on a certain source of income.
The government funds non-profit organizations in a variety of ways through direct and indirect channels. In particular, the main part of the income of non-profit organizations is fees from the provision of services and the sale of goods (Fritz, 2019). However, payment for public services is also an important part of the budget of such organizations (Fritz, 2019). Specifically, the article points out that the Agape Community Health Center provided medical services to those in need that were not paid for by the government. In this situation, the role of board members is to communicate with donors in order to attract financing.
The main task of the board in non-profit organizations is to provide funding, strategic planning, and control over the achievement of goals. In particular, the leaders of the organization are responsible for fundraising and communication with existing and potential donors. In this situation, the state is a direct donor of non-profit organizations, paying for their services and financing operations. However, in an emergency such as the COVID-19 pandemic, members need to tackle more non-standard tasks. First of all, they need to find ways to finance current tasks since, with a sharp increase in income, they experience financial losses.
Cheng and Yang (2018) report that non-profits tend to “increase fundraising efforts and diversify revenue portfolios in response to incremental changes in the government spending environment” (p. 675). In situations of more radical budgetary changes, they resort to reducing administrative costs and reallocating resources for the operation of the program (Cheng and Yang, 2018). The role of the board is to reconsider the direction of financial flows in accordance with the priorities of the current position.
In particular, leaders of non-profit organizations must assess what resources are at their disposal and what tasks can be accomplished with them. In a situation of limited resources, the role of the board is to restructure costs and channel the largest amount of funds for the implementation of the program. Finding other sources of funding is also a priority, but in such emergencies, it can be challenging. To optimize the organization’s work, the board needs to monitor the execution of tasks and attract more volunteers. Leaders should evaluate financial resources and the number of services they can provide for them. It is also necessary to plan what financial sources can provide sufficient support. The main task of the board is to provide funding for all the needs of the non-profit organization while prioritizing the provision of help.
In this situation, it is important to pay attention to attracting support from corporate sponsors and the community. The role of the board is to contact all interested donors and seek all available resources. In particular, there can be not only financial resources but inventory, goods, volunteers, and more. Feeding Northeast Florida partners with a large number of commercial enterprises that provide not only financial support but also help with events, marketing, obtaining grants, and finding volunteers (Corporate sponsorship, n.d).
In the face of a sharp decline in government funding, the board is responsible for attracting as much private investment or participation as possible. The Agape Community Health Center relies more on collaboration with hospitals and community donations, which makes the organization more vulnerable to change (Our team, n.d). To increase stability, it is necessary to diversify funding sources without relying on specific financial channels constantly.
The role of the board is to directly attract sponsors and donors that are both stable and diverse. Government funding is the most durable in the long term, but corporate investors can quickly mobilize resources. Cooperation with private companies allows non-profit organizations to attract the necessary assistance in a short time. Feeding Northeast Florida notes that the organization “brought in more hands to help in our facilities and put more trucks on the road” (COVID-19 update, n.d). Such actions require the board to make quick decisions about seeking additional funding or using existing assets. It is also essential to form a new strategic plan, which is aligned with the new external conditions.
In the news article described, CEOs met with government officials to report their funding issues. In this situation, it is crucial for the board to articulate its expectations and needs in order to get a response from donors. Without CEOs speaking in support of their operations, this issue could go unnoticed and give the government a misconception about the situation. In particular, it is vital for the board not only to report on the results of its programs but also to provide stakeholders with the correct information about the events occurring. Non-profit organizations are most familiar with the processes that exist in society, and the role of the board is to raise people’s awareness of the problems.
Nowadays, non-profit organizations need more support to help people. However, an emergency may also involve increased demand and more limited resources. In this situation, the role of the board of a non-profit organization is to attract as many corporate and public sponsors as possible, optimize operations, align strategy, and communicate with the public. The main task in the event of an unexpected change in income is rationalizing available resources and working on the diversification of funding sources.
References
Cheng, Y., & Yang, L. (2018). Providing public services without relying heavily on government funding: How do non-profits respond to government budget cuts? The American Review of Public Administration, 49(6), 675-688. Web.
COVID-19 update. (n.d). Feeding Northeast Florida. Web.
Fritz, J. (2019). How non-profits generate revenue streams. The Balance: Small Business. Web.
Lu, J., & Zhao, J. (2019). How does government funding affect non-profits’ program spending? Evidence from international development organizations. Public Administration and Development, 39(4), 1-34. Web.
Our team. (n.d). Agape Family Health. Web.
Patterson, S. (2021). New COVID aid ‘has not trickled down’ to Jacksonville non-profits, White House team is told. The Florida Times-Union. Web.