These are uncertain times for nonprofits. Most are heavily reliant on grants, endowments, corporate support, government assistance and individual donations to support their missions and programs.
For some organizations, support and fundraising are stronger than ever as donors have stepped in during these challenging times. However, many more are facing increased demand for services coupled with significant disruptions to their funding streams. A recent survey of 1,000 California nonprofits by the California Association of Nonprofits found that nonprofits are experiencing “…financial fears, difficulties with government contracts, and deep suffering in communities”—24% had laid off or furloughed staff, 12% had reduced compensation and 26% have been unable to mobilize as many volunteers as before. In a Nonprofit Finance Fund survey, 64% of 465 respondents said they are experiencing threats to their long-term financial stability.
While PPP loans and supplemental unemployment benefits have provided some relief, the environment remains challenging, with uncertainties surrounding ongoing COVID-19 cases, a new presidential administration and the pandemic’s global economic impact.
In response to COVID-19, nonprofits have transitioned most of their fundraising to virtual formats, with social media, video conferencing and online hosting platforms enabling activities such as virtual galas, runs, walks, silent auctions, peer-to-peer fundraising, crowdfunding and others. But, while these efforts can be effective, the loss of in-person activities is significant.
Many nonprofits are looking for partners who can help them reshape how they operate.
Like all businesses, nonprofits need strategic financial planning to survive times of uncertainty and to thrive when the crisis is over. That also means assessing their business models, reflecting on social purposes, identifying economic viability and assessing capacity to deliver program services with the resources they currently have.
To help create and execute those plans, they’re looking to corporate and individual donors, corporate and private vendors, public agencies and financial institutions. Many turn to their banks to help identify areas for improved efficiency, to mitigate risk and increase connectivity with other organizations and, in some cases, for hands-on participation.
In the Southern California region, Banc of California provides that needed expertise and consultative service. A regional bank with a community bank culture is deeply connected to community organizations and nonprofit businesses throughout the region, providing access to financing and consultative financial services that regional and local organizations can rarely get from major national banks.
According to Jay Sanders, president, Private and Specialty Banking, a banking partnership goes above and beyond banking services. “Nonprofit organizations have similar objectives and goals, but each is independently unique and different in how it executes and achieves its goals. Part of our role in a banking partnership is asking hard questions to truly understand our clients’ underlying challenges and identify opportunities to maximize their efficiencies so they can continue delivering relevant social impact over the long term.”
Banks can connect like-minded organizations for their mutual benefit.
One of the most important benefits of working with a bank specializing in nonprofit banking is the potential for being introduced to other organizations with similar goals, for consultation or joint efforts. James Do, Banc of California Senior Director and Head of Nonprofit Banking, believes that this is an important and sometimes underappreciated benefit. “We promote the idea of sharing best practices and, when appropriate, actual collaboration promoting shared causes,” he asserts. “It raises general awareness and can help grow the pie.”
Access to expertise and assistance can be as valuable as access to capital.
To Jay Sanders, the key is access not just to capital, but to expert advice. “That’s why we’re strong in the nonprofit space. It’s embedded in our core vision and values. We take great pride in supporting organizations and activities that enhance the quality of life in the communities where our customers and employees work, live and do business. And because of that, we have invested and built a dedicated infrastructure to support our nonprofit clients.”
James Do is head of Non-Profit Banking at Banc of California. His focus has been in the nonprofit banking sector for the past decade, working with both smaller regional and larger national nonprofit organizations. He can be contacted via James.Do@bancofcal.com or at (424) 239-2796.
For more information about Banc of California’s nonprofit services, visit Bancofcal.com/LAnonprofit or contact James Do.
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