After presenting at the 2020 Virtual Annual Meeting of the American Society of Association Executives (ASAE), attending many sessions, and interacting with fellow attendees and content leaders, I observed four powerful fiscal and financial management strategies that are being universally adopted by most proactive association and nonprofit CEOs.
The four strategies that continued to surface and be discussed and explored in sessions and side conversations were:
Heightened sense of awareness, planning and management around operating reserves
Committing to regular short-term forecast updates
Fearlessness related to embracing change
Renewed emphasis on board, leadership, committee and member and donor communications
There was a universal hunger to share information around these four strategies. Each discussion spurred robust sharing of steps taken, what worked and what didn’t work, with interactive cross-examination. Each of these discussions was worth a million dollars. In just a few minutes I learned so much. The take-aways were very powerful and the opportunities to challenge each other were extremely beneficial for future planning.
From my perspective, operating reserves were foremost on everyone’s mind. There was general acceptance that operating reserves were under assault. That most operating reserve policies, if in place, were old and inadequate to serve current times. However, most CEOs recognized this difficulty early and moved quickly to protect operating reserves and heighten everyone’s sensitivity to the pitfalls of deficits. A popular approach involves “metering-out” operating reserves, as I’ve outlined here.
Committing to regular short-term forecast updates has quickly become an accepted best practice. This was reassuring to me, as I personally pivoted to this practice early. We all learned quickly that this pandemic had no real historical reference to model off and plan around. Everything around us was changing in ways we could not predict. Consequently, rolling short-term forecasts was the only vehicle available for processing and incorporating new information as a basis for proactive strategic management decisions. Many organizations have found the “3 Month Rolling Budget Template” that we posted here to be a helpful document for this process.
I believe the short-term forecasts were the incubator for fearlessly embracing change. This was unexpected to me. I was amazed and continue to be in awe of how proactive CEOs and their organizations have regrouped and embraced change. I expected nonprofits to go into the usual “wait and see mode” which would have been a disaster. Associations and other nonprofits are adopting innovative new methods to deliver on mission and provide much needed services to their constituents. In good times nonprofits are important, but in bad times they really shine. This reminds me where the passion in the nonprofit community comes from and what drives success.
Finally, it was clear that effective and high performing CEOs have adopted more robust communication with leadership, membership, donors, and the general public. A crisis always leads to unease, caution, and, in this case, real fear. Thoughtful, timely, and regular communications will temper these feelings and help to restore a sense of calmness and trust. From my perspective, effective financial communications help all to feel better about sustainability and continuity, as I discussed here and here.
Planning Tip – Of these four strategies, communication is the most outward-facing strategy. Give this strategy a special emphasis. Review how you currently communicate financial information and overall information to your leadership and the general public. Now is a good time to explore and adopt new approaches that better tell the story of how your organization has navigated this crisis. Avoid plug and play where information is just updated with new dates and numbers. Do not hesitate to seek feedback on these new approaches from users and make changes when appropriate.
Sit back and think about these four strategies. Seek to share information inside and outside your network. Whether you agree or disagree with the strategies used by other professionals, your internal thought-process will be sharpened and invigorated.