How nonprofits can become – and stay – financially sustainable

Experts gathered an NYN virtual event on Wednesday to discuss key takeaways nonprofits should consider when figuring out how to stay financially sustainable despite the COVID-19 pandemic. Below are some of the suggestions proffered; a link to watch a recording of the event is here. 

Real estate: Real estate has long been a financial strain for nonprofits, especially in New York City. Paul Wolf, president of Denham Wolf Real Estate Services, said he’s seen some organizations abandon leases, sign on to more short-term leases or even close on leases they considered pre-pandemic but at a better rate. When looking at new potential office space in light of COVID-19, he highlighted three areas to consider to make it safe for staff: filtration, circulation and separation. “Specifically, if you own your space, if you have a below-market rent, if you have a purpose-built space – a theater, a health center, a school that was very expensive and time-consuming to create –  then please consider that this is the time to keep those assets within the nonprofit community,” he said.

Funding: The private lending market is available to help strong, creditworthy organizations, said Sunil K. Aggarwal, founder of ThinkForward Financial, while weaker organizations may yet have a few opportunities. A better option for organizations in the latter position is looking for specialty grant and loan programs created by foundations, corporations and community development banks, such as the NYC COVID-19 Response & Impact Fund. “My advice is, take advantage of these programs, be in constant contact with your local chapter of these (Community Development Financial Institutions). They not only provide funding but also a valuable source for other industry contacts, city agency contacts and provide technical and management advice,” Aggarwal said.

Collaboration: Engaging with fellow nonprofits is a key strategy to offer mutual support and advocate for policies they need, said Duncan Webb, president of Webb Mgmt. That can mean creating local districts to coordinate programs “down at the street level,” or joining together to create a marketing service organization. In some cases, that collaboration may even mean consolidations and mergers.