As you are aware, the current Administration has issued a series of Executive Orders that will have significant implications for the nonprofit sector. Additionally, the Office of Management and Budget (OMB) announced a freeze on nearly all federal grants and loans. Although a federal judge temporarily halted the freeze before it could take effect, it still caused significant concern and confusion across the sector. Since then, OMB has lifted the federal funding freeze. Nonetheless, it’s essential to understand the broader context of these actions and take proactive steps to safeguard your organization moving forward.
What steps can you take now?
Gather Information:
While it may be challenging to determine the specific impact on your organization until official guidance is issued by funders, it is crucial to start by reviewing the Guidelines for Federal Agencies. This will help you assess if your program is included and allow you to cross-reference it with the program numbers listed in the document. Additionally, make sure to stay informed by regularly monitoring updates from relevant associations:
- Follow the National Council of Nonprofits (NCN) for the latest news and resources: councilofnonprofits.org.
- Stay connected with your state’s nonprofit hub for advocacy and initiatives related to the executive orders: njnonprofits.org (NJ), www.nycon.org (NY).
Develop a Plan:
Now is an ideal time to conduct a thorough cash flow analysis. Utilize tools like the MNA’s cash flow projection tool to evaluate your current financial situation. This will enable you to plan for potential disruptions in funding and make more informed decisions as you move forward. As part of your strategy, consider utilizing a line of credit if accessible. Additionally, assess the necessary steps regarding staffing in the event that a funding freeze occurs or another similar event.
Engage in Scenario and Budget Planning:
Gather key stakeholders for a collaborative scenario and budget planning session. By examining potential financial outcomes based on various scenarios, you can gain a clearer picture of your organization’s financial health. MNA’s budget and scenario planning tool can support this process by providing a structured approach to understanding how best to allocate resources and adapt to changing conditions.
Communicate Transparently:
It’s essential to keep all relevant parties informed about potential impacts. Make sure to update your board of directors, the individuals you serve, donors, and staff on the current situation and your organization’s response. Clear and consistent communication will help maintain trust and support as you navigate this period of uncertainty.
Stay Vigilant:
Many individuals may try to exploit this situation for personal or financial gain. Remain cautious and vigilant for email scams and phishing attempts, particularly those claiming to be from the government.
SAX will continue to monitor this situation and keep you informed as new developments arise.
For questions, feel free to contact a member of the SAX Nonprofit team.