Like every other organization, your not-for-profit is probably working hard to negotiate the challenges of high inflation and other economic threats. So you’d be forgiven for concentrating more on stretching every dollar than on your staffers’ financial anxieties. But as some high-profile employers start laying off workers, your employees may worry about the security of their own jobs. To keep your operations running smoothly, it’s important to clearly and honestly communicate information about your nonprofit’s financial situation.

Showing leadership

Many nonprofits not only are contending with inflation, but also are still struggling with the effects of the COVID-19 pandemic, such as higher demand for services and reduced donations. What’s more, some experts are predicting a U.S. recession in the near future, while others are saying we’re already in one.

So there may be several reasons for your staffers to be concerned about your organization’s future. Be open with them about where you stand now and how you expect to fare financially in the coming year. You may want to provide some personal opinions to build rapport and ease anxiety. But your core focus should be on the facts and how you’re responding to and anticipating events.

Just knowing that leadership is listening and has a plan is enough to help some people go back to focusing on their work. However, employees must feel confident that your plan is well considered and likely to be effective. They also need to know that you’re being candid with them. Solicit staffers’ questions and answer them truthfully, even if the only thing you can say at the time is “I don’t know.”

Addressing layoffs head-on

Regardless of whether the fear is actually voiced, layoffs may be on staffers’ minds. Before they even ask, broach the subject to show you understand their concerns. Just be careful not to make promises you might not be able to keep. Although it’s fine to talk about the steps you’ll take to avoid layoffs, most leaders would be remiss to categorically deny that layoffs are an option.

It’s not enough to hold one meeting about the state of your nonprofit’s finances and then go back to business as usual. Keep staffers informed with frequent updates, using the methods that are most efficient given your workforce’s location. In-person or face-to-face video conferences are best for announcing big developments.

Empowering stakeholders

It may seem like only last week that nonprofits were scrambling to hire enough workers to fill open positions — and, in fact, some still are in hiring mode. Perhaps your organization is currently in good financial shape. But if your budget begins to feel tight, be proactive and communicate the financial facts.

To help employees feel empowered, involve them in cost-cutting measures. For example, ask them for suggestions and make individuals personally responsible for managing specific tasks. For help budgeting and managing inflationary pressures, contact us.

© 2022