Recessionary Reminders for Nonprofits

Could a new perfect storm of dangerous financial trends await some independent schools and many other nonprofit organizations? In this editorial, Nonprofit Quarterly Editor in Chief Ruth McCambridge cautions nonprofit arts organizations to exercise more financial prudence than usual in the current uncertain political and economic environment, particularly given the aging facilities and other deferred maintenance issues that many of them face. Her reminders are relevant to schools as well:

• Keep fixed costs low.
• Keep liquidity and reserves high.
• Be proactive about maintaining relationships with donors regardless of cutbacks.
• Educate your board on risk factors and potential scenarios.