Managing through Economic Uncertainty

• Are we in a recession?
• What should nonprofits pay attention to about the economy?
• Managing through economic uncertainty: practical tools, guides, and webinars for nonprofits
• “Ask NFF:” Personalized advice for nonprofits
• Actions funders can take to bolster nonprofits
• Learn more about NFF

Bank failures. Persistent inflation. Volatile interest rates. Debates about the debt ceiling and whether a recession could be around the corner. All of these factors point to ongoing economic uncertainty. But what do they actually mean for nonprofits?  

NFF supports nonprofit leaders working tirelessly to promote equity and community well-being. We share advice, tools, and resources to bolster the nonprofit sector through the ebbs and flows of challenging times and advocate for practices to promote a thriving social sector. 

Whether the economy is doing well, doing poorly, or changing by the day, the resources on this page will help your nonprofit thrive. 

This July 2022 article published by the White House states that “The National Bureau of Economic Research … defines a recession as ‘a significant decline in economic activity that is spread across the economy and that lasts more than a few months.’”

However, it also acknowledges that, “While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle.” 

So, even the White House’s definition is subjective and somewhat murky. As much as the "R" word is being thrown around right now, it's unclear whether we're headed for a recession or not. 

NFF’s take? While a recession would certainly impact both nonprofits and individual people, other economic indicators are often simpler to understand, have clearer effects, and are more straightforward to respond to.

We suggest paying attention to: 

• Interest rates. These will determine the cost of getting a loan for your nonprofit.  

• Real costs. Are certain products more expensive right now? Paying attention to shifting prices can help you determine the costs of goods your nonprofit needs to buy – and estimate demand from the communities you serve. 

• Inflation. This will help you determine whether certain goods or services might be more expensive in the future, and is a helpful indicator to consider when planning your budget or forecasting cash flow in and out of your organization. 

• Bank failures. Oscar Perry Abello at Next City has written great pieces about why Silicon Valley Bank failed and what you can do to assess the risk of the banks and credit unions where you keep your money.  

So, as a nonprofit leader, what can you do to ensure that your nonprofit can weather economic storms and thrive long into the future? Keep reading for practical tips from NFF that have supported hundreds of nonprofits through economic highs and lows.

We know that ever-changing economic circumstances can create challenges for nonprofit leaders like you. In times of both uncertainty and stability, NFF is here to support you.  

The following resources include tools and guides that can help give leaders visibility and clarity into your financial story, help communicate your needs, and more. 

• 6 Ways Nonprofits Can Take Action Amid Economic Uncertainty (NFF, originally appeared in The Chronicle of Philanthropy)

• Tips for Nonprofits: Navigating a Possible Recession (NFF) 

• Cash Flow Tool: Predict When Cash Will Enter and Leave Your Nonprofit (NFF) 

• Nonprofit Budgeting Scenario Planning Tool (NFF)

• Tell Your Financial Story to Funders, Board Members, and Other Stakeholders (NFF) 

• Webinars to help nonprofits manage through uncertainty (NFF) 

  • While these webinars were created in response to COVID-19, much of the content they contain remains relevant to nonprofits continuing to grapple with economic uncertainty.   

Funders, you have a critical role to play in ensuring that the nonprofits you support stay strong through times of uncertainty. NFF’s Annie Chang offers funders several suggestions in a blog post that originally appeared in The Chronicle of Philanthropy: 5 Ways Foundations Should Help Grantees in an Uncertain Economy. 

Demanding too much information from your grantees can hamper their ability to do their critical work. Plus, it’s often not necessary. NFF’s Kristine Alvarez shares a few tips for how funders can simplify the process in her op-ed, which originally appeared in Candid’s Philanthropy News Digest: When Funders Don’t Know Finance. 

Additionally, much of the advice that Annie Chang and Kristine Alvarez share in these articles aligns with the advice we gave foundations in response to 2022's Nonprofit State of the Sector Survey and the COVID-19 pandemic. Read that advice here: 2022 Survey: What Funders Can Do.