Steady Advice for Changing Times

Hello Avocados!

April is here and we have a new issue just for you that's all about change. Change is exciting! Change is scary. We have articles this month that provide a little stability.

How do you keep a firm financial footing as a nonprofit? Strong leaders have options when it comes to getting loans and funds to help cover operating costs. If you go the traditional route, we have a helpful article on working with your banker. If that doesn't work or isn't appropriate, we have an article on a new lending program which only serves nonprofits. Worried about federal funding cuts? Take the Blue Avocado survey and we'll share the results next issue.

On top of ALL that, we have a terrific article on resilient leadership and an equally great essay on facing new challenges. Next month, we welcome our new editor, so tell us what you want to see, what's happening in your organization and how Blue Avocado can help! We're always listening at editor@blueavocado.org.

What kind of avocado do you want to see?

As we get ready to welcome our new guest editor, we want to hear from you! What kind of avocado do you want to see?

Let's face it, sometimes running a nonprofit can feel about as easy as folding a fitted sheet, but here at Blue Avocado, we want to help. For years now, we have been a practical and straightforward source for information related to running a community nonprofit, and now we're moving forward into our next iteration. We're so thrilled that you're still with us as we continue to grow, and we want you to be a part of the process.

How to Work With Your Banker Amidst Change

With more than 25 years of banking experience and an equal tenure serving the Portland, Ore., community with Catholic Charities, Impact NW and other organizations, Kathy shares this advice for how to help your banker to give your organization as much credit as possible.

In the past, nonprofits tended to be asset rich with limited need for credit. Times have changed, however, now that constrained governmental funding, and lower charitable contributions are continuing for the foreseeable future. No banker wants to be the bad guy or to say no to an organization that is doing good work in the community, but a nonprofit borrower that starts to struggle can fall quickly from an acceptable risk to an unacceptable risk, threatening the viability of the organization and the essential services they are providing to the community.

This article seeks to provide several ideas for how a nonprofit can address the impact of these trends in order to help a bank to assist this transitional period through providing credit lines or term loans. The suggestions and the bank's perspective on financial performance can be grouped under the two distinct concepts: conservative financial management and institutional agility.

A Milestone in Nonprofit Lending

Hello Avocados! We wanted to share this exciting milestone from the Nonprofits Insurance Alliance of California, founding and ongoing sponsor of Blue Avocado.

In January 2017, the Nonprofits Insurance Alliance of California (NIAC) reached $2 million in lending through its pilot loan program. The Loan Fund offers short-term credit to small and mid-sized nonprofit members of NIAC.

When NIAC first developed the fund we wanted to create an efficient solution to the cash flow needs so common in nonprofits. We received survey responses from 300 nonprofit organizations and found that getting access to cash flow loans through a quick and efficient process that demonstrated understanding of nonprofit financials was darn near impossible. Many nonprofits showed a need for short term loans while waiting for confirmed grants and contracts to be funded. Thirty years ago NIAC took up the challenge of proving that nonprofits were not poor insurance risks and we decided it was time to try to show that nonprofits were also good credit risks. So, we developed a pilot program in 2014 with $1 million of loan capital. Another $500,000 in loan capital was added the next year to meet demand. The NIAC Member Loan Fund provides 12-month loans up to $50,000 at a fixed six percent interest rate.

How do federal funding threats affect you?

It's time for our next Blue Avocado Poll. Does your organization rely on federal funding? Are you discussing the possible budget cuts at the federal level? What are your contingency plans? Please take a minute to tell us what you are seeing, and we'll share what we learn in the next issue. (Responses are all anonymous.)

Beyond the multiple-choice questions, we also invite you to tell us your stories about the potential effect of funding cuts for your organization. Sharing your contact information is totally optional, but if you do, we'll follow up to find out more and plan content for Blue Avocado that can help.

Begin the survey here!

In These Turbulent Times for Nonprofits

2017 has already brought many new challenges for the service sector, and we can expect more to come. So, there is no time to waste in getting ready for whatever changes your nonprofit may face.

As leaders, we are continually using internal and external resources as successfully as we can to solve new problems and rebound from adversity strengthened, and yes, even more resourceful. In this article I suggest ideas to help weather the storm and benefit from the disruptions.

How To Be a Community-Powered Nonprofit

Accusations of fake news are all over the news. So when donors want old-fashioned, honest information, they are turning to nonprofit news organizations they trust. We asked consultant Kevin Davis, who works with many of these nonprofit journalism organizations, to explain how they are working to gain donors' trust by being community-powered. Pro tip: Any nonprofit communications strategy can benefit from these smart lessons!