MANAGING CASHFLOWS THROUGH COVID-19

Your UHY nonprofit audit team realizes that the current COVID-19 situation is already having a negative impact on many of our clients. Organizations are in the position of having to analyze cash reserves as they are faced with the decision on if or how long they can maintain payroll or other pertinent operating expenses. Lost revenues from fundraising events and earned program revenue are already impacting a great number of organizations.

Although it is not possible to reliably estimate the length or severity of the situation, we are advising our clients to evaluate the need for some proactive steps that may help ease cash flow issues. Below are some potential cash/revenue infusions to consider as you begin to assess if your cash reserves will outlast the return to normalcy.

• Understand your monthly cash commitments. Review your budget to determine required monthly expenses versus discretionary activity that will now not be happening (i.e. travel and meal expenses).
• Review restricted funds and circle back to the donor to see if they will consider releasing their restrictions to support general operating needs. (Be sure to retain documentation supporting these decisions)
• If you have had to cancel an upcoming fundraising event or ticket performance ask the donors or patrons to forego a refund and instead transfer the ticket cost to a contribution - thus allowing the organization to continue paying employees, and in some case allowing important community programming to continue.
• Reach out to your lenders and verify the status of your line of credit and borrowing limits.
• Consider borrowing from an endowment corpus.

We are here for you and we will get through this together.