December 2, 2020

Leading in Turbulent Times | Step 3 of 5: Elevate Continuously

By committing to using hard data, you’re harnessing one of the most powerful strategies for successfully navigating rough waters. There are five key metrics in particular that you’ll want at your disposal. Let’s take a closer look at each.

Metric 1: Operating Cash on Hand

The first metric — and probably the most important — is your operating cash on hand. By definition, operating cash on hand represents the number of days that your nonprofit can continue paying its operating expenses with the amount of cash currently available. Having enough of it will allow you to function with minimal disruption.

Metric 2: Monthly Revenue

The second metric you’ll need at your disposal is the amount you receive in monthly revenue and donations.

Specifically, projected revenue refers to the estimated amount of money your organization will generate during a specific period of time — monthly in this case.

While some will say that, during times of crisis, it’s difficult to estimate what their organization’s monthly revenue and donations will be, this need not be the case. Perhaps the best way you can project your potential monthly revenue is to review your nonprofit’s donations for the same period last year and then use that number to estimate what might reasonably be expected this year.

There could, of course, still be a significant gap between the revenues you need and what you can realistically expect to bring in.

Metric 3: Monthly Operating Expenses

A third metric you’ll need to have at your disposal is your monthly operating expenses.

Operating expenses are costs that occur in your normal day-to-day operation. Examples of operating expenses include: payroll, insurance, rent, utilities, internet, and phone bills. Other examples of operating expenses include the bills incurred when you host fundraisers, galas, and other events.

Because operating expenses take away from the amount of cash your organization has in its possession, you’d be wise to keep an eye on this number to gain insight into the expenses that can potentially be delayed or eliminated to improve cash flow.

Metric 4: Your Constituents’ Needs

The fourth metric you’ll want to track is related to the needs of the population(s) you serve. Ask any charity leader, and they’ll tell you that just responding to the internal issues created by the COVID-19 pandemic became a full-time job in and of itself.

Even with these additional responsibilities and priorities, though, it’s essential to make sure you’re respecting your obligations to those you serve. We suggest carefully examining all the support, supplies, and assistance your constituents are going to need from you over the course of the next six months. It’s essential that you begin mapping out the resources it’s going to take to get the job done and essential that you do it now.

Metric 5: Your Team’s Safety, Well-Being, and Engagement

Last but definitely not least, the most important metric you’ll need is an evaluation of your people’s safety, wellbeing, and engagement.

During a crisis, the primary goal of any great nonprofit leader should be to ensure that every effort is being made to protect their team from obvious workplace hazards. A great step in this direction is to create and monitor a health-and-safety checklist for all the specific tasks that need to be accomplished.

You’ll also want to turn your attention to monitoring personnel-engagement levels, a particularly important metric at a time when so many people are working remotely.

Failing to pay adequate attention to any of these metrics can result in a variety of negative consequences for your organization, including poor work quality, missed deadlines, low morale, turnover, and health concerns.

Armed with these five metrics, you’ll be able to quickly make any necessary adjustments because you’ll know exactly what’s going on in the different parts of your organization. As a result of using this data, not only will you make better decisions, you’ll also experience less anxiety in the process.

Key Metrics

• Operating cash on hand

• Monthly revenue and donations

• Monthly operating expenses

• Your clients’ needs

• Your team’s safety, well-being, and engagement