How quickly can a not for profit go under?
I work for a 300 person not for profit (501c-6). We have been running in the red the last 3 years but this year are on target to be tens of millions in the red. We have some funds in reserve but I am not clear if they can be used for operating expenses or if they have to be used for mission activities. I am looking for a new job but it's not a great time of year in addition to the pandemic.
My retirement is partially through a pension and partially in a 401K (they switched 2 years after I was hired). I am vested in both plans.
One of my coworkers thinks we could be clearing out our desks by March, he is convinced it could go down quickly, like we saw on Wall Street in 2008 when established companies just evaporated over night, I don't know if as a non profit we can be shut down that quickly, there are boards and tax ramifications etc.
Thoughts? What should I be looking for to know it's coming? We are all remote right now so I don't even know if we would be allowed to collect our stuff, I have some certificates, diploma's and personal artwork I want back.
I wanted to update that we had a 15% staff reduction in February, it has not stopped the bleeding, we were millions in the red at the end of the year which is why they said they had to do this layoff. I suspect we will start to have quarterly lay offs, I have been trying to find new work and banking every penny I have in preparation.
Tens of millions? That’s not good especially with a payroll of only 300 people. Where is all the money going? Is the company doing an annual audit with a reputable company? Definitely update your resume and start networking.
It comes down to terrible management. They have been been trying to develop new revenue streams for years but lack the leadership to make decisions. They hire consultants for millions and millions to tell us what to do then when the report comes back, they put it on a shelf, pay the million dollar invoice and then hire a consultant to look at the issue again. We are supposed to be self sustaining, we have brand recognition and good products that people will pay for, but it's not enough to keep spending the way we are. We have never had a staff reduction, we hire a temp or contractor when our existing staff do not have the skills to do new things and still keep the old staff employed. About half our staff would likely be culled if we approached things like a normal company. Example, we have administrative assistants who are older and don't know how to use the computer well, even Excel is beyond them. We keep them on payroll and give them a cost of living raise every year.
Since it's a non-profit, I'm assuming there is a board of directors that the President has to report to. Does the finance director or VP of finance make reports to the BOD? I'm surprised someone from the BOD hasn't come in and fired the president and c-suite.
The executives have done a masterful job of keeping the stark reality of the situation from the board. Full disclosure, the board is made up of members and they don't necessarily have business experience or an understanding of the financial issues. Most of our members are focused on legislative and marketing efforts for our mission.
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Hi, I recommend being on the hunt for a new role if your instincts tell you trouble might be coming within your current role. I recommend updating your resume tailored to the industry / position you're interested in. It may be better to have an option or a Plan B ready if something does come up.
If you do find a role you're interested and and you do get offered it, it may also be a great opportunity that came up that you weren't expecting.
Summed up :) I do recommend actively viewing new roles.
Yes, about a year ago when things started looking bad I hired a resume writer and got cracking on finding something new. Sadly, no offers to date, interviews are hard to come by in the roles I am looking for. The pandemic has reduced the need for people in my type of role.