By Burton Li, CEO, Sutro Li

In times of political or economic instability, nonprofits need strong financial strategies more than ever. Dive into these five critical actions to strengthen your organization's financial resilience and maintain your impact when cash flow challenges threaten.

1)  Assess the timeline: Short-term crunch or long-term challenge?

Analyze your nonprofit's financial trends to determine the nature of your cash flow situation.

• For short term issues, a line of credit can be a good solution. Look for a local bank with a Community Development Financial Institution (CDFI) relationship. Note: It can be difficult to find banks that offer lines of credit to nonprofits.
• For long-term impacts on cash flow, consider the strategies below.

2) Frame your approach: Housekeeping or Strategic Moves?

Differentiate between routine financial management and transformative fiscal strategies for your nonprofit.

Housekeeping - are there any areas where you could cut costs that wouldn't really have a major impact?

• Are there software subscriptions that aren't being used, or consultants who are a nice to have but non-essential part of the project?
• Can you renegotiate any contracts with vendors or service providers for better rates or terms?
• The housekeeping investigation starts with a close look at budget variances and the details of your expenses.

Strategic considerations almost always get into staffing, which is usually the largest expense.  And where I would always recommend starting is an evaluation of the financials of each program.

• Which programs have the most mission critical impact on fulfilling your mission?
• Which programs have the most restricted funding?