By Brian C. Wilson
The temptation to panic during a crisis looms over leaders at nonprofits immediately affected by the COVID-19 pandemic. However, advisers to groups relying on walk-in traffic, guest fees, and gift shop sales are taking the long view since the situation remains unclear, despite many cities and towns now telling residents to quarantine in place.
In an ideal world, museums, nonprofit theaters, and organizations with public classes and programs have a three- to six- month reserve of funds to cover catastrophes such as COVID-19. A few are lucky enough to have endowments that shield them from a year or more of financial distress. Yet, tens of thousands of nonprofits across the country operate on shoestrings and have few or no cash reserves.
Even the YMCA of Metropolitan Los Angeles, which has shuttered programming, swimming pools, and gyms at its 26 facilities, is unsure about the immediate future.
Debashis Chowdhury is president of Canterbury Consulting in Newport Beach, California. The firm works with YMCA of Metropolitan Los Angeles' investment committee and advises the endowment's managers. "The coronavirus has unknown ramifications for the global economy, at least in the short run, and has rattled the equity market," he said. "We are not recommending any changes to long-term portfolios since a long-term asset allocation is constructed to get through periods like this. No doubt, it is challenging to stay the course in an environment such as this."