The Women’s Center for Advancement (WCA) is concerned with domestic violence, sexual assault, stalking, and human trafficking nonprofit located in Omaha, Nebraska (WCA, 2020). Like other nonprofit organizations, the COVID-19 pandemic has adversely affected WCA’s business cycles on revenues and expenses. WCA should deal with mismatches between revenues and expenses by reducing spending or delaying investments. NGOs invest in impact investments of initiatives that benefit society and in return, provide financial returns (IFC, 2020). NGOs have the infrastructure and expertise that attract Investors looking to make positive social or environmental impacts in society. Delayed investments imply that WCA will reduce its spending on the impact projects.
WCA should reduce spending because it is the best alternative to deal with the mismatch between revenues and expenses. The other available options include increasing revenues, using temporary revenue sources, or depending on reserves. The pandemic has adversely affected all economic sectors and households, making it difficult for WCA to increase its revenue by speeding up collections or holding fundraising events (Hutt, 2020). These damaging effects have also discouraged lenders from issuing money and individuals have little disposable income to purchase assets. Moreover, the NGO should not depend on its accumulated reserves. COVID-19 has created much uncertainty because health experts are not sure when it will end, and its economic impacts may persist in the near future (Hutt, 2020).
Reduced spending will enable WCA to save more funds to sustain its daily operations while waiting for the pandemic to end and the economic activities to return to normal. The benefits associated with delayed investments far much outweigh the costs associated with investing in an uncertain market. The losses may be substantial and adversely affect the organization’s future operations.
Hutt, R. (2020). The economic effects of COVID-19 around the world. World Economic Forum. Retrieved from https://www.weforum.org/agenda/2020/02/coronavirus-economic-effects-global-economy-trade-travel/
International Finance Corporation, IFC. (2020). Creating Impact—The Promise of Impact Investing. International Finance Corporation. Retrieved from https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publications_listing_page/promise-of-impact-investing
WCA. (2020). What We do. Retrieved from http://wcaomaha.org/