Financial crisis affects non-profit organizations and funders in many ways. It makes it hard and more expensive to access credit. It also increases the demand for basic necessities and essential human services. The financial crisis also brings about downward pressure on the government and philanthropic revenue sources. It also takes non-profit organizations long to recover from a financial crisis. This is due to the state budget timing and depressive giving rates.
Collaboration is one way in which non-profit organizations can deal with a financial crisis. Non-profit organizations should enter into mergers and alliances with other organizations so as to fulfill a mutual mission. Collaboration should range from planning and analysis to implementation and forecasting. This makes it easy for a non-profit organization to cope during a financial crisis.
During financial distress, the leaders of a non-profit organization should start viewing it as a business. They should do this when a financial crisis is forecasted. This ensures that there are good financial reporting and measures of success (Landskroner, 2002).
Therefore, non-profit organizations should take appropriate measures prior to a financial crisis. Good preparation ensures that non-profit organizations do not get affected badly by a financial crisis. It is also important for non-profit organizations to collaborate with other organizations so as to reduce the effects brought about by a financial crisis.