Is Forced Closure Halting your Nonprofit Childcare Program’s Cash Flow?

Coronavirus causing childcare center closures graphic

When you were setting up your budget for this year, you couldn’t possibly have planned for this.

As is the norm for creating a nonprofit organization budget, you carefully weighed your expenses and potential income until they were balanced to perfection. The line earmarked for Contingency, like most years, was likely set fairly low, maybe just enough for a hot-water heater emergency or an unanticipated technology need.

And now this.

Don't communicate "nothing" to parents

While some nonprofit childcare centers have some ready cash in their reserve funds, many depend on regular tuition payments to keep that budget from teetering into the red. While some centers can weather an extended forced closure, most can’t.

And the longer the Coronavirus (COVID-19) quarantine, the more challenging it will be for centers to reopen.

How do you plan to reopen your doors and save your busted budget without the income you expected to generate?

Maximize Your Financial Runway

The best strategy to survive a crisis like this is to maximize your financial runway. What does that mean? Seeking out loans, reducing expenses, and keeping as many dollars coming in the door as possible.

To maintain a steady flow of income, some childcare programs have elected to continue to charge parents tuition despite being forced to discontinue providing services. This is not something we recommend, as it will almost certainly lead to parent dissatisfaction, enrollment loss, and potentially bad publicity for your center.

But you’re a nonprofit, and that gives you an option that for-profit centers don’t have available to them – donations generated through fundraising campaigns.

Fundraising Tips for Your Nonprofit Childcare Program

Voluntary Donation in Lieu of Childcare Tuition

As a nonprofit childcare program, one of your best options is to ask families to repurpose their normal tuition payments as donations.

For parents equipped to work from home, a monetary donation or fundraising drive might be just what they need to get involved and stay connected.

Some parents are fully equipped to work remotely, and they are doing just that with no disruption to their income. The cash they normally pay to you in the form of childcare tuition is available to donate. You just have to know how to ask for it.

One benefit you may want to highlight when soliciting donations from parents is the possibility of tax deduction. More importantly, you can let them know that their generosity can help ensure you’re able to retain your staff and reopen once the quarantine is lifted.

Favorite teachers everywhere are wondering what their futures hold. Reassure them with a paycheck.

A simple way to incentivize parents to donate is to provide a percent-based reduction of a future tuition payment once we emerge from quarantine and things get back to normal. Only you know what your center can afford with regard to any credits you issue.

Pro Tip: Family support is likely to increase substantially if the center commits that 100% of funds raised will be going to the center staff. Remember, parents see your staff members at part of their family.

Not great at asking for donations? Try something like this. Feel free to copy, paste, and edit the template below for your specific needs:

Subject: Please help ORG NAME

Dear ORG NAME families,

I hope this message is finding you and your family safe and healthy during this difficult time.

As you know, ORG NAME is a nonprofit center dedicated to the care and education of your children. As a nonprofit, our budget is tight in the best of times, and the current public health crisis will have a severe impact on our business and our staff.

Our staff is our greatest asset, the backbone of our center. Now, due to circumstances beyond anyone’s control, they are out of work, and many are struggling to make ends meet.

How you can help

We are currently asking for donations in lieu of the tuition you would normally be paying right now from our wonderful families who are able to afford it.

100% of your donation will be used to pay our teachers during this forced closure. Your donation is tax deductible, so we are happy to provide you with a receipt to include with your next tax return.

How to donate

Donate through our online donation form (insert the link), or contact me at PHONE or EMAIL, and I will work with you to set up your donation!

Thank you in advance for your incredible generosity.

YOUR NAME

Pro Tip: If you’re using EZCare or EZ-CARE2, you can email all of your families at once using the EZViewer. EZCare also makes it easy to track and maintain tuition credits, and our support team is standing by to help you through it.

Host an Online Fundraising Auction

Fundraising auctions can be both lucrative and fun, and inspiring a bidding war might provide just the right amount of entertainment for parents and friends who are looking for some distraction from cleaning out closets and refereeing arguments between kids stuck at home.

Teachers will gladly donate future services, like this one-on-one art lesson, if it means they can keep their paychecks now.

The biggest challenge here is coming up with ideas for auction items. Retail stores are closed, restaurants are experiencing tremendous losses, theaters, museums, and other public attractions are shuttered, so what options are left?

Now’s the time to get creative with no-cost and low-cost ideas like this:

  • Free tutoring sessions
  • Admit one to summer camp
  • Art supply kit
  • Lunch with a teacher

Do you know anyone with a great beach condo, mountain cabin, or lake house they would donate for a weekend away? Can your facility’s landscaper spare a half-day this spring for some cleanup services? Now’s the time to call in every favor you’re owed.

Some auction software providers can also connect you with risk-free large ticket items. If you already use one, like ReadySetAuction, this may be an option for you.

Try Crowdfunding to Expand Your Fundraising Reach

We’ve all seen the social media posts from teachers soliciting donations for special projects, books they want to augment their classroom library, and field trips they can’t get funded through their school budget. That type of project-based fundraising is very effective for getting the money they need to provide the best classroom environment and experience.

Let’s put that type of fundraising to work for your program now.

Online fundraising through crowdfunding and social media just might be the key to getting out of this mess.

Crowdfunding is similar to that, but it utilizes a network of families, friends, and connections who are all fundraising for the same cause using their own contacts. They do this using a simple online form and the most powerful free tool available – social media.

My iPhone told me my screen time increased last week by an embarrassing amount. I can attribute this largely to the amount of time I spend scrolling through social media for ideas to fight boredom while in quarantine.

Now’s your opportunity to promote your online fundraising initiative, because I bet I am not the only one checking my Facebook, Twitter and Instagram accounts more often than I normally would.

Learn more about Crowdfunding.

Fundraising during the current COVID-19 crisis won’t be easy, but it may become necessary for some. Get ahead of the game by planning and implementing some of your fundraising strategies now before your childcare, preschool or school-age program budget is past the point of no return.

Not into fundraising right now? There are other ways to keep tuition income coming in that might be worth a look.

Written by: Wendy Young on Mar 27 20

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