The year is off to a stormy start, at least here in the United States. The omicron surge looms over the entire country, and as cases rise, entire sectors of the economy are affected – client-facing organizations are juggling staffing shortages as positive cases keep employees home. In the background, the global supply chains have still not stabilized, and inflation continues to push prices. Below are our predictions for 2022 and tips for the mitigating the risks.
- The country will shift towards living with the coronavirus rather than trying to contain it. Omicron is the latest variant to besiege the world – however, with reduced severity, there has been increased transmissibility. But most importantly, omnicron is going to force us to move beyond the containment strategies we have been using. Omnicron will not be the last – another variant will follow, and we will need to learn to live with the virus going forward. With vaccines and other mitigation measures available, we will begin the shift back to normalcy.
- Product availability will continue to be hit or miss. The good news is that some bottlenecks have eased, but for the most part, the larger global supply chain issues have not been resolved. The logistical challenges (jams at the ports and trucking driver shortages) will improve over the year, but they will not resolve quickly. Expect to continue to monitor availability and prices throughout 2022.
- Inflation will continue strong in the first part of the year. There is a general consensus that inflation will not abate quickly. The Fed has signaled that they will be increasing interest rates in March to combat inflation, but the underlying issues contributing to inflation will take longer to fix. One of our suppliers told us that all their manufacturers increased prices in the last few months, and they expect additional increases in the near future. There also continues to be uncertainty about the situation in China, with the virus taking hold there.
Undoubtedly, 2022 will hit the low inome groups the hardest. Nonprofits will need to push the envelope to stretch tight budgets while trying to serve populations that are struggling to stay above water. Although we will face significant challenges, there are steps we can take to mitigate the risks::
- Increase your grant requests to account for the increased prices. No one knows how much inflation will occur – it’s anyone’s guess what will happen oiver the next few months. However, requesting an additional 10-25% above your target amount will go a long way towards hedging against the price increases. Grantors are aware of the increased costs running an organization and of goods specifically – they should not be surprised to see increaseds.
- Purchase early. If you have funds available, lock in your prices by purchasing early – even if you don’t need them immediately. Many vendors will even hold supplies if you pay a deposit. This will help you acquire the goods even if you do not have adequate storage space – the vendor will have the goods delivered closer to your distribution event.
- Be prepared to make tradeoffs. With increased costs, if your budget remains the same, you will need to make some tough choices – either reducing the number of people you help, reducing the distribution amount, or prioritizing certain projects over others. Understanding which tradeoffs are most important will help you make the final purchasing decisions when it’s time to makle the tough decisions.
- Leverage flexible approaches to your fundraising and volunteer events. Because the coronavirus situation continues to be unpredictable, while we believe the country will shift back towards “normalcy,” your donors and volunteers may not yet be ready. Therefore it will be important to continue to provide different options for participation – leveraing online and offline options, and providing opportunities that are not solely in-person.
- Start early. The reality is that people are mentally tired after 2 years of dealing with the pandemic, and donors are also concerned about how the rising costs are affecting their pocketbooks. It may take longer and require more outreach to hit your targets this year. Starting early will provide you with more time to engage busy, frazzled donors and also recruit new corporate supporters and service groups from your community.
Through proactive planning and careful considerations, organizations will still have a significant impact helping those in need. Need help navigating the challenges in 2022? Feel free to reach out to us at email@example.com with any thoughts or questions. Here’s to a successful 2022!