This article is brought to you by The Third Bank, translated and edited from the platform Nonprofit Financial Commons, which is a leading knowledge platform established in partnership between Nonprofit Quarterly and Propel Nonprofits and BDO. It features a global community of more than 10,000 financial leaders in the nonprofit sector, sharing experiences and tools to enhance strategic financial practice. This site is one of the most important references in global nonprofit finance, and the content of the article at hand represents the first installment of the "2025 Guidance Series," providing practical tools to deal with periods of uncertainty.

Although the background of the original article pertains to the American context (including executive orders and the sudden freeze of some federal grants), the financial and administrative steps outlined are applicable and adaptable to the reality of nonprofit organizations in Saudi Arabia. With Vision 2030 and diverse sources of funding, including government grants, endowments, corporate social responsibility, and individual support, there is a growing need for tools that enhance financial readiness and increase organizations' ability to face any disruption in resource flow.

Why These Steps Now?

The year 2025 globally began with a wave of sudden changes that put many nonprofit organizations in the face of unexpected financial challenges. While we do not confront the same political or regulatory context in the Kingdom, the principle remains the same: funding may be delayed, grants may be reduced, and contracts may be canceled. This highlights the necessity for a clear, practical plan to address financial fragility and ensure that the organization remains capable of fulfilling its mission.

Therefore, the article presents a list of 12 urgent steps, divided into two phases:

  1. Enhance access to unrestricted cash and liquidity.
  2. Activate networks and advocacy to protect the organization and community.

The Twelve Steps

1. Monitor cash flow and liquidity

Fragility first shows in cash flow. Ask yourself: how long can the organization continue to operate if resources suddenly stop?

To calculate reserves:

(Net unrestricted assets - fixed assets) ÷ monthly expenditures

(Net unrestricted assets - fixed assets) ÷ monthly expenditures

This metric is known as LUNA (Liquid Unrestricted Net Assets). The higher the number, the greater your flexibility and ability to make strategic decisions.

2. Manage payments cautiously

Identify expenses that can be postponed (such as capital expenses). But never neglect to pay payroll and official taxes. Utilize the full duration allowed for payment to relieve liquidity pressure.

3. Inventory and review contracts

Conduct a comprehensive inventory of contracts: funding, services, partnerships. Identify renewal dates, cancellation terms, and opportunities for renegotiation. This allows you to know when risks increase and where opportunities exist to reduce costs.

4. Realistic cash forecasts

Don't rely on optimism. If payments are delayed, expect that they may increase. Regularly prepare updated cash flow scenarios, and share them with your team and board, so everyone is aware of the actual situation.

5. Address external barriers to cash

Review your relationships with banks and lines of credit. Leverage relationships of board members to support negotiations with banks. Participate in advocacy or lobbying coalitions to address payment delay issues.

6. Address internal barriers to cash

Check restrictions imposed by the board on using reserves or certain types of endowments. Initiate early discussions regarding the possibility of using these resources to cover liquidity or operational expenses when needed.

7. Measure risks in revenue mix

Assess your income sources: how much comes from government grants? How much from individuals? How much from grant-making institutions? Then evaluate the concentration of reliance within each source. If 95% of institutional donations come from one funder, you are in a vulnerable position.

8. Renew local and field networks

Stay close to information sources. Local funding may be affected by centralized decisions or economic changes, and individual donations or program revenues may decline. Connect with sister organizations and field networks to be the first to know about developments.

9. Pressure funders for increased flexibility

Ask funders to:

  • Lift restrictions on existing grants.
  • Increase funding rates as needed.
  • Consider using their endowment assets to support you.

  • Provide short-term loans if the cash flow problem is not in revenue.

    In Saudi Arabia, partnerships in social responsibility or agreements with local endowments and grant-making institutions can be utilized to activate this flexibility.

10. Communicate, then communicate, then communicate

In times of crisis, transparency builds trust. Do not make promises you cannot keep. Share what you know, acknowledge what you do not know, and provide regular updates—even if there is nothing new. Make communication an expected routine that alleviates anxiety and strengthens credibility.

11. Build social capital

Social capital lies in your staff, board, volunteers, and community. Empower them to spread your message. Encourage them to talk to their neighbors, funders, and stakeholders to amplify your organization's voice.

Ask yourself: if our organization stopped today, who would be affected? And why? This question is not hypothetical; it is a tool to highlight impact and enhance advocacy.

12. Support other organizations

You are not alone. Collaboration among organizations is part of protecting the community. Understand the needs of other organizations and share solutions. This spirit of cooperation enhances the identity of the entire sector and reduces risks for the most vulnerable groups.

Toward Financial Readiness in Saudi Arabia

The original article published in Nonprofit Financial Commons reflects global expertise in nonprofit finance. However, the real value lies in localizing it within our Saudi context.

Today, nonprofit organizations in the Kingdom are called to seriously adopt these steps: from calculating LUNA, to contract flexibility, to renewing networks, to building social capital. In the context of Vision 2030 and competition for resources, financial fragility is not a fate, but a condition that can be addressed with clear plans and leadership awareness.