The Need for Financial Crisis Simulations

Ari Betof
Ari Betof

A consultant to senior leaders at nonprofit organizations, Dr. Ari Betof is the president of Organizational Sustainability Consulting, LLC. In an article on his Medium website titled “Fiscal Fire Bubbles – The Case For Financial Crisis Simulation,” Dr. Ari Betof states that while active-shooter exercises have sadly become routine in workplaces and schools, a mass shooting is less likely to happen than a financial crisis.

However, many organizations are not prepared for the possibility of a financial crisis. For instance, nonprofits should consider what would happen if changes in tax laws led to a major decrease in annual giving or if grant funding suddenly disappeared.

Organizations should consider creating a tangible plan to help them weather a potential financial crisis. Specifically, they can develop financial crisis simulations, which would consist of senior leaders, the board, and the finance committee. In addition, an outside consultant can be brought in who is knowledgeable about the organization’s financial state. The consultant can map out possible scenarios and build accountability on the team.

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