Cost structure and resilience

Several aspects of a nonprofit organization's cost structure can influence its resilience in a crisis. Significant fixed costs can result in unpaid bills when revenue streams tied to output are constricted. And constrictions on investment in administrative and fundraising infrastructure can make organizations fragile in normal times and lacking the capacity to raise sufficient funds or address other operational needs in an emergency situation. Additionally, nonprofits can examine their potentials to exploit economies of scale and scope in the services they provide, and the manner in which they account for joint costs of providing multiple services. These concerns call for examining the balance between fixed and variable costs, and investment in administrative and fundraising capacity, as elements of a robust resilience management and planning strategy.