December 18, 2020   //   Not-For-Profit   //   By PKF Mueller Solutions


Is your organization prepared for a crisis that could threaten its survival?

It could be anything from a devastating economic downturn, to a domestic abuse or sexual harassment scandal involving a high-ranking official, to a natural disaster that destroys your main offices. Regardless of the nature and extent of the crisis, prompt action is required.

First things first: Don’t panic.

Second, this is the time for not-for-profit management, including the board of directors, to step up and provide leadership. The top rung must exhibit the qualities and take the actions needed to sustain the organization.

Qualities Needed

The qualities that can stand not-for-profit leaders in good stead in a crisis include:

  • Expediency. Crisis management usually calls for fast action and that is often tricky in the not-for-profit sector. Frequently, board members reside in far-flung locations or, at the very least, in different time zones. And many hold full-time positions that might prevent their instant participation. That can make it difficult to obtain a quick consensus. If procedures have been established for taking decisive action, however, this negative can be turned into a positive.
  • Transparency. Public confidence will be eroded if, for example, it comes out that the board is covering up for a member or hiding other important information. Typically, a knee-jerk reaction by a board is to keep the public in the dark when it responds to certain types of crises. Avoid this response; being transparent creates more trust in the end.
  • Humility. When negative developments occur, the initial inclination is to go into defensive mode or deny any wrongdoing. But a good dose of humility can go further in restoring the public’s confidence than sticking to your guns in the face of mounting evidence. People can understand and forgive.
  • Accountability. Along the same lines, not-for-profit leaders should be accountable for mistakes that lead to or cause a crisis. Don’t play the “blame game,” especially if you’re not standing on firm ground. For example, if a not-for-profit is unable to pay its bills due to ineffective or incompetent leadership or a high-ranking official commits financial fraud, the organization should admit to the transgression. Furthermore, the board functions as a team, so all the blame shouldn’t be laid at the feet of a single member.
  • Compassion. Not-for-profit leaders may be inclined to hide behind a stone-face veneer when wrongdoing surfaces. But failing to show compassion can damage the group’s reputation. When circumstances are spinning out of control, find room for commiseration.
  • Analysis. Not only are board members trained for crisis management, they should learn from past mistakes. This may require an in-depth analysis by an outside source — perhaps a paid consultant — without any preconceived notions. In other words, don’t simply focus on what went wrong — also address why it went wrong.
Take Action

When there’s no turning back from a crisis, these six steps might keep the nonprofit in the driver’s seat and help stem the tide of confusion or reproach:

1. Inform and update the board. Regardless of where board members are located, they should quickly be brought into the loop. Hopefully your group has set up procedures for crisis management, so follow them expeditiously. After things have simmered down, review the events to see how practices can be changed for the future.

2. Deliver the message. One of the key components in crisis management is how and when the not-for-profit communicates with the media. Everyone should be on the same page as to who will speak for the organization. Usually, this job is best assigned to one person, such as the president. Having other voices can complicate matters. Similarly, one person should handle social media.

3. Communicate with stakeholders. The main stakeholders in the organization — including employees, large donors and board members — must be apprised of the situation. Again, rely on the procedures in place for contacting these people. When warranted, you might enlist a communication consultant to provide extra direction.

4. Create a crisis committee. Once the initial shock is over, selecting a team and assigning primary duties will help your not-for-profit move ahead. This stand-alone committee will be authorized to act independently, but keep the board up-to-date on what’s being done.

5. Obtain legal advice. If your procedures have been reviewed and approved by legal counsel, you can spring into action without hesitation. But it can’t hurt to run things by your attorneys before any drastic steps are taken or the situation appears to fall between the cracks. Caveat: While attorneys speak to the organization, they should not be the sole voice speaking for the organization on public platforms.

6. Meet objectives. Finally, determine what the not-for-profit hopes to accomplish in the aftermath of the event. Although this may vary, depending on the type of crisis, here are some common goals:

  • Resolve the problem. Address the issues confronting the organization.
  • Focus on facts; don’t speculate. Base actions on what you know to be true.
  • Communicate concern. As discussed above, showing compassion and humility when called for is important.
  • Reassure the public. Remind stakeholders and the community that your mission is intact and you remain dedicated to following it through.

Practical advice: Be prepared for worst-case scenarios. In some cases, if you are aware, you can avoid trouble before it happens. In any event, if a crisis arises, act assertively and promptly.

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