The global health and economic crisis is walloping nonprofits. Some will have to close or merge, some will have to shift their focus, and some will lay off staff in the weeks and months to come. How should nonprofit trustees respond?
In most cases, the answer will be to become more involved than they might otherwise: Their organizations’ leaders (and sometimes staff) will need their guidance, their expertise, even their connections now more than ever. In other cases — particularly if the coming recession means they can no longer contribute at the same level — they might need to step back.
In the near term, as the situation changes by the day and the hour, the board chair and the executive director should stay in close contact. We recommend frequent reports to the board by email, phone, or videoconference, stepped-up meetings of the executive and finance committees, and frequent updates as events and programs are canceled or postponed.
Steady leadership from the board chair and the executive director will give staff, board members, clients, and donors needed stability.
Leaders of direct-service organizations are under extreme pressure to help their employees and communities right now. Trustees should let their executive directors know that they stand behind them, even as the boards make tough decisions. Many nonprofit leaders started their careers after the 2008 downturn or might not know how to make budget projections amid the current chaos; this is a time for the board treasurer and others with these skills to show support and patience, and to administer tough love, if necessary.
Get Plan B ready.
Early on — right away — the board should work with the executive director on a Plan B. If a spring fundraising event has been canceled, in-person community outreach shut down, or new hires or projects in limbo, how does that affect the budget and programs in three and six months? A year? And how does the organization come back?
Plan B should think the unthinkable. It should include considerations such as:
- What efforts to end if it is impossible to conduct any public gatherings by, say, the summer or fall.
- How much revenue the organization can lose before it furloughs employees, and who should be the first to go.
- Which organizations are good matches for a potential merger.
- How to use a reserve fund to provide for employee severance or emergency services to clients.
- How to shift to volunteer staffing.
Even if a nonprofit isn’t ready yet to fully flesh out Plan B, it is important to get the conversation started. Small steps now, involving the board as well as partner organizations and seasoned nonprofit professionals, can help an organization stay afloat and provide a vital sense of movement for the staff and the board. Board members with legal training can advise on the opportunities and liabilities provided by loans or grants approved in federal stimulus measures.
Figure out what donors will do.
Meanwhile, individual donors — some nervously watching their investment portfolios bounce up and down — are reassessing how much they can give, and to whom, even as the pandemic creates gaping needs in every direction. Likewise, foundations and other institutional donors may be reducing or refocusing funding. We won’t know for a while about the recession’s impact on federal grants and programs, but regardless, every organization needs a detailed timeline and blueprint for action to ensure that the return to whatever regular programming looks like after this crisis is thoughtful, planned for, and supported by adequate funding.
Board members need to assess their own situations. Will the financial downturn force them to cut, or even skip, their annual donations? If so, they must level with their organization so the executive director can adjust expectations and revenue projections accordingly. This new calculus, in turn, may force some reappraisal of the “give or get” financial-donation requirement of most boards: Should the minimum be relaxed or forgiven for the current year? Do trustees self-report? Is there accountability? And as new board members come through the pipeline, being clear with them about the importance of their fiduciary role is critical to ensuring the organization’s long-term well-being.
A crisis can present opportunities, such as a merger or partnership, or a chance to take advantage of low interest rates on a loan for a capital project. Board members, in touch with community leadership and their counterparts in other organizations, can be on the lookout for those opportunities.
Help laid-off employees find new roles.
In organizations that must cut staff, board members can provide mentoring and guidance for those laid off in a tightened job market. For some staff, board members may have been primary partners in their programs or responsibilities. Recommendations, input on résumés, and introductions in the community are important ways trustees can maintain an ambassadorial role for the organization and a relationship with people they care about.
Finally, a note of respect and affection for all of us who work, for pay or as contributing board members, in nonprofits: These are difficult times for everyone, as we worry for ourselves and loved ones, as well as for our communities and our country.
Focus on the future.
The difficult conversations we will have with our fellow board members or with staff in the coming weeks should acknowledge everyone’s contributions and potential.. With one another, with executive directors and staff, with donors and grant makers, let’s work to be honest and kind. This too shall pass, and the work of nonprofits is needed more than ever. Let’s step up.