The FAMCare Blog

Crisis Management For Nonprofits

Posted by GVT Admin on Jun 3, 2020 12:00:00 AM

New Reality for nonprofits As the corona virus pandemic descended over the world, everything changed for nonprofits. Suddenly many of the smaller organizations are fighting for survival. We contacted a retired professor from the Harvard Business School who has spent a lifetime researching nonprofit management to ask for his suggestions on nonprofit crisis management.

Interview With HBS

GVT: Thanks for taking our call, professor. I’m sure you must be busy fielding questions from nonprofits across the country. For many years you have been preaching that nonprofits, even more than for-profit organizations, must sync their strategic plan with their mission statement. Has anything changed with this pandemic induced economic crisis?

HBS: Nonprofit management must recognize immediately that this is no longer “business as usual”. We have stumbled into an economic crisis. A paradigm shift has occurred without asking our permission. Nonprofit managers must make an immediate mental shift from the long-term strategic thinking I have always advocated to short-term survival tactics. Their principal challenge is to keep their organizations alive and functioning.

GVT: What do you suggest nonprofit management do differently?

HBS: I suggest replacing the mission statement inspired strategic plan with a one-year action plan. Start by asking major donors what funding will look like for the next year in a recessionary environment. Don’t solicit funds but share information without judgment. Nothing is either good or bad news; rather the information is valuable if it is truthful and accurate. In other words, try to gather accurate funding information quickly.

GVT: Assuming funding will shrink for most nonprofits during the rest of 2020 at least, should management just cancel projects and lay off the staff?

HBS: No, not necessarily. Nonprofit management should, however, immediately set about crafting an effective one-year action plan in keeping with the best funding projections they can put together quickly. Remaining in denial or thinking they can change the narrative could be deadly. Collecting the most accurate funding information at the outset and then taking survival actions over subsequent months is the only effective response. Even though the information is sudden and unpleasant, it must be faced immediately, and an appropriate response must be fashioned in order to save many of the smaller nonprofit organizations. This is no time for “hope” or “wishful” thinking.

GVT: Can you offer any thoughts about what that “action plan” might look like?

HBS: A nonprofit one-year action plan might begin with canceling all new initiatives. Then, management should identify nonessential programs and programs that are not a priority and suspend those activities. Certainly, it would not be an overreaction to enact a hiring freeze and allow attrition to take place naturally. If further payroll trimming is indicated, utilize furloughs so employees will qualify for government assistance and be available to return to work as soon as the crisis abates.

GVT: Should nonprofits stop all fundraising efforts?

HBS: I suggest that nonprofits remain in constant communication with their donor base. Seek their advice and council, not just their money, but stay in constant touch. Nonprofits might be faced with a funding hiatus, but they should spare no effort to have their mission front and center in donors’ minds so that when things do return to even a “new normal” their mission will not have been forgotten. One of the most important components of a one-year survival plan is to become better at communicating with grant makers, major donors, government officials, board members, paid staff, volunteers, and clients. In other words, see this period as an opportunity to improve communication with all stakeholders.

GVT: How about day-to-day operations? Any suggestions on how to operate during a pandemic shut down?

HBS: Well, it’s obvious that nonprofit management has to learn how to operate with most of the staff working remotely. But I’d like to remind management not to take their own welfare and the welfare of their staff for granted. People are not used to working from home and know little about psychological and physical fitness under unfamiliar circumstances. Nonprofit management should include fitness research and counseling in their one-year survival plan.

GVT: Thank you for your thoughts, professor. I will pass them on to our readers right away.

Topics: nonprofit mission, nonprofit sustainability, nonprofit funding, Covid-19/Pandemic

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