Serving the underserved, protecting nature and improving children’s health and quality of life are a few of the critical contributions made by nonprofit organizations in large and small communities. While enjoying broad public support for their mission-driven work, nonprofits can quickly fall under public scrutiny and criticism in a crisis that can threaten even those with a powerful reputation. A crisis threatens trust.
When embroiled in a crisis, it’s not only the organization’s executive leadership that’s judged. Trustees of nonprofit boards can find themselves feeling threatened or having their performance called into question. Responsible for the governance and fiscal responsibility of the organization, board members rarely expect to have their philanthropic goodwill questioned. But it happens. And more often than expected.
In one situation that threatened the existence of a community nonprofit, board members were unaware that the organization’s executive director inappropriately moved federal grant funds earmarked for research into a construction project. He intended to replace the funds when raised; however, the federal agency discovered the misappropriation, and it exercised its authority to sweep all the nonprofit’s funds, leaving it on the verge of closure. To help restore public confidence, every board member—except for two who joined after the issue was discovered—resigned. It was traumatic for board members whose emotions ranged from anger to heartbreak, because they all believed in the mission of the nonprofit and weren’t aware of the executive director’s action. The organization survived and slowly recovered by pledging transparency and demonstrating new processes and safeguards under new leadership.
|This article is featured in O'Dwyer's Jan. '24 Crisis Communications & PR Buyer's Guide Magazine
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A responsive and responsible board is critical to an organization’s ability to survive a crisis. Boards succeed when they keep the organization’s mission and values as a guide to maintain stakeholder confidence. And they have a risk management and crisis plan in place to help navigate serious issues, such as:
- Employee or public safety threats.
- Misuse or mismanagement of the organization’s financial resources.
- Conflicts of interest that suggest inappropriate financial gain.
- Personnel issues such as allegations of sexual harassment or discrimination.
- Covering up embarrassing or unethical behaviors that raise questions about the organization’s values.
There’s no shortage of potential challenges and vulnerabilities when managing a successful nonprofit organization, and board members must know the risks and be proactive.
A board’s role
Nonprofit executives are on the front line every day managing challenges and maintaining public and donor support. Lack of financial resources is the top reason nonprofits fail, making it vital to maintain trust and protect the organization’s reputation. Organizations that strategically mitigate and pre-empt threats are ones that proactively communicate, set clear expectations and standards and uphold the values and mission of the organization.
A passive board or one that is detached from the organization’s leadership and operations is vulnerable. That doesn’t mean board members can get entangled in daily operations or assume they can speak on behalf of the organization from their own point of view. The board is responsible for governance and the financial stability of a nonprofit and its reputation. Understanding potential risks and having a plan that helps guide the organization during a crisis is an important pillar for good board governance.
Probing and asking tough questions is a crucial role for the board that holds leadership accountable; reviews proposed plans of action, offers expertise, such as legal or public relations or accounting talent; and uses consistent, agreed-upon messaging to help ensure the organization has a unified voice.
A nonprofit organization’s reputation is anchored in its responsiveness to its publics and in prioritizing the well-being of people and responsibility to those it serves. It’s the executive director’s responsibility to keep board members informed. If board members are kept out of the information loop, they are vulnerable to public questioning and can’t fulfill their responsibility to protect the organization.
Public interest in—and expectations on—nonprofit organizations is high because they often receive support from public entities, grants and private donations. Board members must maintain public trust. When a crisis results from an executive director being removed, it’s the board that must step in to ensure ongoing management and leadership during the crisis.
Preparedness check list
When a crisis threatens a nonprofit, leadership can take steps to help alleviate or mitigate the negative impact:
- Inform the board of the issues and facts. Provide continual updates to board leadership.
- Respond quickly when the potential of an issue arises. Hoping it will resolve itself wastes valuable time and only leaves the organization more vulnerable.
- Avoid being caught up in minute-to-minute concerns at the cost of guiding the overarching strategies that are approved by board members.
Here are tips for board members when a crisis occurs:
- Do be familiar with the organization’s crisis plan before an issue occurs. It can provide a checklist and order of actions to follow as you navigate a situation.
- Do gather the facts surrounding the situation. The board is responsible for collaborating with staff leadership and proactively addressing emerging issues.
- Do maintain confidentiality in every circumstance.
- Do ensure there is a priority on human and community safety.
- Do take corrective action as soon as possible. This might mean suspending an executive leader during an investigation or removing an executive found to have violated the organization’s code of ethics and values.
- Do communicate as appropriate with consistent messages created and approved through the crisis plan.
- Do recognize that the success and failure of an organization is tied to the work and expertise of its board of directors. Never assume all the information needed is available. Take a hard look at the situation, including causes and solutions. Stay involved and informed, and continually ask questions.
Nonprofit organizations are susceptible to many issues that can threaten their reputation and, in turn, their relationships with staff, donors and community. Preparedness by the executive leadership and board can make navigating a crisis more successful and help in the post-crisis recovery. Defining roles, communicating consistently, following a crisis plan and having a risk management process in place will help a nonprofit board be a vital asset to the health of a nonprofit.
Jill Allread, APR, is CEO of Public Communications Inc.