When the financial crisis hit, I was living in California. This was one of the “hardest hit” states, meaning the crisis lasted well into 2010 before recovery efforts started to make a dent. During this time, I was first a volunteer for a legal aid organization desperately trying to curb the foreclosure crisis among senior citizens, then eventually hired on as a full time Paralegal. I had a front row seat to the efforts enacted by government, nonprofit organizations, and corporations to address the economic disaster that unfolded. I watched partner organizations close their doors and some surge to greater success than they had previously achieved. Here are a few things I learned:
Those who failed to plan ultimately failed.
All over social media today, as the COVID-19 virus rapidly spreads through our communities, I am seeing posts by individuals and organizations that claim everyone is overreacting. They spit on “social distancing” and anyone who dares to plan ahead for the next 30 days. Not surprisingly, this was also a common reaction during the start of the financial crisis. I witnessed many individuals with these beliefs lose their homes and their life savings during the crisis, while others who had made drastic cuts to their spending managed to hold on to their homes and ride out the storm. The same held true for nonprofit organizations. The organizations who proceeded confidently forward in planning and coming up with alternative programming and alternative funding sources survived with minimal layoffs and minimal impact to their constituents. Those who refused to plan or adapt early on in the crisis eventually faced massive layoffs resulting in major impacts to programming.
Organizations who relied on layoffs to thwart funding shortfalls ended up taking longer to recover.
If morale is shot and half your staff is gone, how will you rebuild when the crisis is over? The staff that remain burn out quickly and face emotional struggles and continued uncertainty. Then leaders want them to exert more effort into rebuilding or even worse, maintaining the status quo with half the staff.
Often, layoffs are the knee-jerk reaction to a financial crisis at a nonprofit organization. I’d counter that layoffs should be the last resort. You need a strong, healthy team to get through this. Now is the time to throw all your obligations and priorities out on the table. Get out your contracts and grant agreements.
What are your deliverables?
What are the minimum requirements for reimbursement?
What could trigger a repayment of funds?
What programs are critical to the survival of your consituents and what programs can be put on pause?
What new funding opportunities exist because of this crisis?
What new donors might this situation have created?
Get all of those details listed out. Throw your mission statement up on the wall in front of you. Pull out your vision statement. Start planning how you will honor your mission statement and values while fulfilling your contractual obligations. How will you make people the priority? Figure out plan A and plan B without layoffs even being on the table yet.
Value your staff as you value the people you serve.
Many executives will proudly proclaim they put the people they serve first. As a donor, it tugs at the heart strings and makes you feel confidence. But pull back the curtain and you might find those same constituents aren’t being well served because the staff serving them are not a priority. Stressed and overworked staff members lead to missed objectives and poor service delivery. Be aware of statements that prioritize some people over others and consider the potential impact on your staff.
In times of crisis, your staff need your support more than ever. Sir Richard Branson, owner of Virgin, famously said "Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients." As concerns over your client-base increase, remember his words. “What makes Virgin particularly wonderful is the wonderful group of people who believe in what they’re trying to do. Who are appreciated, who are praised, not criticized, and are given a chance to do a great job.” Your employees need stability and support now more than ever. If your clients are to be well served, it is an executives job to support those who do the direct serving.
Making assumptions about donors.
The quickest way to find out how donors will respond is to ask them, but sometimes assumptions come faster than facts. One might assume donors won’t donate at all, but some donors open up their wallets in times of crisis. Sometimes new donors emerge as they realize the needs of their community aren’t being met. Now is the time to directly tie donations to immediate impact. Focus attention to how their donations will positively impact the community through the crisis.
The executive island is a lonely and scary place to be.
Many executives believe it is their job to fix this problem and tell the staff what will happen. They may hold negative financial information close to the chest and only share it when things have reached a critical level. But in times of crisis you need an informed team working together, with a strong coach empowering them. When executives keep information to themselves, the individual staff members withdraw into panic. Their worst fears become the only voice in their head. Layoffs will be at the forefront of everyone’s mind and there is no way to avoid that. By keeping the financial information a secret, you only increase that panic and reduce efficiency. Address the concerns head on and be as transparent as possible with staff while empowering them to help problem solve.
Opportunists come out of the wood work
Some individuals see crisis as a financial opportunity. In desperate times, individuals make more decisions based on emotion and some people take advantage of that.
Nonprofit organizations may be contacted by “donors” with “creative” funding solutions, that are ultimately scams. While hiring consultants and partnering with new funders could be necessary to protect your organization, make sure you complete your due diligence first.
Support your executive staff.
Unfortunately, we are in difficult times. Sometimes there is no hero that swoops in to save a program. It is a hard reality and devastating to the people who sacrifice for those programs. If your leader is trying their best, please be their biggest supporter. This doesn’t mean you blindly follow someone not worthy of following, but it does mean you acknowledge that supervisors and executive staff are humans too. They don’t always have the best answers or magical solutions. In times like this, sometimes staff demand executives to be superhuman. Right now the whole world is struggling and it just isn’t fair to them either. When all staff members come together to focus on solutions there will be more gains than when the entire weight of the problem is thrown on the shoulders of one person. Consider, how can you be an active member in finding solutions instead of demanding them?
Photo by Frederick Tubiermont on Unsplash