Nonprofits often face complex and unpredictable challenges that can threaten their reputation and credibility. A crisis can arise from internal or external factors, such as misconduct, fraud, mismanagement, natural disasters, or social media backlash. How can nonprofits assess reputational risk in a crisis and respond effectively to protect their image and mission?
Reputational risk is the potential loss of trust, support, or influence that a nonprofit may suffer as a result of a negative perception or opinion about its actions, values, or performance. Reputational risk can affect a nonprofit's ability to attract and retain donors, volunteers, partners, and beneficiaries, as well as its advocacy and policy impact. Reputational risk can also expose a nonprofit to legal, regulatory, or financial consequences.
When you are working through your risk analysis make sure you have a diverse group as a part of the discussion and not just the leadership team. The more diverse the group (I mean that in all ways, from age to time with company, gender, ethnicity, etc.) the less likely you are to miss a potential risk.
To assess reputational risk in a crisis, a nonprofit needs to identify the sources and causes of the negative perception or opinion. These can range from internal ethical breaches or scandals involving staff, board members, or beneficiaries to external financial mismanagement or fraud. Ineffective or inefficient programs or services, a lack of transparency or accountability, poor governance or leadership, conflicts of interest or values, negative media coverage or social media feedback, competition or criticism from other nonprofits or stakeholders, and political or social controversies or changes are all common sources of reputational risk for nonprofits.
In order to evaluate the impact and severity of a negative perception or opinion on a nonprofit's reputation and credibility, one must consider the extent and reach of the negative opinion, the credibility of the source, its relevance and validity, the expectations of key audiences and stakeholders, how it aligns with the nonprofit's mission and values, as well as any potential or actual consequences it may have on the nonprofit's operations, finances, or legal status.
In order to adequately address reputational risk, a nonprofit must develop an appropriate, timely, and effective response strategy. This strategy should include a clear and consistent message that communicates the nonprofit's position, values, and actions. It should also designate a spokesperson or team to interact with the media, social media, and other stakeholders. Additionally, the strategy should include a proactive and reactive communication plan that reaches the nonprofit's key audiences. Furthermore, a monitoring and evaluation system should be implemented to track the effectiveness of the response and measure changes in perception or opinion. Finally, a learning and improvement process should be implemented to identify and address the root causes of the reputational risk and prevent or mitigate future crises.
In addressing reputational risk during a crisis, every npo must develop a strategy that is timely and effective. Assigning a team to manage interactions with the media and stakeholders is crucial. A comprehensive communication plan should target key audiences effectively. Implementing a monitoring and evaluation system is essential to gauge the response's impact and track shifts in public perception. It’s vital to establish a process for learning + improvement, aimed at identifying and addressing the root causes of the reputational risk. This approach helps in managing the current crisis and also in mitigating future risks, ensuring the npo maintains its credibility and trustworthiness. Above all, have a robust compliance program in place.
Managing reputational risk in a crisis is not a one-time event, but an ongoing process that requires constant attention and adaptation. Nonprofits need to maintain transparency and accountability, build and nurture trust and relationships with key audiences and stakeholders, demonstrate and communicate impact and value, align and reinforce mission and values, seek and respond to feedback and criticism, collaborate and cooperate with other nonprofits and stakeholders, anticipate and prepare for potential crises, and learn from past crises in order to effectively manage reputational risk.
I believe a crisis can act like an X ray of an organisation. If operating effectively, an organisation can get through, and even enhance their reputation in the long term following a crisis. If an organisation already has reputational, organisational or service delivery issues, a crisis will magnify them. Worse a crisis tends to expose poor leadership, lack of empathy, and gaps in systems and processes. Whatever your pre crisis state, how you manage a crisis will impact your reputation. Show your stakeholders that you put them first, that the crisis is yours to fix and that you're up to the challenge. Don't fail to communicate or hide, listen and engage with your stakeholders, they will remember. Use the crisis to live your values.
Assessing reputational risk in a crisis can help a nonprofit protect and enhance its reputation and credibility, strengthen and sustain its mission and impact, increase and diversify its support and influence, reduce and avoid its costs and liabilities, as well as improve and innovate its performance and practices. Doing so will not only help the organization better weather the storm of a crisis, but also equip it with the necessary tools to come out of it stronger than before.