Nonprofit Survival in times of crisis

The Covid-19 Pandemic has disrupted the nonprofit sector and sent a shock wave through charities and nonprofit organizations across the country. You know what has happened and where we are in the crisis, so I won't dwell on that. What you're looking for is what to do right now - today, tomorrow morning.

Small charities and nonprofits need to respond immediately to this situation as they typically don't have a reserve or asset base to draw on. While larger nonprofits can ride out a crisis like this, take the hit and hold on, smaller organizations need to act fast to protect themselves and preserve enough critical mass to emerge intact, or prepare to face the market in a new form. That new form could be as part of a new nonprofit entity.

Three elements will make the difference in the coming weeks: Leadership, Communication and Adaptation, and there is one common thread that runs between them.

Leadership: Now its the time for the CEO/Executive Director and the Board Chair to stay in constant touch, and by that I mean daily or at the very least, several times a week. Decisions will need to be made and made quickly. On-line communication through phone, Zoom, Text, Email, FaceTime, etc will need to replace board, committee and staff meetings. Electronic decision making will need to be implemented. There will be a need for authorities to be delegated from the Board to the senior leadership. This may include spending authorities that are extra-budgetary in order to deal with immediate concerns. Take copious notes on these decisions. A budget set months ago has limited relevance today.

Leaders will need to make staffing decisions, purchasing decisions, service delivery decisions, and choices about who and what accounts get paid - or not. Creating an Executive Response Team (ERT) allows you to spread the work amoung a handful of leaders, keeping in close contact with each other and working in tandem. Ideally, the CEO/Executive Director, Chief Financial Officer, and the person responsible for operations and service delivery need to be on the ERT. The Board Chair and one or two other board members, ideally in the legal, accounting or HR fields need to be Members-at-Large of the ERT, available at a moments notice for consultation and advice. If you can't fill each of these roles, do your best.

Service delivery will be problematic if not impossible in the short run and extraordinarily difficult going forward. Covid-19 will have a high curve, wave tail or long tail depending on what your community does today and during the next ten days. The high curve is what we see on television and what we are trying to avoid. The outcome of that is catastrophic. The wave tail is similar to a Tsunami that has a large initial wave and then smaller and smaller waves, less and less frequent as we move forward. The long tail is a simple bell curve - flattened with the trailing slope drawn out further in time as it slowly diminishes. That is what authorities are trying to achieve. Each city and town will be different and you need to assess how your community/communities are doing. Listen to the experts - your local and provincial health officials are the best source for regional and sub regional conditions. Remember that your local situation may be different than your National Office or similar agencies in other cities.

Delivering services to your client group, if even possible, will need skilled planning and execution. The person responsible for services needs to have an Operational Response Team (ORT) team of his/her own, a small group that can work with local agencies to determine how, where and when services can/should be reinstated. Rule number one: First do no harm. Seek guidance from your local municipal or regional authorities regarding a return to limited or full service delivery. Talk to like-minded nonprofits in your delivery area and see what they are doing. Now is the time to look for efficiencies and collaboration.

Human Resources Policies need to be dusted off and up dated. They likely don't address a situation like this and need to be amended to accommodate parental leave, maternity leave, care for a family member, quarantine of staff, and bereavement leave just to name a few. Its likely that Post Traumatic Stress Disorder (PTSD) and mental health issues will become more common very soon and last into the future. There are HR professionals who can assist in this regard. Listen to the experts.

Access the employment relief programs available in your area. The federal and provincial programs will not replace 100% of your staff's income, but it will make the difference and may allow them to continue working (albeit remotely, or as allowed in your jurisdiction). Salary payments, reduced working hours and deferral of expense reimbursements may need to be discussed if financial resources wear thin. Lay offs, furlough, sabbaticals, a leave of absence, what is reasonable notice, and what triggers termination need to be revisited. Labour and employment lawyers are invaluable at this time. If you don't have a lawyer on your board or a board subcommittee seek outside counsel.

If you don't have Human Resource Policies you need to connect with an employment lawyer or HR adviser. Now is not the time to learn on the job.

Assess the outflow of money from the organization. Where can funds be retained? Rent, mortgage, loan payments and contracted services all need to be examined. Employee benefit payments, GST and PST payments may have to be renegotiated or delayed. Seek advise from your accounting professionals and the Canada Revenue Agency before you withhold any taxes or payment of deductions.

The CFO needs to call all of your vendors and suppliers and ask them for terms of deferral or partial payment. Arrange to return supplies that are surplus or not immediately needed, or convert inventory that cannot be returned into cash by selling it or connecting with barter services like BarterPay Canada. Call in any receivables or outstanding accounts and collect payment. Act like an investor during difficult times, convert to cash.

Call in any and all favours. Draw on your contacts and those of your board members. This is not the time to be shy or introverted. Your organization needs help and you need to tell those people that can help you that you need them to step forward. Connect with media partners. to get your message out to clients, supporters and government. Your organization fills a critical role in the community and people need to hear how you are coping. If you have a Comms person skilled in media relations, use them. If not, the Board Chair and/or the CEO/ED need to be the face of the organization in the media.

Fundraising is difficult at the best of times for small nonprofits, let alone when an economic crisis and a pandemic join forces. Depending on the sector you are in, you may have increased awareness to your needs (health, family, relief programs) or may be distant from current pandemic related issues. Either way, now is not the time to furlough your fund development staff and volunteers. While all events will, by necessity be cancelled or postponed, there are still a lot of fund development activities that can and should be done.

Marshal together a calling circle of staff and volunteers to divide-up the names of all of your supporters starting at the highest and most recent donors and work your way down the list. Call each person or company and tell them how your organization is using their previous support to continue delivering the mission and what impact your organization is having on the lives of people in the community. Ask them how they are impacted and if there is anything your agency can do to assist them.

If you had an event planned, call everyone who bought a ticket or sponsored the event. Let them know how you are coping and ask them to maintain their purchase/sponsorship even though the event is postponed. If you need to cancel, ask them if they would consider converting their investment into a donation. Events that can be shifted into virtual reality should be. Walk-a-thons, 5 K walks, rides or runs can carry-on with participants venturing off on their own (social distancing) and sending in the pledges. Send out email invitations to a Non-Gala Galla; No Dinner Dinner, No Martini Lunch or a No-Host/No Reception. Supporters can who have a meal or drinks at home and donate the cost of an event ticket. Be creative. Organize an "It's 5:00 Somewhere" Virtual Reception on Zoom where 20 supporters come together on-line to hear a short speech from the Board Chair and share 30 minutes of socialization.

While talking to supporters, the opportunity to ask for a donation may present itself. If it does, be prepared to make the ask - "Yes these are difficult times and yes we are continuing to serve. Your support is greatly appreciated." Some donors will be in a position to offer gifts - accept them graciously. Let them know how this will help keep the organization going during this critical period and that their generosity will be gratefully received, and acknowledged. Others may not be in a position to give you anything right now - the key words there are "right now". By reaching out to them during this time, you are reinforcing your connection to them, asking how they are doing, and maintaining the relationship that you have worked hard to establish.

Keep your supporters and volunteers close and your staff closer. Losing human capital during an event like this can cripple an organization for months or years. You have worked heard to recruit donors, great staff and volunteers. Do not let them drift away due to a lack of attention. They need to know that they are valued and the best way to do that is to stay in contact with them. For staff that means several times a week. Make sure each member of the staff is called by someone in the organization at least once every two days. Set up a Zoom, Teams, or video chat session, get it going and then surprise your people with an invitation to join you for a coffee and a chat - spur of the moment - impromptu - right now. Like popping your head into their office and saying "Hey, how's it going?" I do this three times a day to ensure as many people as possible see the notice and have a chance to join in.

Which is a good segue into...

Communication: Dan Allen, CEO at D.F. Allen Communications helped guide me through a critical period during the 2009 H1N1 Pandemic when I had 10,000 international delegates and thousands of high school students attending a WorldSkills Competition at Stampede park in Calgary. When a parent of one of the New Zealand competitors died from the virus while visiting the competition we immediately went into emergency response mode. Dan's advise rings as true today as it did a decade ago... "Listen to the experts."

Provincial and municipal health experts are available to give you advise and direction. They are your best source of knowledge and insight into what is happening in your community. Base all of your decisions on the advise and direction given by the experts. Do not be tempted (or forced) to jump the gun and rush back into "work as usual". Before you relaunch a service delivery initiative, check with your legal counsel.

When you talk to staff or volunteers remember that what you see is tip of their "iceberg". They represent all of the people in their lives that you don't see. They may have a spouse or partner, kids, brothers and sisters, Moms and Dads, In-laws, grandparents and friends who are not coping well and who need their support or at very least, are constantly on their mind. With so many people working on the Covid Pandemic response, you don't need to look far to find someone who has a personal connection to someone on the front lines. Take a moment to ask how their friends and family are doing - listen to what they say and how they say it.

It needs to be repeated - call your friends and supporters. They may be donors, volunteers, suppliers, landlords, neighbours or affiliated agencies. The time you invest today will pay dividends in the coming weeks. Reach out to your counterparts in allied agencies. Call two or three colleagues in similar positions and have a virtual coffee break or a Zoom lunch. Right now there are no competitors, there are only colleagues.

Which leads to my final point ...

Adaptation: Charles Darwin published the Origin of Species 161 years ago in 1859. It has been quoted and misquoted hundreds of thousands of times since then. Distilled down to its simplest message - "Those who can adapt survive".

Looking forward, you need to be prepared to make some very difficult decisions. Doing nothing is not "Not making a decision" - by default, doing nothing is making a decision. You are deciding to relinquish control and allow fate to cast your fortune. For a leader that has so many people depending on your skills and experience, taking that route is unacceptable.

Letting one staff person go so that you can keep someone else employed (or on part time employment); making decisions about paying some bills and not others; and deciding when, if at all, it is possible to resume some level of service delivery, are all monumental decisions. Having a small group of passionate leaders working together is the best defense you can have. Create your own ERT.

At some point you may need to examine the very real possibility that your organization simply cannot continue. History is littered with stories of places, people, institutions and products that should have changed and didn't or couldn't. Easter Island, Pontiac cars, Blockbuster Video, the list is almost endless.

Whether due to a catastrophic financial failure; the inability to continue the delivery of services; a loss of staff or volunteers; or myriad other possibilities, there may come a time when you need to seriously consider the viability of carrying on. Sometimes there is no other path except to de-register and shut the doors.

Options may exist that allow your cause to continue beyond the life of your organization. Each year a few thousand charities and nonprofits make the decision to either close up shop or join together with another agency into a new single unit. Visions, missions, values and goals are either abandoned or examined in hope of finding common ground with a like-minded organization. If successful, staff merge and resources get combined. Life goes on, albeit in a different form, better adapted to the changing landscape.

If a closure, merger or amalgamation are being considered, your first step should be to contact Canada Revenue Agency to make sure you understand the options available to you and the impact of each decision. There are several legal firms that are well equipped to assist in this process. The Canadian Charity Law Association, Solimano Law in Vancouver or Blumberg Charity Law in Toronto are excellent places to start.

In the end, it all comes down to Leadership; Communication; Adaptation; and listening to the experts.

Richard L.H. Walker B.Sc., MCIP

Richard Walker is Vice Chairman and Senior Partner at Global Philanthropic Canada