The Responsibilities of Nonprofit Boards in a Crisis
The tragedy of September 11th has caused us to think about the responsibilities of a nonprofit board in such a crisis. Since then, New York nonprofit agencies have been, in the words of one Governance Matter member, "Trying to recover ourselves while we help others recover."
The following is derived in part from a discussion among Governance Matters members that focused on NYC's tragedy. Nonetheless, we believe it is relevant for nonprofits in any catastrophic situation. This write up is intended to stimulate thought and action on the part of nonprofit boards. Governance Matters would welcome your comments on how to make it more useful.
Legally, nonprofit boards are always responsible for exercising the duties of care, obedience and loyalty in overseeing their organizations. From a practical standpoint these duties translate into the following commonly accepted tasks for nonprofit board members:
- Ensure that the organization's mission is clear, appropriate and relevant as times change.
- Oversee the organization's programs and activities to be sure they support the organization's mission and achieve the organization's short-term goals and long-term purpose.
- Exercise fiduciary responsibility to obtain and appropriately use the resources required to carry out the organization's mission and sustain it.
Since the agency staff is likely to be overwhelmed in a crisis, the board's responsibility to think strategically takes on magnified importance. The following is a check list of questions that a board may need to consider.
Does the crisis affect the agency's abilities to pursue its mission? Unforeseen needs develop in a crisis. Are there areas into which the organization should expand its mission to meet a clear need of its constituency? Are there needs that it is inappropriate for the agency to fill?
- What does a quick environmental audit reveal about the crisis' impact on clients/audience/members, donors, suppliers, and other service providers?
- With staff, determine if existing programs need to be altered, expanded or put on hold. Are new programs required?
- Are additional resources required?
- Is coordination with other providers required? Can providers elsewhere help?
- In light of above, do goals, objectives, accountability measures need to be modified?
- Does the crisis affect the agency's ability to carry out its programs? What is the staff doing to deal with these issues? What assistance/guidance can the board provide?
- What is the physical impact? Are space and technology usable? Is additional program space required to accommodate increased or changed demand?
- Are cash flow/reserves adequate?
- Are staff members personally affected? Are they able and willing to work? Have they suffered personal loss? Shock? Fear for personal safety? Need time to process emotions? Availability of transportation to work site?
Fiduciary responsibility -
- How should the board/agency handle PR and community relations associated with all of the above, e.g., physical displacement, program changes, need for funds, etc.
- Do the board/the agency have designated spokesperson(s)? Does everyone know who that is?
- Is this a time to contact and/or recruit donors/clients/volunteers?
- Does the agency need to coordinate public response with others in its sector?
- If applicable, document and disseminate agency's response to crisis.
- Is the agency financially affected by the crisis? Cash flow? Additional cash needs? Fundraising plan effected?
- What does the board need to do to be sure necessary resources are available?
- Does the crisis offer an unforeseen fundraising opportunity?
- Does it raise any funds allocation or accountability issues?
- Does the agency have adequate reserves?
- In the press of the crisis, are regulatory and other reporting requirements being handled? Can they be put on the back burner? Does staff need help in this area?
- Do insurance claims need to be made? Is that underway? Is insurance adequate?
- Is the crisis causing modifications of mission/program that will have a longer-term impact on other resources, e.g., staff, space, and technology?
- What does the board need to do to be sure these additional/different resources are available?
- Does the agency have an emergency response plan?
- If yes, did it work? What can be learned from this experience?
- If not, see that one is put in place. This may be an area where a board task force could be of real help to staff.
- Does the board have the information and resources it needs in light of the above?
- Do new skills need to be recruited onto the board?
- Does the board need training?
This is a long list. Not every question is relevant for every board or situation. But as guardians of the public trust, boards have important responsibilities for leadership in times of crisis. This is one tool to help them identify these responsibilities.
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