Attn: Crisis Planners – A Leadership Plan For a Nonprofit Organization in Trouble

By: Eugene Fram

When a nonprofit origination encounters serious difficulty, the level of board oversight needs to increase substantially. From my own personal experience, it amounted to the executive committee reviewing and monitoring critical outcomes every two weeks for about six months, in addition to the monthly board meetings.

For the executive director, or interim executive director, it involves taking the following steps:

• Obtain a new external audit or update the most recent external audit. This provides an assessment of how financial controls are operating and highlights important financial concerns.
• Meet monthly with the board finance committee. The committee should have a good understanding of the financial situation. In addition, it can provide support if quick fiscal changes must take place.
• Ask a trusted consultant to provide an objective, third party, evaluation of key personnel. This will help provide a rationale for any personnel changes that need to be made quickly. It should also help the executive director to assess staff strengths and weaknesses more quickly.
• Establish a board-staff committee composed of individuals with reputations for being creative thinkers and doers. Ask for their suggestions for increasing revenues, enhancing fund raising efforts, cutting costs and other issues such as improving morale
• Make decisions quickly and limit participation in decision making to a reasonable level of staff involvement. Don’t let matters drag for too long. Be alert to persons or groups who want to prolong the discussion process either to further their own private agendas or because they have inadequate skills and fear change
• Make necessary administrative changes as quickly as possible. Don’t hesitate to move quickly to remedy long- standing administrative problems. The high-performance group of staff members will be delighted and low achievers may see the handwriting on the wall and plan their departures.

Source: Eugene H. Fram & Robert F. Pearse (1992), “The High Performance Nonprofit; A Management Guide for Boards & Executives.” Families International, Milwaukee, Wisconsin.

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