Are You Ready for the Next Crisis?

Posted on Wednesday, March 31, 2021

Whether it is a natural disaster, a cyber attack, the sudden loss of your Executive Director, or another pandemic, your nonprofit will experience a crisis in the future.

One of the most important steps to survive a crisis is to identify the events that could cause a crisis and determine how your organization can not only plan for event but how you will respond.  Preparing for a crisis is preparing for something that you hope will never happen but if you are prepared you will be better equipped to manage the situation.

Here a few recommendations to consider.

Develop a communications plan.  During a crisis it is important that those within your organization know how to communicate with each other and with those outside of the organization.  Define key stakeholders and how they will be contacted.  Also develop a consistent message regarding what measures have been taken.  Will your organization be suspending services or have limited hours?  How can people contact your organization?  Can your program participants continue to receive services?

Develop a public relations plan.  When a crisis occurs, there will most likely be media involved.  Designate one person within your organization to be your spokesperson.  Make sure everyone is aware that only this individual is responsible for speaking to the media, no one else.  Also provide training to this person so that they are prepared to take on this role. 

Review your insurance policies.  Many nonprofits make the mistake that any losses will be covered by insurance.  Contact your insurance provider to go over your current policies.  Discuss with them the worst possible scenario to determine what would and would not be covered.  Is additional coverage necessary?

Conduct an inventory of your assets.  If your office is destroyed, you need to know what you had to replace.  Take an inventory of anything needed to carry out your mission including furniture, equipment, technology, and software.  Also make sure you know where all of your important documents are located.

Evaluate your technology.  Cyber threats are consistently changing.  What devices are connected to your organization’s internet?  What data can be accessed?  Nonprofits can have access to a significant amount of confidential information related to their own financials, client and donor information.  Make sure it is protected.

Assess your reputation.  A nonprofit’s reputation is its greatest asset.  Damages to your reputation may lead to lost funding, difficulty in recruiting board members, employees and volunteers, and an overall decrease in community support.  What do people think of your organization?  Ask for feedback from your stakeholders.  Google your organization to find out what the public is seeing on your organization.  Make sure your website portrays your organization accurately and is up to date.

Implement a succession plan for your Executive Director and Board Chair.  These are two key leadership positions in your organization.  What if you suddenly lost one of them?  Your organization should have a written plan in place for leadership disruptions.  A succession plan prepares your organization to continue operations despite an unexpected transition and continue important relationships. 

Monitor your funding sources.  An organization that has a high concentration of revenue from one source is at risk if there is a sudden decline in funding.  Does your organization rely on one funder?  Would you be able to continue to provide services if that funder suddenly decided to stop supporting your organization?  Now is the time to consider alternative funding sources.  Can board designated funds be undesignated?  Would donors be willing to unrestrict their gifts?  Are there new ways to raise funds that you haven’t thought of before?  Also consider budgeting for various “what if” scenarios.  What if your revenue decreased 15%?  30%?  What costs would need to be decreased at each level?

Planning for a crisis before it happens enables your organization to act quickly and appropriately during a time of disruption and resume operations as soon as possible.  Planning won’t prevent disasters from occurring but it will put your organization in a better position to survive the crisis.

Contributed by: Carrie Minnich, CPA, MAcct | Director | DWD CPAs & Advisors

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.