CCF/SCF Tools Managing Crisis
- Prepare For Crisis
- Economic Downturn
- Loss of Funding
- Loss of Physical Assets
- Human Assets
- Employee Lawsuit
There are two sides to managing any crisis: preparation and response.
Organizations that anticipate the possibility of disaster and plan ahead will be far better equipped to manage potentially catastrophic situations or avoid them altogether. In this training module, you will examine potential crises that an organization can be forced to deal with— first from the perspective of preparedness and second in terms of response. This training will begin with a general context and then move into five specific areas in which nonprofits can be particularly vulnerable.
Careful preparation will help cushion the blow of a crisis.
Taking the time to develop a comprehensive crisis management plan can make the difference between going under and getting back on track. While many of the steps towards preparedness included in a crisis management plan are useful for coping with disaster, others are good practices even under normal circumstances for promoting the overall health of your organization.
Conduct a SWOT analysis - the first step to preparing a general crisis response plan.
To make your organization as crisis-ready as possible, create a crisis response plan. The first step in developing this plan is to conduct a SWOT analysis.
Conducting a SWOT analysis is a good way to determine which possible crises are both plausible and would pose a serious threat. A SWOT analysis examines an organization's Strengths, Weaknesses, Opportunities, and Threats. This is best done with a group of key employees, volunteers, or supporters of your organization. Special attention should be paid to the weaknesses and threats you identify. Examine those threats and weaknesses to identify which crises are most likely to confront your organization. Is your office located in a flood zone? Is the current economic or political climate unstable? Do your activities open your organization up to litigation or negative media attention? Is it plausible that your organization may experience a major, disruptive change such as the departure of the executive director or the end of funding for a major initiative?
Once a list of plausible crises is assembled, the group should then brainstorm what would happen to the organization were the crisis to take place. What would be the cost in terms of money, assets, reputation, or the well-being of staff, clients, and volunteers? How could these effects be minimized or mitigated? Asking these questions will start the process of formulating a crisis response plan.
The U.S. Small Business Administration's Introduction to Strategic Planning contains a chapter on conducting a SWOT Analysis.
Form a crisis management team as a core part of your crisis response plan.
This team should number five to seven people, comprising board members, staff, volunteers, or friends. The plan should detail what responsibilities each member of the team would handle in the event of a crisis. The following roles should be included in the plan:
Decision maker: For most organizations, the default decssion maker is the executive director. Consider designating a back-up decision maker in the event that the executive director must focus his/her energy as a spokesperson or to other duties. The decision maker should be equipped with a checklist of what bare essentials are necessary to resume operations in the event of a major disruption.
Spokesperson: Crises of a public nature require careful attention to presenting the public face of the organization. Not all crises will have this level of public visibility, but for those that would, think carefully about who is best suited to portray your organization in the best light.
Internal communications manager: Someone with a good sense of who will be affected by the crisis should be accountable for ensuring that the internal communication component of the crisis management plan is executed and that staff, volunteers, and other key players with any information they may need. For example, if a natural disaster has forced a nonprofit to evacuate its facilities, how will clients know if services are still available, or where to go to find them? How will regular donors be informed if the organization needs emergency funds? How will staff know where to report to work?
The internal communications manager should ensure that an updated contact list is copied and stored somewhere off-site. Uploading it to a website can be a useful option, though a physical copy should also be made available. The plan should clearly state who will be responsible for accessing this list and what methods they will use to see that necessary information is delivered.
Assemble the crisis management team and put the plan into action.
Depending on the exact nature of the crisis, the crisis management team should determine how much detail is appropriate for different stakeholder groups to know, from board members to staff, volunteers, media, clients, or funders. The team should determine what methods of communication will be used for each group, whether a personal phone call or a notice on the organization's website. If bad news needs to be delivered to any of these parties, it is best done all at once, rather than doled out over time. The team should also anticipate that, in any crisis, there is likely to be a proliferation of rumors and exaggerations. Steps should be taken to correct these as quickly and effectively as possible.
It is important to remind staff that all media inquiries should be routed to the official spokesperson. Emphasize this by informing them that there could be serious consequences for failing to adhere to the policy. When dealing with the media, the spokesperson should always be honest and proactive. It is helpful for the spokesperson to make a summary of the known facts of the situation on a regular basis and continue to update media contacts as it evolves.
Click below to open interactivity In the event of a crisis, having a crisis management plan can ease the rigors.
It is vitally important that leaders and decision makers remain as calm as possible.
One of the most challenging aspects of any stressful situation is handling one's own emotions, which can include fear of disaster, avoidance, over-optimism, or defeat. Even in a time-crunch, it is vitally important that leaders take moments to self-reflect. Key questions to ask onself during these times include:
- How am I feeling? (Overhwlemed? Panicked? Confident? Scared?)
- How are my feelings affecting my actions?
- What is in my control, and what is not?
- What information / advice do I still need to make good decisions?
- Am I prioritizing effectively?
- Is our response true to the organization's mission
- Is our response considerate of the health, well-being, safety and interests of our clients, staff, volunteers and others affected by the crisis?
An important priority, especially in situations where a crisis is likely to extend over a long period of time, is for leaders to take care of themselves. Since key decision makers are the ones in the position of greatest responsibility, they are often carrying more than their share of stress. They should sleep regularly, eat a balanced diet, take breaks, and make time for exercise.
With a good system for communicating with key players in place, and with leaders allowing themselves time to reflect and care for their physical and emotional health, an organization will be well-placed to respond effectively to even the most unexpected and disruptive situations. The exact nature of those responses will obviously be dictated by the type of crisis the nonprofit is confronting, but certain key considerations should always remain at the heart of the decision-making process.
Your response process should not end once normal operations have resumed.
It is very important that, once the dust has settled, an effort is made to review the crisis event and see what can be learned from it. Taking time for this will help ensure that your organization is even more prepared for the next crisis, if one should occur.
Gather together key players or, in smaller nonprofits, your entire staff. In an open, judgment-free setting, ask the following questions:
- What were the early warning signs of the crisis?
- Could we have recognized it sooner?
- What were the organization's weaknesses and vulnerable points that led to the crisis?
- Did we follow our crisis management plan and, if so, was it effective?
- If we did not follow our crisis management plan, why not?
- How effective was our response?
- How effective were our communications?
- Did we have the right people on our response team?
- How well did our leaders function?
- What could we have done differently?
- How can we better prepare for a similar situation in the future?
Another important step at the end of any crisis is to make an effort to give all those involved a sense of closure. In smaller organizations, the executive director or manager could go to each employee or department and discuss with them what occurred. They should provide an honest picture of what happened, thank everyone for their efforts, and outline plans for moving forward. In some cases, an appropriate gathering to mark the end of the crisis and re-energize people about the next phase could be beneficial.
Finally, the organization should make sure to compile a complete record of what happened. If a similar event occurs in the future, this information will be an invaluable resource.
Take the precautionary steps to insure your financial stability.
There are a variety of steps a nonprofit can take to improve financial stability and improve chances of weathering a tough economy:
- Vary cash deposits among different banks, and make sure that they are insured.
- Keep investments diversified and varied.
- If at all possible, make it policy to maintain a cash operating reserve that will cover at least six months of expenses.
- Remember that assets such as property or artwork are not the same as cash on hand.
- Make sure that your revenue comes from a variety of sources rather than relying heavily on a single funder.
- Regularly reevaluate revenue projections and adjust expenses accordingly.
- Clearly state the responsibilities held by management and the board. Make sure that financial information is regularly available to them and that decision making happens in an efficient manner.
- Services should not be increased when a one-off influx of capital is acquired. Instead, capital should be used for improvements or to cover temporary deficits.
- The possibility of investing capital in assets should be considered carefully and kept as flexible as possible.
It may be useful for an organization to consult with a financial advisor who specializes in working with nonprofits. Nonprofit Finance Fund, for example, offers consulting services, workshops, and clinics that can help an organization make sure it is managing its finances in a sound, stable way.
Prepare for a loss of revenue and/or spike in demand for services.
Consider partnering with a complementary organization to share space or other resources. If your nonprofit offers services that are particularly applicable to times of economic depression, be more aggressive in approaching government sources for funds. It may also be possible to renegotiate debt or leases for better terms. In times of economic hardship, low tenancy rates and a depressed real estate market may make it possible for some donors to give free space to nonprofits, which can lead to a significant cut in expenses.
Above all, a nonprofit is most likely to survive such a crisis by being proactive. Budgets should be written with both best- and worst-case scenarios in mind, and revenue projections should be made regularly. It is important to develop a response plan to a worst-case-scenario revenue shortfall ahead of time. Organizations should also make a particular effort to thank donors and reach out to them personally.
Avoid common financial pitfalls that put the organization at risk during economic downturns.
The best way for a nonprofit to prepare for the possibility of a recession is to make sure that the organization is financially healthy from the start. There are a number of practices that many nonprofits make use of which can actually weaken their overall fiscal health, including:
- Excessive borrowing — Organizations that borrow at attractively low rates against their endowments or based on high revenue estimates can be left holding the bag when the economy slows.
- Owning space — Many organizations try to take advantage of real estate booms by overbuilding, gambling that the market value of property will continue to increase, or that excess space can be leased to produce more revenue. When real estate markets collapse, these organizations may have difficulty securing tenants and be faced with high fixed costs.
- Building an endowment — This is often considered the “holy grail” of nonprofit finance, but endowments can be very unreliable sources of revenue, particularly when they would most be needed, i.e., in times of wide-scale economic distress.
- Unnecessary spending — In good times, organizations might expand operations assuming that the organizations itself can take on all the risk of carrying the organization. Developing partnerships, forming relationships with potential champions and advocates, and ensuring that the work of the organization is work that is most necessary puts organizations in a better position to whether a downturn.
In addition to these practices, nonprofits are handicapped by a lack of flexibility when it comes to their workforce. Where for-profit businesses can often downsize during hard times to cut costs, this isn’t always an option for nonprofits. A hospital, for example, can rarely afford to cut nurses, nor can an orchestra trim back on violin players.
When responding to a recession it is important to maintain your nonprofit's mission.
When the downturn hits, even with the best preparations, the organization will need to take additional steps to respond. The good news is that recessions provide a great opportunity to re-focus and realign to ensure that the activities of the organization are strongly connected to its mission. These times are ripe for an analysis of the efficiency and effectiveness of an organization's operational structure.
Ideally, the response to an economic downturn happens as early as possible, picking up on early warning signs. At this time, the crisis management team should assemble and examine the overall financial health of the nonprofit. To do this, first examine each of the organization's revenue sources and evaluate whether any of them are likely to be cut off or reduced because of the crisis. This examination should include government grants or contracts, foundation and corporate giving, individual donations, and attendance at special events. Revenue projections for all these sources should be carefully reevaluated to see if expenses will need to be cut.
The team should also take into account that, in times of recession, payments will most likely be later than normal and bills will be demanded more quickly. Plans for expansion or large investments such as the construction of a new facility should also be carefully reconsidered.
To prepare for the possibility of cuts, the team should take a careful look at programming:
- Which programs are most critical to the organization's mission?
- Which programs are least mission-critical?
- Which programs are most expensive to operate? Could these operate more efficiently?
- Which programs are likely to see a greater demand during a recession?
- What programs are the organization's donors most likely to continue to support?
Asking these questions, should it become necessary, will help make these tough decisions clearer.
Weather the loss of a funding source.
The steps to prevent being unprepared when a major funding source vanishes are similar to those of surviving an economic downturn. Organizations should diversify revenue sources and establish a cash reserve to cushion the blow. Leaders should also make every effort to stay informed about the stability of their primary funding source and proactively take measures to retain the source.
Specific elements of the crisis management plan for weathering the loss of a funding source include:
- Have an emergency budget: The budget should set out the minimum amount of money that would need to be earned each month in order to maintain a basic level of services. This will need to be regularly updated.
- Train the crisis management team: The crisis management plan for the loss of a key revenue stream should begin with designating a recovery team. The team should be trained in fundraising skills. This is generally a relatively easy process, though the act of fundraising itself is obviously quite hard work. A training session can often be completed within a single day, or even an afternoon.
The crisis recovery team should dedicate time to identifying potential revenue sources.
If the unpleasant reality of losing a primary funding source occurs, the organization should activate this recovery team to significantly increase the level of effort going toward fundraising and revenue development. Members of the team should be prepared to spend seven to ten hours per month strategizing and fundraising in addition to their usual responsibilities.
The team should begin by assembling a list of potential revenue sources. The list should be made as diverse as possible, and it should combine larger sources that may take a longer amount of time to pay off with smaller sources that can be realized more immediately. A few ideas for potential sources are:
- Hold a membership drive.
- Charge for subscriptions to a newsletter.
- Run a gifts campaign.
- Charge fees for services, using a sliding scale.
- Sell products such as T-shirts and stationery.
- Speak at professional organizations and service clubs.
- Apply for grants from local corporations, service clubs, churches, or unions.
- Apply for a line of credit from the bank.
- Hold special events such as concerts or parties.
- Sell booklets or manuals with useful information.
- Approach corporations for sponsorship.
After identifying potential revenue sources conduct a cost benefit analysis.
Once the recovery team has assembled a list of potential revenue sources, it should evaluate each using the following criteria:
- Estimated potential revenue
- Appropriateness of the activity in relation to your mission
- Research required
- Time needed to implement (is this a short or long term approach?)
- Number of staff and volunteers required
- Liklihood of success
- Appropriateness of revenue source
With this information, identify activities that will yield the most revenue with the amount of time and resources the organization can afford to deveote.
When making cuts, leaders of nonprofits can think creatively and take care of people as much as possible.
First and foremost organizations are made of people, and in the case of nonprofits, these people are typically very dedicated and usually not very highly compensated. When cost-cutting is necessary, it is important to reassure staff of their security where possible, and to maintain transparency when this is not possible. Some strategies include:
- Hold regular meetings to update the team on additional revenue generating activities and the status of these activities.
- Reward and recognize staff members and volunteers putting in additional hours to support revenue development on top of their normal activities.
- Be straight with people about difficult measures that may need to be taken with as much notice as possible. Maintain an open-door policy for employees who may be very concerned about their own livelihoods.
- If the organization is renting its office space, it may be possible to negotiate with the landlord for a free month or discounted rent, which he or she may agree to when faced with the alternative of a vacant property.
- It may also be possible to share space with another nonprofit, e.g., with one group using the offices during regular daytime hours and the other using them in the evenings.
- To avoid layoffs, consider temporarily reducing staff hours and pay. This is a hard pill to swallow for employees, but clear communication about the reasons and the alternatives (letting people go) help make this less painful.
For any of these ideas, consider hiring a consultant with experience in making these changes. The fee for consultants ranges from $300 to $1,500 per day, though some may choose to donate time if asked. Be sure to thoroughly check the references of a potential consultant before they are hired, and interview them to make sure that they are not only skilled, but enthusiastic and capable of responding to your nonprofit's particular situation.
There are several elements of the crisis management plan related to protecting physical assets.
As an organization you must try to prevent the loss of key physical assets and to work to recover from the loss of these assets. To do this, the crisis management team should take the following steps:
- Make a list of items that the organization would have a difficult time operating without. This could include office space, office equipment, computers, contact directories, account numbers, and important documents.
- Digitize and duplicate documents, titles, licenses, and directories. Physical copies should also be made and stored in an off-site location in case a natural disaster makes Internet access unavailable. This should absolutely include an up-to-date directory of contact information for all staff members, board members, and key volunteers, as well as for accountants, insurance agents, banks, and creditors.
- Maintain an up-to-date list of all equipment, including serial numbers and cost. This should also be duplicated and backed up, as it will prove very useful if it becomes necessary to make an insurance claim.
- While data and documents can be copied and backed up, it is harder to replace office space. The crisis plan should include a list of potential recovery locations should office or program space become unavailable. These could include a staff member's home or locations that can be temporarily rented, such as hotels or conference space. Consider forming mutual support agreements with other nonprofits in the area. These agreements can allow for space sharing, which will enable both groups to continue at least limited operations until a permanent solution can be found. Think about this before you need to minimize disruption in the event of a severe crisis.
Click below to open interactivity Electronic data plays a vital role in crisis management.
The loss or damage of a physical asset requires immediate response.
It is far more likely that your organization will face fraud or theft than a natural disaster – so it's perhaps more critical to take steps to minimize the risk of fraud and theft. Consider the following steps:
- Limit access to valuable resources. Only necessary staff members should have access to supplies and merchandise.
- Limit authority to sign the organization's checks or access bank accounts.
- Protect confidential donor information such as credit card numbers. The theft of this information can have devastating consequences, as donor confidence will be greatly undermined and the organization's reputation may be irreparably damaged. Sensitive information like this should always be stored on a secure server and be password-protected.
No matter how well you have prepared for the possibility, coping with the loss or damage of a major physical asset such as office space or computer systems will require quick, focused, swift action to minimize impact.
Be prepared to do the following:
- Contact the police.
- Inform your insurance agent – let him/her know as soon as you have discovered the loss. Make sure you know what information needs to be provided before making a claim.
- Communicate clearly and repeatedly to staff, volunteers, donors and stakeholders about how the loss will affect them.
- If the theft was of data rather than equipment, any clients, donors, or staff whose information may have been compromised must be informed immediately.
- If your office space is unavailable, consult your list of recovery sites.
In a situation where an organization's office or program space becomes unavailable, the organization should consult its list of potential recovery sites and establish which one is the most appropriate. In the case of a large-scale disaster, not all sites will be available. The crisis team should examine factors such as accessibility to clients, available space, cost, and time involved in making arrangements to use the location. Consider whether you will be able to return to your previous office or program space and how long it might take to do so. Which of your recovery locations would be available for that much time?
After a recovery location has been selected:
- Relocate undamaged equipment.
- Replace damaged equipment that is necessary to resuming operations. Consider leasing or borrowing equipment if possible.
- The team should develop and implement a communications plan to inform staff, volunteers, clients, and vendors about the new location.
- If services will not be immediately resumed, make sure that this information is disseminated through the media, a phone tree, and/or a website.
- Arrange for call forwarding to the new site.
- Be sure to maintain payroll.
- If the relocation is required because of damage to office space or equipment, be sure to contact your insurer and inform them of the situation.
- Recover critical documents, digital files, and contact information and make sure to bring them with you to the recovery location.
When the loss of office space is due to a large-scale natural disaster, a few additional steps will need to be taken:
- Reassess the level of need for your services. Times of disaster can radically shift the priority needs of clients. Consider a temporary shift in activities or a break from operating.
- Determine if any key suppliers are still operational. If not, find alternate suppliers for necessary materials.
- Determine if staff requires transportation to your location.
- Determine if staff needs emergency housing.
Focus on retaining employees by paying careful attention to organizational culture.
Minimizing the impact of losing key human resources starts with taking steps to ensure that they are not lost. Consider the following strategies:
- Hire employees with a strong personal commitment to the mission of your organization. The first step here is making sure the mission is clearly and powerfully stated on any hiring materials.
- Provide ample training. Don’t send new employees up a creek without teaching them how to properly paddle.
- Provide fair, competitive compensation.
- Reward employees for working extra hours by providing overtime compensation or time-in-lieu to reduce burn-out.
- Check with employees regularly to monitor their job satisfaction.
- Create pathways for promotions and new opportunities.
- Keep workloads manageable – allocate tasks carefully.
- Allow for flex during less busy times to build good will to extra time and effort during surge periods.
- Align what staff are good at and what they enjoy with what they do as much as possible. Build on people’s strengths rather than focusing on their weaknesses.
- Create a culture of collaboration and relationship building; people are less apt to leave organizations where they have developed close personal ties.
- Recognize and reward individual contributions.
- Set up policies that take care of people. For example, implement flexible core hours so people can tend to important responsibilities outside of work; create a strategy to be able to offer paid maternity leave; develop job-share roles to accommodate talented staff who need to reduce working hours for personal reasons.
- Create an inclusive environment. Pay attention to the make up of your board and management – are they all from a similar cultural background? Are all employees aware of what the organization will do to accommodate disabilities? Are training and promotions seen as fair? May employees take off their own religious holildays and work on Christmas in return?
Retaining executive directors and other high-level leaders presents a different set of challenges. The average tenure of nonprofit executive directors is surprisingly short. Inspiring leaders are often core to the ability of the organization to fundraise and attract top talent and organizations that have had this kind of leader can face crisis when this type of leader leaves. In retaining high-level directors and managers, consider the following:
- Has the organization gone through a high-stress or crisis period? Executive directors often leave after surviving a crisis to prevent burn-out and get a fresh start. The board should take measures to take care of the executive director during and after these times of crisis.
- Are the leaders getting bored? Look for signs of passion waning and stay in tune with the current passions of talented leaders. Is there anyway to re-inspire and re-engage talented leaders? Speak openly about this and explore ways to shift responsibilities or incorporate some of the leader’s new ideas into the work. Good leaders aren’t easy to replace.
- Keeping open conversations about the aspirations of leaders of the organization will ensure that you are not surprised when that leader decides it is time to move on.
- Abrupt terminations due to inappropriate or illegal activities happen. The impact of sudden departures can be minimized through careful planning.
- Minimize the effects of a lost employee by having a succession plan.
The loss of someone who plays such a key role can make it very difficult for an organization to maintain even basic operations, never mind muster the resources and clear thinking needed to plan for an orderly succession. An organized transition can sustain morale and ensure the continuity of services.
To ensure an organized transition, even in the case of an abrupt departure, ensure a succession plan is part of your crisis management plan. A succession plan is a set of activities, policies and instructions for making the search for replacement leaders as smooth as possible. The plan should include:
- Develop working relationships with consultants, volunteers, and temp agencies who can help you “fill the gap” while the search for a permanent replacement is underway
- Develop procedures for handling the contacts, projects, and files of departing staff members so that nothing gets lost in the shuffle
- A pre-set, developed policy that lays out the expected approach for searching for and hiring an executive director
- Ensure that at least one person within the organization, or a board member or retired director, continues to shadow the executive director and understands that s/he is the designated interim leader in the case of an abrupt departure
- Groom talented staff for leadership positions – consider creating a management development program, however small or informal
- Have an emergency fund available or know what you would need to cut to cover the cost of finding a replacement, including fees for search agencies and listings, travel expenses, severance pay, and the additional salary required for an interim leader
Take time to find the right replacement for key leadership positions.
It can be easy to worry about how the significant responsibilities that person has shouldered will be handled until a good replacement can be found. It is important, however, that the replacement search be orderly and not rushed. To ensure a careful, deliberate process, include the following elements in your response:
- Have the board and key leaders consider how else the organization is changing or may need to change. Given where the organization is, and where it is headed, what sort of new leadership is required?
- Create a transition committee. This group will be responsible for making sure that the organization continues to function while the leader is being replaced. They will also manage the replacement search.
- Determine whether to designate an interim leader considering the following factors:
- What needs to get done during the transition period that would normally be the departing leader's responsibility? How else might this work get done?
- What responsibilities can board members and other leaders take on temporarily?
- What additional staffing can the organization afford?
- If a staff member is promoted in the interim, will they be able to transition back to their old position smoothly? How would you fill the gaps left by this person leaving his or her current position?
- If the departure of a key player was financially motivated, be sure to work with board members and key donors so that they understand the need for more funding, or reorganization of funding, to increase leadership salaries to competitive levels. This should be done as soon as possible so that a higher salary can be used in the search process to attract better candidates.
- The committee may also want to consider hiring a consultant to assist in the transition process. Consultants can give advice on how best to conduct the replacement search, how duties should be shared in the meantime, how to pick the best interim leader, and more. Consultant fees can be high, but a consultant may choose to donate his or her time or offer a discounted rate to a nonprofit.
Establishing a healthy organizational culture is the best defense against discrimination.
The most important step in preparing a defense against or preventing a lawsuit is for an organization to do everything it can to see that its employees are not discriminated against or harassed in the first place. Consider these essential steps in hiring and managing difficult employees in the workplace.
- Focus the hiring process on the skills required for the post.
- Develop a standardized list of questions that will be asked of all interviewees. Make sure the questions relate directly to the skills and abilities required for the job. For example, if a job requires flexibility in terms of scheduling, do not ask a female applicant if she has small children. Instead, ask if she is available to work overtime or irregular hours.
- Check references thoroughly. Ask the references a list of questions and encourage a conversation rather than simply inquire if someone was “good to work with.”
In managing difficult employees:
- Be proactive and open about discussing problems with performance and behavior. Have straightforward meetings that provide specific details about what needs to improve. Give them a chance to explain themselves, and discuss possible modifications that could help solve the problem.
- Document all problems and related discussions that you have with employees. Should the problems escalate, you will have the backup necessary to take action. All serious concerns about the employee should be put into writing and shared with them.
- After the meeting and documentation, monitor the employee’s performance in relation to the issues discussed. If you see improvement, let the employee know you appreciate it.
- If you do not see improvement after investing reasonable time, coaching and support, schedule another meeting. Warn the employee that they are at risk of being dismissed and be clear about what could trigger a dismissal. Review the discussion from the initial meeting. It is advised to have a third party witness present for this type of warning.
- If behavior/performance does not improve, have a final meeting to inform the individual that he/she is being dismissed. Have detailed documentation available for review to demonstrate that you have taken all appropriate steps and that the process as been fair and transparent. If the decision is set in stone, start off the meeting by informing the individual that they are being let go, that the decision is final, and that you are happy to discuss the reasons for the dismissal but that the decision will not change. This helps set the stage for a productive conversation. Again, ensure a third party is present.
- If appropriate, offer severance pay. This may soften the blow of dismissal and make a lawsuit less likely.
- Assess potential fallout from letting an employee go and address it. For example, in most cases, employees have friends and allies who will become demoralized or angry when they hear the news. Lettign someone go also typically means that other employees have to pick up the slack temporarily left by the vacanchy and this could cause anxiety and tension. People may also wonder if they may be at risk of termination. Be very intentional about how the change is communicated and be mindful that there may be emotional reactions that require attention and care.
Though the majority of employment-related lawsuits involve terminations, lawsuits about harassment are also common. In legal terms, an organization involved in such a lawsuit will need to show that they took “substantial steps to prevent or mitigate such harassment” and that “the employee unreasonably failed to avail him or herself of these measures.”
Click below to open interactivity The employment interview is a vital component in the hiring process.
Your organization should establish firm policies against harassment.
The beginning of any effort to prevent harassment should begin with establishing policies which make it clear that harassment will not be tolerated. Employees should be informed of what constitutes harassment and told that disciplinary actions may be taken if harassment is found to have occurred. The policies should be written down and included in a staff handbook and/or posted in a highly visible location such as a break room. In addition, the policies should be discussed at training sessions and staff meetings on a regular basis. The policies should also include a confidential, private, and accessible complaint procedure of which all employees are regularly made aware. Additionally, the policies should include language ensuring that any accusation of harassment be reported to the executive director or another top manager who will be held responsible by the board for thoroughly investigating the report.
In a case where it is determined that harassment has taken place, the organization can take the following steps.
For the harasser:
- Wage cut
- Oral or written warnings
- Transfer or reassignment
- Training or counseling
For the harassed:
- Removal of any negative evaluations (e.g., on performance) that may have resulted from the harassment
- Apology by the harasser
- Restoring any leave time that was taken as a result of the harassment
- Monitoring to make sure no retaliatory actions are taken by the harasser or other employees
- Compensation for any financial losses
Taking these steps will minimize the likelihood that a claim will be filed and may serve as the basis for a defense. But most importantly, these steps will help create a safe and comfortable workplace.
When in litigation, limit discussion about the case.
Getting sued is an upsetting experience. A very human and understandable reaction is to talk to staff or volunteers in the office about the situation. However, leaders should avoid doing this. It is not uncommon for employees or volunteers to inadvertently or otherwise end up giving information that can later hurt the organization in court. Discussion and gossip about the situation should be strongly discouraged.
When an organization receives notice that a claim has been filed against them, they should immediately inform their attorney and begin preparing a defense. In the crisis communication plan, a clear, concise statement should be developed to be used in the event of a lawsuit. Consult an attorney to help craft this statement. Ensure the statement clearly states that matters pertaining to the lawsut cannot be discussed while the case is under litigation. The staff and volunteers should be told clearly to direct any media inquiries to the official spokesperson.
Your organization will want to inform key stakeholders of the events.
Before deciding who to tell, and how much to tell them, talk to your attorney and get his or her advice. People who may need to be informed could include the board, staff, key volunteers, and donors. Volunteers and donors will most likely need to be informed if any publicity could potentially arise from the lawsuit. It is better for these individuals to hear of the situation from an official source in your organization than through a news report. A statement to these stakeholders should express concern and compassion for anyone who has been injured, without admitting liability, and it should reaffirm a commitment to the organization's mission.
If the person who has filed the lawsuit is someone with whom your nonprofit hopes to continue to have a relationship, do not take punitive actions against them. For example, if you are being sued by a client who regularly uses your services, continue to provide those services. If the plaintiff is a current employee, make every effort not to treat them adversely. Burning bridges will not help your case, and will only create more negative feelings.
Preparing for crisis can help improve the overall health of your organization.
Developing a crisis management plan will help you take the necessary steps towards preparedness. While many of the steps included in the crisis management plan are useful for coping with disaster, others are good practices even under normal circumstances for promoting the overall health of your organization. Being fiscally responsible, establishing strong communication policies, protecting employees and volunteers, and creating an efficient managerial structure are all excellent policies, even when sailing smooth waters.
Use these additional resources to help you manage a crisis within your organization.
Nonprofit Finance Fund
The Nonprofit Finance Fund provides advice and consulting on financial management for nonprofit organizations.
Nonprofit Risk Management Center
The Nonprofit Risk Management Center is a nonprofit organization that offers other nonprofits online risk management resources in the areas of volunteer risk management, financial risk management, employment practices, and youth protection.