Periods of disruption occur with regularity throughout recent history. These disruptions can cause severe stress for nonprofit organizations. Examples include the Financial Crisis of 2008/2009 and the COVID-19 pandemic.  

Major events can create significant challenges in several areas:

• Fundraising: Competition for funds can increase when economic disruptions occur.  Companies and foundations can restrict their giving when investments are performing poorly.
• Human Resources: Stress outside the workplace can undermine staff cohesion.  Available resources may be limited by other factors. 
• Service Demands: In times of disruption many social service demands increase, which creates further challenges toward fulfilling the organizational mission.

Being adequately prepared when these events occur can be the difference between surviving and thriving. The framework to create the tools to succeed during disruption are grouped into three “imperatives”: preparation, action, and recovery.

Preparation

• Operating budget with positive bottom line that includes emergency savings line item.
• Build savings to reach 180 days of operating expenses.
• Negotiate all contracts to include escape clauses with manageable break fees.
• Rigorously adhere to budget, making expense decisions to match any revenue shortfalls.
• Develop an emergency budget framework based on a 50% loss of revenue. Identify specific expenses that would be cut.
• Construct an human resource structure for running organization during crisis. Create Board crisis team with assigned members.
• Run “tabletop” exercises to validate plans.
• Invest in human resources. Develop learning programs and cross-training plans.
• Develop technology infrastructure plans to keep IT resources secure and current.
• Seek out funds to support these initiatives.
• Work to find collaboration partners to ease these demands.

Action

• At the start of the disruption assess emergency plan immediately and begin appropriate actions.  
• Track performance relentlessly, and manage to emergency budget.
• Begin assessment across the served market. What organizations are prospering?  What services are seeing increasing needs?
• Find collaboration partners to provide additional funding, more productive service delivery.

Recovery

• What new clients could be served by our key products and services? What additional products and services could we develop to address the needs of a transformed landscape?  
• Revisit our mission and values to determine whether these foundational principals continue to meet the needs of the community.
• Close the circle by reviewing all the disaster planning activities to assess their success. Update plans and procedures, reevaluate staffing status and needs.  
• Reposition organization for the next disruptive event. Look to consolidation opportunities with other organizations.  
• Share best practices, especially among those less well prepared.

Using these principles, and revisiting after each and every disruption, will make the nonprofit more robust and resilient in the face of any challenges. Flexibility is a key factor as well, as each crisis is of its own unique design.

Tom Ording is a 2023 graduate of the Masters of Nonprofit Leadership and Management program at Arizona State University and serves as Senior Vice President of Business Operations for Amano Pioneer Eclipse Corporation.  Tom has mechanical/electrical engineering degree and over 30 years of operations and supply chain experience. Tom began his career in automotive and then spent 18 formative years at General Electric Corp. He also has employment experience in the healthcare and education sectors. Tom’s current responsibilities include manufacturing, lean, quality, IT, sourcing, transportation and logistics, customer service, and human resources, in addition to leading corporate benefits and insurance efforts. Tom has served on several Arts related boards, and has volunteered at a number of social service nonprofits. Tom currently resides in Louisville, Kentucky, but works in Sparta, North Carolina.

Image by Lillian Finley

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