COVID-19 Pandemic Calls for Reimagined Social Pacts by Nonprofits

Author: Jim Rice

The boards and executive leadership of nonprofits need a new pact between the missions and financial plans of our third sector organizations and their local, state and federal policy makers, especially as we struggle to come out on the other side of the COVID-19 crisis. If the COVID-19 pandemic has taught us anything about risk, it is that we may be highly interdependent, and insurance is not the panacea for this type of risk. Rather we need to leverage our connectedness and come out the other side of this crisis with risk management and re-imagined ‘systems’ as the antecedents and drivers of sustainability.

Third-sector organizations crucial to COVID-19 recovery

America’s 1.3 million charitable nonprofits feed, heal, shelter, educate, inspire, enlighten, and nurture people of every age, gender, race, and socioeconomic status, from coast to coast, border to border, and beyond. They foster civic engagement and leadership, drive economic growth, and strengthen the fabric of our communities.

In the U.S., we often depend on the 12.3 million nonprofit employees, more than 64 million board nonprofit members and volunteers, and tens of millions of donors for our social cohesion and stability. The fabric of this safety net is critically frayed and may be threatened by the COVID-19 crisis. Conversations with board leaders and social services researchers in North America, the UK, and South Africa all acknowledge how the COVID-19 pandemic is devastating nonprofit organizations in the third sector. The effects of coronavirus on the charity sector will be most obvious in three closely related areas:

1. Demand for service, which is up substantially
2. A workforce that is frustrated and morale is low
3. Financial viability, with revenues down by over half and donor fatigue at record highs

This trend is particularly troubling as these nonprofit organizations are oftentimes our societies’ frontline support for large segments of our communities, who may be struggling to deal with a loss of income, jobs, housing, and hope. There is an urgent need for the boards of these crucial nonprofit organizations to explore new strategic risk mitigation and business plans related to a new social pact with their communities and leaders in the first and second sectors of government and commercial enterprises.

Nonprofit board leaders need to organize a strategy session within their organization, and then out in the region, to reimagine coordination and connections between the different layers of government, private and civic sectors to more tightly bind federalism and localism. Conference calls with governors and daily White House briefings are not enough—we need more local grass roots community and institutional responses.

Five nonprofit initiatives to consider

1. Re-visit candid audit: Engage the nonprofit board and c-suite team to conduct a fast assessment of the multiple risks to mission accomplishment in at least these areas:
   
   
   • Financial health, auditor meeting, and polling of service payers and donors
   • Staff wellbeing, morale, and fears about recovery and return to the workplace after COVID-19
   • Ways to reduce or delay costs for rent, utilities, insurance premiums, and supply chain partners.
     
     Document the gaps, but also ask all for ideas on how to strengthen your nonprofit organization’s financial wellbeing.
     
     
2. Re-frame stakeholder engagement: Form, support, and listen carefully to interdisciplinary and inter-departmental SWAT groups. Have them work for 10 days to define practical and actionable initiatives of high impact to your mission-crucial programming for nonprofit service re-activation or expansion, staff and volunteer engagement, and fiscal viability. Engagement will not only yield better ideas, but ideas that they own and are more likely to want to help implement.
3. Re-vitalize community leadership networks: Develop a directory of local organizations and community development bodies you work with now, and explore how you can broaden their membership and collaboration for enhanced vitality and impact. Borrow ideas and plans from credible sources to enhance engagement.
4. Rejuvenate beneficiary ownership: Reach out in new and more sustained ways to engage with and listen to the needs of your beneficiaries. Convene focus groups, invite in beneficiaries to the next nonprofit board meeting, and form advisory councils on the most challenging risks and gaps in organizational wellbeing and service performance.
5. Re-formulate alliance agreements: Consider how quickly you can organize a group for a half day to explore how best to define a community collaborative alliance agreement/pact signed by each of the governing body chairpersons. This agreement should include three commitments:
   1. Affirm the value and scope of needs among the nonprofit organizations to rebuild their vitality in service to the broad community, wellbeing goals and collective impact action plan
   2. Establish a jointly governed shared services pool to economize nonprofit staff support, supplies, insurance and fundraising.
   3. Establish an expanded joint community leadership academy focused on developing community-wide governance leaders (beyond the usual executive leader) with common language, skills, and strategies. Many examples of such educational academies not only build competencies for collaborative governance, but also nurture networks across sectors for future support of key third-sector organizations.

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