Standing Beside Alaska's Non-Profits

How to Bare Bad News

From time to time most nonprofits face a situation that requires communicating unfortunate news. Various issues such as a loss of funding, an employee dispute, or some problem within a program or service are likely culprits. Regardless, preparing for such occurrences is a good idea. If you’re not prepared, a spontaneous response when something bad happens may exaggerate the problem.

This article is not intended as a guide for crisis communication – it’s designed for the board and CEO to ponder how to tell others about issues that we would often prefer to keep to ourselves.

If you have bad news to deliver, we have resources at Foraker to assist in developing effective messages. Suzanne Lagoni and Joan McCoy have been with Foraker since the beginning – they were part of our founding team. Prior to working as consultants at Foraker, they were in communications in the oil industry (ARCO) and continue to provide crisis communication advice to numerous for-profit clients in addition to working with nonprofits through us. We suggest that if you face a crisis, call Foraker, or some trusted resource, to assist with specific communications.

This article will hopefully provide leaders with ideas for what can help, from the point of view of a nonprofit exec, not a communications professional.

Some strategic guidelines for communicating bad news include:

  • Develop a crisis communication plan. Such a plan includes identifying at least two spokespersons who are prepared to address the public. Typically the CEO is one spokesperson and the other is often a board member. When a situation arises, they should determine who is the best suited to address the specific issue. For example, if the crisis involves a problem related to staffing, especially the exec, a board member may be seen as a more credible spokesperson, with less conflict. But if the crisis concerns a loss of funding or an issue related to a program, the CEO might have more specific information, therefore will be better able to respond to questions. The plan should also include the type of communication tools to use and with whom each is warranted. For example, whether to call the media with a preemptive press release, or wait for the media to call? Also, outline how and where to communicate with internal constituents. Thinking through these logistics does not guarantee a smooth process, but it can help to focus actions during a time that can overload even the most prepared organization.
  • Always tell the truth. But it is good to remember that explaining too much about the situation can often create a bigger problem than saying nothing at all. Maintain a balance between transparency and honesty. Since starting these articles, I have only published one article twice. It was called, “Keep it Short.” The gist was how my first nonprofit mentor encouraged me to make my point, “then shut up.” In his experience, he found it better to provide a truthful, but short message, then wait for the audience to ask questions about what else the people want to know, not what I wanted to tell them. His sage advice was that when we try to explain everything, we run the risk of confusing our message or boring our audience. If we want people to hear what we need them to hear, brevity is the best strategy.
  • Speak to the needs of your audience, not your needs. The last best advice from that mentor that applies to this type of communication was not to dwell on what the organization needs. It is always better to address the needs of constituents – how our mission, not our administration, is impacted. He understood that no one really cares if we lay off employees, need more funding or even if we go out of business – they are more likely to care if the people we serve are affected and how. Another approach most people appreciate is for leaders to acknowledge a problem, but rather than blaming others or crying wolf, they express confidence and determination to make the situation right. Be sure to communicate that even when having difficulty, the organization will do all it can to persevere. As nonprofit leaders, it is a better tactic to inspire confidence while at the same time not appearing overly confident or arrogant.

Anyone who stays in hotels sees the sign in the bathroom that requests guests to hang towels and re-use them to save the environment. Most of those hotels care less about saving the environment than saving a buck. But they ask their customers in a more effective way to help them reduce costs. There is a lesson here about how nonprofits should communicate their needs – it’s mission and values, not administration.

In our sector a couple of crises are common. The first is when we have a problem with one of our programs or services. A good example of what to do in that situation involved a well known youth organization that found one of their employees was downloading inappropriate and possibly illegal content on a work computer. The police were notified. In this situation, the nonprofit did everything right. They made sure their clients were safe, stayed in contact with law enforcement, and developed a succinct message for both their internal and external audiences. Their internal constituents, the board and staff, were notified first so they understood what happened, what would be done to address the problem, as well as who would be responsible for the external response. The communication included a clear message of how each of them was to respond if questioned. Next they notified their significant funders and partners. Finally they developed a press release and were prepared for the inevitable call from the news media.

Obviously, they were horrified on a number of levels. It was apparent that their first priority was the children in their care. Then, they knew they must inform internally before their board or staff heard rumors on the street. And I think it was also a great tactic that they notified their funders and service partners as soon as possible. Their message was truthful, appropriately humble, yet done in a way that expressed the best possible message, which in summary was, “We have a problem. We are on top of the problem. We will do everything possible to resolve the problem as quickly as possible. We will learn from this situation and work to avoid such problems in the future. And, if you need more information, this is who to call.”

Another crisis many nonprofits face is a loss of funding, especially recently because of federal austerity. Instead of an example of what a nonprofit did that was good, this is an example of what not to do. Recently a nonprofit that had been overly dependent on one funding source lost that funding. The first thing they did was to attack that funder, in this case not the government but a corporation. Their strategy was to try to garner public support, put pressure on the funder to change its mind, and restore funding. As far-fetched as this may sound, during my 21 years in the United Way system this was the dominant approach used by organizations that had their United Way funding reduced. The problem with this strategy is that rarely if ever did such pressure change the outcome. And in the case of United Way, those organizations seemed to not understand that many of their current and potential corporate and individual donors were also supporters of United Way. So as a result, their pressure tactic backfired and damaged their relationship with those donors. Donors do not owe nonprofits anything. They are our customer, we are not theirs. Just think how you would feel if Nordstrom were to blame you for not buying enough so they had to lay off employees. Who cares? They continue to meet our needs even if we decide not to make a purchase. The best approach with any funder or donor is to meet their need. In most cases they need appreciation and appropriate recognition for what they did and then ongoing communication on how their funding was used in a way that met their expectations. Finally they need acceptance about their decision on how much and for how long they choose to provide funding.

In my opinion we should never communicate a need for emergency funding, unless there is a real emergency. At Foraker we call these scare tactic requests, a “fire sale.” An emergency is a natural disaster, a crisis for our clients, a situation that is totally out of our control and, most important, something that others may find compelling. When a nonprofit loses funding, even when unexpected, it is the problem of the board and staff, not the donors. When a nonprofit needs more of anything, try to communicate how much will continue to happen with what is left, and not focus on what was lost. Donors become more responsive the more they see a nonprofit accomplish as much as possible with whatever it has. It’s obvious that when an organization has more, it can do more. Make sure donors know what you do, then when the time is right, let them know how they can help the organization do more. If a nonprofit has practiced the basic principles of fund development, such situations will arise.

In closing, when you have bad news and must share it with the public, always stay as positive as possible. Recently an organization had such a situation. They started their not-so-good news story with their mission, values, and vision, and then briefly described their bad news in the least panicky way possible. Following that, they quickly moved toward how it was addressed and where they were headed. As a reader, I was actually inspired and did not feel they were out of control or in crisis – they appeared as confident, not cocky. Unless someone knew the back-story, no one would have seen their news as uncomfortable.

Remember: “We have a problem. We are on top of the problem. We will do everything possible to resolve the problem as quickly as possible. We will learn from this situation and work to avoid such problems in the future. And, if you need more information, this is who to call.”