Facing the Financial Crisis – BoardSource Excerpt

According to Barry Gaberman, Board Chair of BoardSource, getting out of bed, turning on the television, reading the newspaper, going to the local coffee shop…all forms of communication tell us that our economy is in turmoil. Tax-exempt organizations look to their senior leadership to provide vision during recessionary times.

According to Gaberman, the following represent board recommendations, addressing the crisis:

1. Don’t panic – remain calm and collected.
2. Strategize – examine and re-examine the organization’s goals and objectives
3. Open your eyes – evaluate financial assets/resources
4. Be creative and plan an alternative (a contingency budget; potential merger or acquisition if needed)
5. Work closely, communicating frequently with CEO or ED
6. Ask for more (from management and from the community)
7. Go on a diet (reduce expenses – especially administrative discretionary expenses)
8. Meet the test; be constructive partners with management holding the organization accountable
9. Evaluate compensation and effects of negative publicity
10. Guard the organization’s mission. Don’t forget the why.

According to Goldman, “no one has a crystal ball. The economy may only dip, then recover quickly, or we may be headed into a prolonged recession. While we all hope for the former, boards that prepare for the worst – strategically, financially, and operationally – will be in the best position to fulfill their mission now and when recovery does occur.”

Can your organization whether this crisis? Post comments on other solutions or thoughts.

For further information, see BoardSource’s November/December 2008 Magazine, or www.boardsource.org.