Perhaps the least-appreciated aspect of nonprofit boards is their role as a safety net. Even boards that don’t seem to be doing much, or that may even have contributed to deep problems, rise up and do heroic work to fix things. Here is a First Person Nonprofit story from a board chair about such a breakthrough — how an organization walked to the precipice of bankruptcy and then walked away.
Tom Silno, long-time board member of Big Brothers Big Sisters of the East Bay:
“Three years ago our financial troubles started when we lost our executive director. Then we made a couple of false steps in hiring a replacement. At one point we were down in the ashes with one staffperson and a lot of debt. Our budget had gone from $700,000 to $75,000. Now we’re back to seven staff and a budget of $400,000, all our liabilities cleaned up, cash in the bank, a great new executive director, and more and more kids in the program every day.
“When we were close to broke we made the decision NOT to hire a new ED because we didn’t want any obstacles to a possible merger that we were exploring, and to save the cash. We all agreed that keeping the program staff was the most important thing, and board members took on management tasks. Sometimes we were meeting once a week! We lost a number of board members — they didn’t want to come to meetings where it was always bad news being discussed and we were faced with dealing with immediate needs instead of strategic planning. We voted to have everyone’s board terms end on June 30 and required each person to proactively choose to re-join the board. A couple of times we had to loan money to the organization to make payroll.
“After several months we realized a merger wasn’t going to happen. We reversed strategy: we turned our attention to hiring a new leader, and creating an organization that could attract such a leader and make him or her able to succeed. At this point instead of keeping the program staff, we let all the program staff go and kept only the fundraiser. We contracted with another nonprofit to manage our volunteer-based programs as an interim measure. We put a government grant on hold.
“All this time we were holding our bowling tournament, our big annual dinner, monitoring cash on a daily basis. Our landlord allowed us to cancel our lease and even gave us free space in the building — it was like a big closet, had no windows, and no air at first — but it was free. We talked about closing down, and set some guidelines, such as “If we haven’t raised X dollars by X date,” we would consider bankruptcy. It was hard to raise money but we tried to keep focus on our optimistic view of the future. We monitored towards those guidelines and they were motivating.
“What kept me going? I was a Big Brother for a Little Brother from when he was 7 years old ‘til he was 18; today he is 31 and we still keep in touch. I was a Big Brother for another boy for two years until he moved away. I’ve seen so much of the program firsthand-such as seeing the ‘Bigs’ and ‘Littles’ together. I know what this program does. We can’t let this program go away. I’m sold for life.
“We (on the board) wouldn’t-couldn’t-go through this process again. But seeing it successful — we all have a big sense of pride in how everybody stepped up to the plate-not just on the board, but volunteers and community people and businesses. We now have five new great board members ready to take on leadership, and an executive director who is truly leading the organization to new heights and reconnecting with our community leaders and volunteers. My wife understood how important this program is to me and she never complained about all the evenings and weekends I spent doing board work — now I have more time to spend with her and our own kids again!”
Epilogue three years later:
“After the endless string of meetings, and always keeping in mind what would be best for the kids we serve, we finally made the decision to merge three BBBS agencies together. Looking back over the period of time described in this article, I am still full of pride of what got accomplished. The first few years of the newly formed agency had its challenges, but the dedication of the board and the staff never faltered. The primary accomplishment of more kids being served could not have been done without the work we did then.”
Our thanks to Tom for sharing this heartbreaking and heartwarming story. If this had been a business, it probably would have closed. But the board stepped up and saved the organization’s services for hundreds of young people hungry for a stable, nurturing relationship with an adult. All of us owe Tom — and the millions of board members nationwide — our thanks.
See also in Blue Avocado:
As an ED, I really admire a board that hangs in there when things get really tough, but I wonder what the back story is. “Our financial troubles started when we lost our executive director.” What happened? Was the ED fired? Did the organization lack resiliency to deal with the turnover at the top? Did the ED walk away abruptly? “At this point instead of keeping the program staff, we let all the program staff go and kept only the fundraiser.” Wow! All the program staff? What heartache, resentment and chaos that must have caused. Perhaps it was necessary at that point, but could it have been avoided? I’m glad the organization survived, and I’m touched by Tom’s passion for the mission, but I wonder if there are other lessons to be learned here.
A lot of the events cited here are great reasons for making sure your board is protected by Directors and Officers’ Liability. (Yes, my company sells insurance.) And I realize that budget is a concern. But for all the time, missed meals and gas money spent to help your board, knowing that you are protected by an insurance policy is minimum compensation.
I hope the Board and E.D. of the non-profit that I worked at before I got laid off reads this article, takes heed and faces the decisions they need to make head on. The "death spiral" any organization faces is hard enough without the decisiveness needed and exhibited by this board. Congratulations for making it through the crisis faced by your organization successfully preserving the programs and those they serve.
This is a great example of the critical role of a board of directors when the members embrace the mission of the organization and focus on what’s most important. What I see mostly is that this group focused their energies on straightforward strategies and set small measurable goals. They held themselves accountable on all fronts, even when their strategy didn’t work the way they anticipated. I think that other groups would have been discouraged and quite possible given up in the face of defeat, but this group had bought into the organization’s mission so completely that they simply changed tracks in order to keep moving forward. What a terrific example of discipline and commitment for all boards.
I, too, would like to know what finally turned things around. There does seem to be a time period missing and I’m wondering if our organization is sitting in this "twilight zone" of missing time. Was there a turning point? Was it simply a matter of sticking it out over time? Was it the new ED? How did they ensure the long term financial success of the organization?
I appreciate the stories but what can a mere member or several members do when a board is director driven and won’t make the tough decisions? You see the organization facing bankruptcy/and or closing the organization which has existed for nearly 50 years and feel helpless. Do you stand by and watch the organization close and then try to rebuild?.
The organization I work for is going through an intensely similar journey. We have despaired, we have been angry, we have been hopeful and we continue to slog through. Our board and it’s current leadership, along with a new President, are making strides and the staff and members of the organization are beginning to show hope and the creativity that is a product of a new future. I can relate to the angst and indicision – how do you make a tough decision when choosing the wrong direction can lead to heartbreak? It turns out, you can come back from those decisions. What is important is having the courage to make them.
Inspiring story, but I have difficulty in identifying the turn-around strategy. Was it laying off program staff and board resigning and re-upping with greater commitment, was it setting guidelines, or was it the focused optimism of the board, and if so, how was that instilled? It seems there is something missing that was the key to the turn-around or maybe it was just the combination of all of the above.
I really like your comment, Robert, because it’s too easy too often to refrain from scrutiny of inspiring stories. Actually what I liked about this story is that the board members didn’t just work incredibly hard — lots of boards do that. I liked the decision-making ability of this board: first to hang on to program staff and raise money themselves, and then to switch to laying off the program staff (and contracting with another nonprofit to keep their programs going) and investing in fundraising staff. Boards (like all groups) have a hard time being decisive . . . this one was not only decisive, but they made decisions that were both responsive to the changing situation AND were strategically oriented (such as staying in a holding pattern for a merger but then moving forward when that fell through). Thanks again for enriching this discussion. Jan
I agree with Jan – what resonates for me is seeing the organisation going downhill and screaming at the board to take the necessary measures. What is worse for me is that I have knowledge that most of our members don’t, and can see the downward spiral happening, but our membership is carrying on as if no changes are needed. The ability to recognise the situation and design your way out of it, and adapt to changing circumstances, is what marks this story out (as it marks out dramatic turn-arounds in the corporate work, such as Apple’s, IBM’s or GE’s).
As a Board member of a nearby BBBS agency I find this story inspiring. I believe our Board could – and would – do the same if they had to.
As a former staff member at another BBBS agency who fired a CEO (good decision) but took much took long to embrace the role of hiring a new CEO (and placed an interim who did NOTHING to assist with programs/fundraising or other real work), I observed a debilitating and unnecessary loss of staff and program momentum.
A board’s role in firing/hiring the ED/CEO is one they rarely feel equipped for, but it is one of the most important responsibilities. Watching qualified and committed staff leave caused such a loss of valuable relationships with volunteers/littles/funders and community members — a loss that will take years to build.