What Does Your Board Do When the Worst Day Shows Up?

9 hours ago

6 min read

Nobody wants to talk about the worst day. Your board has to.

Nobody joins a nonprofit board hoping for a crisis. You join because you believe in the mission, you like the people, and somebody asked nicely.

But the worst day shows up eventually. A funder pulls out. An executive director leaves in a hurry. And then you find out whether your board talked about it in advance or whether you’re inventing a plan at 9 p.m. on a Thursday with eleven people on a video call and one of them muted.

A diverse group of community leaders sitting around a table planning for a potential crisis — Leading Emergency and Crisis Preparedness

I spent fifteen years at Homes First and I sit on a variety of local, state and national boards, so I’ve seen this from both chairs.

In 2025, Homes First had a year I wouldn’t wish on anyone. A fire at one property, a flood at another, and a tree through the roof of a third. Four units went uninhabitable, which meant no rent coming in, and the insurance claims dragged on for months. Our reserves were gone. Then the insurance bill landed. Our annual premium went from $65,000 to $135,000, and our deductible per incident jumped from $5,000 to $25,000.

Think about that last number. If a pipe bursts, we need $25,000 on hand before insurance pays a dime. We housed0- almost 300 people.

So we launched Rise & Rebuild, with a $500,000 reserve goal and an emergency ask of $250,000 in 60 days. Between that campaign and our Heroes for Housing breakfast, we raised nearly $250,000. Seven people still lost their homes. Out of almost 300 that isn’t terrible, and it’s still seven.

The first thing I did was meet with the two board members who are communications experts, so we could start building a communication plan. Everyone from staff to funders was going to hear this news, and I wanted them to hear it from us, in the right order, in words we had chosen on purpose.

Next, with the board’s participation, I brought together a group of local experts to develop a plan to get us out of this situation. I didn’t try to figure it out alone, and I didn’t ask the board to rubber-stamp something finished. Everybody was in the room.

Here’s the part nobody tells you. Reserves aren’t only a safety net. We had access to over $4 million in state and county contract funds, but those contracts reimburse after the fact. You spend first, then wait 30 to 90 days. No cushion, no access to the money.

So who owns the reserve policy? The board. It’s about the organization’s survival, and that’s different from running it day to day.

Staff run the programs. They know what a month of payroll costs, where the cash crunches hit, and which funding streams are shaky. They should absolutely inform the policy. But a reserve policy answers questions staff aren’t positioned to answer.

It’s a fiduciary decision. Boards hold the duties of care and loyalty, and deciding how much unrestricted money to hold back is a direct expression of those duties. Staff can’t hold themselves accountable for their own safety net.

There’s also a conflict of interest nobody names. Staff want to spend money on programs and people. That’s what they’re there for. A reserve says “not yet,” and the board can say that without a personal stake in the next budget line.

Then there’s risk tolerance. Three months of operating expenses, or six? Does that change if most of your revenue comes from one government contract? That’s a judgment about the mission’s long-term survival, and it belongs to the people who are ultimately answerable for it.

The part that matters most is who can authorize a withdrawal and under what conditions. If the executive director can tap reserves alone, you have a slush fund. If it takes board approval, you have a reserve. A board-adopted policy also outlives any one staff team, and it spares the next ED from improvising in a crisis.

The split that works: staff draft and recommend, using real numbers and cash flow patterns. The board debates, adopts, and monitors. Staff execute inside the guardrails and report back. Treat it as a staff matter and you get either no policy or one that quietly bends the moment money gets tight, which is exactly when you need it to hold.

Then there was the Nonprofit Association of Washington. The CEO decided, for personal reasons, to move on. No scandal. No drama. A person made a human decision about their own life, and the board still had a seat to fill. I was board chair, so leading the search and finding an interim landed on me. We made it work. Found an amazing interim and put together a hiring committee comprised of board leaders and members of the association.

Two different organizations. Two very different kinds of bad timing. Same lesson. Nobody had time to start from scratch.

Why is this on the board’s plate?

Because the law says so. Washington’s attorney general puts out a quick guide for board service, and it describes the duty of care as the care an ordinarily prudent person would exercise in a like position and under similar circumstances. The same guide says Washington courts have held that these duties carry the highest standard of integrity.

An ordinarily prudent person doesn’t wait for the building to catch fire before asking where the exits are.

What does a crisis plan actually do?

It saves you time when you have none. With a comprehensive crisis management plan (including crisis communication!), board members can move to decision-making much faster than if they had to start from zero. That’s the whole pitch. Nobody’s asking for a binder the size of a phone book.

Staff can draft it. Fine. But trustees’ active participation in the plan’s development is nonnegotiable, and I agree with that completely. If the board has never read the plan, it isn’t the board’s plan.

It also needs to stay alive. Staff turn over. Funding shifts. Insurance costs double. A plan from 2019 is a historical document.

Where does the board stop and the staff start?

This is the one that trips people up. In a crisis, boards either freeze or start managing everything. Neither helps.

One governance guide says it plainly: define in advance which decisions remain at the board level and which belong to staff leadership. Do that on a calm Tuesday, not in the middle of the mess.

There is one situation where the board has no choice about stepping in. When an executive director leaves, whether by choice or not, it’s the board that has to keep management and leadership going. If you’ve never talked about what that looks like, start there.

Who talks to the press?

Probably not the board member who has never been on camera. Possibly not you.

Melanie Herman at the Nonprofit Risk Management Center told the Chronicle of Philanthropy about a client who did media training for board members during a retreat, using mock interviews on camera. I love this. Awkward? Absolutely. Also far better than finding out how you sound at 6 p.m. when a reporter calls.

Pick spokespersons now. Decide who says nothing. Write it down.

Where should we start?

My resource on this lays out four essential things your board should know about its role in times of crisis. It’s free, and it’s built to get a board talking before it has to.

Get the free Board Source resource here: https://hubs.ly/Q04D_Hjb0

Put it on your next agenda. Fifteen minutes. Contact me for guidance on crisis communication and crisis planning.