Every executive must do it. We consultants must encourage all of them to do it at the appropriate time.

When an executive makes the SOS appeal, they need to split their attention. Ensuring the appeal works is now a half time job. Creating a strategy that changes the future is the other half of the job. Delegate the rest of the executive responsibilities to subordinates.

In the six weeks to three months that follow the launch of the appeal, operations is less important than it ever was. If the appeal fails, the operational mess that someone else makes is unimportant. When the appeal succeeds and the new strategy is ready, the operational plan will change. Again, the mess is unimportant. Besides any caretaker can maintain a garden for six weeks to three months.

The new strategy must create a structural break within the organization. Failure to create the structural break will result in making another SOS appeal in the near term.

An SOS appeal is an attempt to sell a boat with a hole in it. It damages the reputation of the nonprofit. How much damage is done and how long the damage lasts depends on the strategy.

If the strategy makes sense to the donors, they will see the appeal and crisis as a learning experience. The damage will be short lived, if at all. If they lack faith in the strategy, the damage will last as long as the doubt exists. If they are never told about the strategy, they will never develop an opinion. That means they will be waiting to see tangible results. It takes a long time to create tangible results (Filling the bank with money is not a tangible result to anyone other than the CFO. Demonstrating that the new course is producing different results is tangible but time consuming.). The damage will be long lasting.

Up to this moment, there seems to be another part missing from the discussion. The board has a role to play. It is a multipart role.

As the group responsible for oversight, one expects the board to have far vision. While the executive is in the process of managing the SOS appeal, the board should be looking into the future. What is the next crisis? This is the worst possible time for a second crisis to arise unexpected.

This crisis was unexpected. Calling it an SOS appeal emphasizes the unexpected nature. Does the board dare allow another surprise to happen?

The executive is too busy to look for the next risk. The board must step up, use its expertise and wisdom, and sound the alert if another threat arises.

The board must also support, encourage, and participate in the strategy development. It is a big job in a short time period. The board needs to be actively engaged and doing all it can to facilitate the process. In addition, anything that can be done to shorten the strategy development process will help to restore the confidence of the donors and change the course of the organization. Changing the course will shorten the time needed to end the crisis.

At the end of the appeal campaign, the board must begin the process of determining how the problem occurred. Why did the board underestimate the importance of X and fail to realize that Y and Z would follow? What new policies will it write to prevent future surprises? This must be a learning experience and never blame assessment.

The board must avoid asking questions during the crisis. Questions that are typical and tempting are, “Who did what, when, and why?” Those questions are a distraction from the immediate needs, cause people to take defensive positions, and slow the process at a time when speed is of the essence.

After the crisis, let the executive do the analysis. With a clear head and without the pressure of the crisis everyone can analyze the executive’s findings.

The board must stay out of the daily operation. The distraction of trying to understand, come up to speed, and run the operations will be harmful. It is much more important to have the board focused on the preceding. The iceberg has been hit. Rearranging the deck chairs is meaningless. Stay back on the shore and analyze the navigational systems.

If the executive needs assistance there are experts available who specialize in turnarounds. Let the executive call in the experts. It is rare for a board member to have the experience to qualify as an expert. Managing a turnaround is a full time activity. Who on the board has the time and the expertise? Trust the executive to know what help is needed.

In short, the board must engage in the process at the appropriate level but becoming subsumed by the crisis is a mistake. If the board becomes subsumed, the crisis becomes deeper and harder to turn around. The potential for another ugly surprise increases.

At Mission Enablers our primary focus is helping nonprofits of all types who are experiencing difficulties. We help clients restore vitality, develop sustainable practices, and build their capacity to serve. The majority of our work is with parochial schools whose enrollment is declining and are facing significant financial challenges.

A leader like Adi needs to step up and re-invent his organization value proposition and business model, who is his target market? the 33 dollars donors? why not go after 3 million dollars strategic donors? how can do that?

Ephy Torenberg
http://www.donorfirst,org

Best,

Ami

But I couldn’t help thinking that there are no fewer than 54 different online philanthropy, volunteering, and social investment platforms (see note below). They are built on the same premise as Idealist: let’s use the Internet to match resources and needs.

Each of these websites has huge potential. For some (like Idealist) that potential has been realized, at least in part. But I’m not sure the sector can support so many different platforms. By having so many, we thinly spread our limited resources (money and users) across many platforms — forcing everyone to struggle.

I think the time has come for us to discuss how to transform this (extraordinary!) decentralized innovation into an open, coherent & sustainable system that can serve our shared needs over the long run.

Jacob Harold
Hewlett Foundation

See research on this topic (which the Hewlett Foundation supported) at: http://philanthropy.blogspot.com/2009/12/new-research-on-online-giving.html

Thanks so much for this. First a couple of updates. In the week since we put up the counter that Rich referred to, another 1,500 people have given close to $50,000 more, and money aside, it’s been incredibly moving to see and feel this wave of support. Also, to give people who didn’t get the original email some more background on this, we added this page: http://www.idealist.org/appeal

Regarding Nell’s points, as I commented on her blog, I agree that a) this was a one-time thing for us; and b) that the onus will be on us to turn things around. But looking back now, I still think this was the right decision for us.

Thanks again!

Ami