10 Steps for a Kick-Ass Emergency Succession Plan

Most people who know me know that I have only one pair of shoes and one belt.  They are both made of vegan fake leather and look crappy. That’s because I got married and thus no longer have any incentives to look attractive. Plus, we Executive Directors of small nonprofits must project the aura of scrappiness and frugality.

One morning, though, I had an important meeting and could not find my belt. I spent thirty minutes looking for it, getting more and more frantic. With no time to run out and buy a new belt, I went about my day with a dress shirt tucked into my beltless pants like an animal. An animal!

What’s the point of this story? The ED or CEO of a nonprofit is kind of like a beat-up leathery old belt that holds up the pants of the organization. And like in my wardrobe, there is only one. Life is unpredictable, oftentimes cruel, and yet filled with unimaginable beauty. But usually it’s just cruel. Who the heck knows what could happen? (Which is why I wrote this letter to my newborn son in case I died early, with important life lessons like “be nice to people” and “recycle”). In the terrible worst-case scenario, the ED could get into a tragic accident and die or otherwise become incapacitated. In the best scenario, he could be offered his dream job of starring in a vegan culinary travel show where he eats and drinks his way around the globe. In either of these scenarios, or a variety of other stuff that could happen, the organization is now left without a leader.

That is why it is so important for all organizations to have ESP (Emergency Succession Plan). Now, there are all sorts of ways to go about developing this plan. For the ESP, though, it is more important to have a decent plan right away than a perfect plan that could take a while to create. Which is why I jot down these helpful tips. Follow them and in no time your organization will have a workable plan, just in case the Food Network calls your ED:

Step 1: Emergency succession planning is really the board’s responsibility, so add this to your next board meeting agenda. Seriously, if you don’t have an ESP in place, put this on your agenda. Assign the task to a board member to lead, preferably someone who has HR experience and understanding of the staffing structure.

Step 2. With the assigned board member in the lead, form a committee. Like with other committees, no one is going to want to join. You can attract them by calling it the Emergency Succession Plan Task Force (ESPTF) and coming up with a cool code name for the work at hand using Greek letters and mythological figures, like “Operation Alpha Omega Morpheus”

Step 3: The ED may be the one to push for an ESP and may join the task force, which is great, but if not, someone from the ESPTF should sit down with her and explain the need for the plan and get her perspective on the important things about her work that the task force should take into consideration, along with her thoughts on who may be potential candidates to serve as acting ED in case something happens to her. If she starts freaking out and crying, wondering if she did something wrong, refer her to this blog post.

Step 4: The ESPTF should define the skills and experience needed in an acting ED to help the organization remain functional during the transition. While every nonprofit is unique, there are certain skills that all EDs have in common: Breaking up fist-fights among staff, going to meetings, making inspiring speeches, herding cats, and begging for money.

Step 5: Define a sequence of actions that the board should take in the case Operation Morpheus must be activated. Depending on whether the situation is temporary or permanent, these actions may include calling an emergency meeting, choosing an acting ED, forming a hiring team, changing signing authorization for checks, panicking, etc.

Step 6: Determine a chain of succession, kind of like we do for our government. If something happens to the President, then the Vice President is in charge, and next is the Speaker of the House, etc. You may have a Deputy Director who may take over temporarily, followed by the Director of Operations. Most nonprofits, though, don’t have clear-cut positions like that. At VFA, for example, our succession chain may look like “Program Director/Office Manager, followed by Development Director/Janitor.”

Step 7: Identify important people you need to notify. These include program officers, major donors, contract monitors, partner organizations, clients, etc., Figure out who would be in charge of talking to whom. People might start freaking out, especially if they learn about things second-hand, so it is good to have clear and prompt and personal communication.

Step 8: Work with the ED and other staff to compile copies of important stuff that the acting ED needs to do his work, for example IRS determination letter, bylaws, board meeting minutes, EIN, past 990s, audited financial statements, business license, charitable solicitation license, office lease, bank info and contact, insurance policy number and contact, office security info and contact, office safe combo, computer passwords, water cooler delivery schedule, etc. We EDs tend to hold all this information in our heads, so it’s good to write it down.

Step 9: Finalize the plan and get to the board to approve. Do not make the plan public, or you might freak out people further; keep it among the board and key staff. Designate a board member (usually the chair) to hold a copy of the plan in a secure location away from the office. Another copy should be held at the office in a secure location where no one would look; at the VFA office, that location would be the fresh vegetable compartment of the fridge.

Step 10: Schedule a time once a year to update and revise the plan. Also, update it when there’s significant change in the organization’s structure or staff.

I hope that’s helpful. Let me know what your organization does and if there are steps I left out. Of course, the ESP is just for that, emergencies, and hopefully you never have to activate Operation Morpheus. All organizations should also be working on long-term succession planning, ensuring staff are developing skills and experience to move up the ladder, that there are opportunities for cross-position training, etc. Only by being thoughtful and diligent can we all keep our pants up.

10 Steps for Writing a Kick-Ass Nonprofit Organizational Budget

Every year, at about this time, I start having night terrors. A lot of this is due to watching Game of Thrones and seeing all my favorite characters killed to death in gruesome ways. But it is also because VFA’s fiscal year ends in June, and we must go through the annual budgeting process, which is about as much fun as juggling baby porcupines.

Actually, no, baby porcupines are cute. Budgeting is about as much fun as juggling open jars of spicy chipotle mayonnaise. It’s messy and painful.

So I thought I would write down the steps to developing an awesome budget for a small to medium organization. This is not a guide for those who are starting a nonprofit, but rather for new EDs or board members of organizations that have been in operation for at least a year and will need to develop next year’s budget, or anyone who needs a refresher. Follow these steps below, and you will have a kick-ass budget that you can proudly show to your friends and family.

Step 1: Rally your team. This may be your finance committee. If you don’t have a finance committee, assemble a Budgeting Task Force. Make sure you call it “Task Force,” since Task Force sounds cool, like a team of superheroes who are called into action when the organization sends a distress signal (and at the end of every fiscal year, we are all sending distress signals). Include your board Treasurer, your Accountant/bookkeeper/finance person, one or two key staff, and an astrologer.

Step 2: Have your finance person provide data on up-to-date spending actuals for each program, as well as administrative and fundraising expenses. It is important to know how much you’ve been spending in each category this year, so that you can ignore all of it while you develop next year’s budget.

Step 3: Talk to your key staff to figure out the programming expenses for the next fiscal year. Ideally you will have a strategic plan on which to base next year’s staffing and programming (I’ll write later on how to develop a kick-ass strategic plan). If you don’t, it is important to get an idea from your staff what it is they need to make their programs successful next year. They are in the trenches, so they know best about programming stuff.

Step 4: Unfortunately, many requests can only be fulfilled in a mythical magical world with sufficient unrestricted funds, so you must bargain with your staff and be creative to reach middle ground. For example, a staff may say, “I need a unicorn in order to effectively do my work,” then you say, “we can’t afford a unicorn,” and your staff will say, “without a unicorn, I can’t do so and so and I am burning out,” so then you say, “how about a work-study unicorn instead?”

Step 5: Personnel expenses are the biggest and most critical category in your budget, since it takes staff to make things happen. It is important that your staff are paid a fair and decent wage that are increasing with cost of living. Go borrow the United Way’s Wage and Benefit Survey from one of your nonprofit friends (or order it online if you’re one of those big nonprofits who can afford it). Look up all the positions you plan to keep or develop, and it’ll tell you what on average those positions are paid in organizations your size.

Step 6: Put your computer on hibernate, close your door, and gently weep for five or ten minutes, thinking about all your wonderful staff and how horribly underpaid they are, according to the Wages and Benefit Survey, and about all the stuff you could do if you only had more resources. Then dry your eyes, open your door, and if any staff happens to ask what’s wrong, just give them a hug and tell them you’re proud of them and that the work they do is so important and that they’re making the world better, then go on a walk to clear your head.

Step 7: Now that you have all your projected expenses down, you must look at the potential revenues. Review all the funders who supported you this fiscal year, and categorize each of them by “unlikely to renew since it was a one-year grant,” “possibly renewable, but is so restricted that it may actually cost the organization more to administer than the grant is worth,” “50/50,” and “no clue, since they’re in the middle of a strategic planning process and we’re not sure what their priorities will be next fiscal year.”

Step 8: It is now time to put your astrologer to use. Have them create a chart of where the planets are this year in relation to your organization, as that is the best way to predict where the rest of your funds will be coming from. Mercury (representing foundations), Venus (representing individual donors), and Saturn (representing government funding) are in rare alignment right now, which may mean that it is time to focus more fundraising energy on those areas. The tiny and distant Pluto, representing general operating funds, is no longer a planet, but it still greatly impacts nonprofits, so make sure your astrologer includes its trajectory in the charts.

Step 9: It is unlikely that you will have enough projected revenues to meet projected expenses, so start cutting things and finding creative ways to obtain resources. For example, can you ask for donations of food for programs from local restaurants? Can the children in your programs spend one or two hours a day making products such as shoes or backpacks that could then be sold? And do staff REALLY need dental and vision insurance?

Step 10: Once your Task Force agrees on the draft budget, voila, you’re pretty much done! Forward it to the rest of the board to review and approve. They’ll likely be shocked at how much they’ll have to help raise through individual donations and the annual dinner and will likely ask you to cut down expenses even further. Resist the urge to break down weeping. Just smile, give an inspiring speech about working together, and reassure your board that you won’t be submitting any grants on any day when Mercury is in retrograde.