The board’s role in not-for-profits’ post-pandemic success

By Ken Tysiac

The board’s role in not-for-profits’ post-pandemic success
Image by Andrea Ebert/IKON Images

After more than a year of scrambling to adjust to the challenges associated with the coronavirus pandemic, not-for-profit board members are asking themselves what course to set for the future.

In some cases, the organizations they oversee have made profound shifts in strategy and operations to keep their people safe and preserve their financial sustainability.

Should those shifts become permanent, or would it be better to return to the previous mode of operations once the pandemic ends? Would a hybrid model, combining the best practices from before and during the pandemic, serve the organization best? These are among the questions boards need to make sure management is considering as it charts a path forward amid circumstances that are difficult in many cases.

"Organizations and boards have a responsibility to really be asking, 'Have these shifts become permanent shifts, or are they something that we're phasing out of?'," said Carolyn Mollen, CPA, vice president of administration and finance and treasurer of Resources for the Future, an independent not-for-profit research institution in Washington, D.C. Mollen is a member of the board of governors for the Greater Washington Society of CPAs and of Traveling Players Ensemble, a not-for-profit theater program. She also is a member of the AICPA Not-for-Profit (NFP) Advisory Council.


The pandemic hit many not-for-profits especially hard because their dependence on donations for revenue during difficult economic times has coincided with an increased need for their services.

"There are nonprofits that have had staff members who have gotten sick and who have passed away," Mollen said. "There are nonprofits that have 50% of the staff who can't work full time because they're taking care of children at home, staff who are high-risk and are needed to deliver in-person services. ... Talking with peers, we describe it as the problem with no solution. We're not talking about the revenue or anything else. It's the capacity to actually deliver on what we're trying to do."

At times, not-for-profits have delivered against odds that seemed almost insurmountable. Amy West, CPA, CGMA, is CFO of AHRC of New York City, which supports people with developmental disabilities and was hit hard during the early days of the pandemic. AHRC experienced COVID-19 deaths among the people it supports as well as staff members, and West is amazed by the dedication to the mission that enabled the organization to keep all of its programs running despite the devastating losses.

"I think we're most proud of keeping the morale of our organization going," said West, who also is a member of the AICPA NFP Advisory Council.

It seems certain that the organization will be different in the future than it was before the pandemic. For starters, AHRC is supported by administrative staff who worked standard 9-to-5 hours in the office before the pandemic. While West doesn't expect the organization's administration to ever completely switch to a 100% remote environment, she believes a portion of the work-from-home and flexible scheduling arrangements are here to stay.

This could lead to a reduced need for office space. Coupled with a capacity for providing virtual programming that was developed during the pandemic, this shift might have AHRC downsizing its property footprint.

As devastating as the pandemic has been, "there are some lessons learned that can really be viewed as opportunities and different ways of doing things that we never would have thought of before," West said.

Boards are charged with overseeing the most important business decisions not-for-profits must make. Here are nine topics board members need to consider as they help not-for-profits overcome the pandemic's challenges and look ahead to the future.

Keep people top of mind

Organizations that take good care of their people have a better chance of succeeding after the pandemic ends. In the early part of the pandemic, many boards oversaw not-for-profits' efforts to minimize job reductions and provide work environments that maximized people's health and safety.

Health and safety — including care for mental health — remain priorities for conscientious boards, which also are now considering what the best procedures will be for their people after the pandemic. West said board members need to make sure adequate communication is taking place between leadership and staff as organizations and their people decide in particular how much remote and flexible work will be incorporated into post-pandemic operations.

"Finding ways to have check-ins and communication and letting everyone know what's going on is essential," she said. "There's a whole mental health aspect to this. ... They're being forced to work remotely, and I think some people excel at that and other people don't work so well remotely. There's this lack of interaction, and I think communications and check-ins are important for making sure folks are doing OK."

Fulfill fiduciary duties

Boards have a fiduciary duty to the not-for-profits they oversee that has taken on an added dimension amid the pandemic's financial challenges.

The uncertainty associated with the pandemic has caused many organizations to shift to more of a scenario-planning budgeting process, during which they map out plans based on three or four scenarios. Often this means planning for the best case, the worst case, and something in between.

"It's really been getting boards to pay more attention to triggers, if you will," said Cheryl Olson, CPA, CGMA, a director with Clark Nuber PS who works remotely in Portland, Ore. She also is a member of the Finance Committee for the Girl Scouts of Oregon and Southwest Washington and the AICPA NFP Advisory Council.

Other new conversations about budgeting will center on liquidity and government funding. Keeping tabs on how (and whether) the organization will be able to satisfy its financial obligations during this time is a crucial part of a board's fiduciary duties. West said liquidity clearly is key at times when funding can be uncertain, and boards should carefully monitor management's plans to maintain cash flow.

Boards should provide careful oversight of management's plans for any government assistance that not-for-profits receive. Whether it's from the Paycheck Protection Program (PPP), Economic Injury Disaster Loans, the Provider Relief Funds for health care providers, the employee retention credit, government grants, or other means, many not-for-profits have received government funding as a result of the pandemic that they never have used before.

Boards need to understand these funds at a high level, Olson said. For example, with PPP funds, the board needs to become familiar with whether the loan is being forgiven. If not, it's important for the board to understand the period during which payments will have to be made and the interest rate, as well as monitor compliance with covenants and other requirements.

"While boards don't [need to] understand all the accounting standards and minutiae, they do have to have a broad-level understanding of this area," Olson said.

Monitor fraud risks

Since the beginning of the pandemic, staff at Mollen's organization have experienced phishing scams at a level unlike anything they've ever seen. She said it's partly the nature of the changes to more virtual business flows.

"I don't see organizations going back to paper forms and in-person things now that we've switched to virtual," Mollen said. "So I think that heightened cybersecurity risk is going to continue to be something we're fighting against."

The pandemic has brought about heightened risks of fraud related to:

  • Changes in internal controls as a result of a shift to a work-from-home environment;
  • Cybersecurity challenges related to the hasty setup of systems to accommodate remote work; and
  • Increased motivation to commit fraud among individuals harmed by the economic fallout from the pandemic.

Board members should question how not-for-profit management is stepping up efforts related to prevention, detection, and mitigation in these areas. With respect to cybersecurity, at a minimum, board members should be asking management what the organization's top cybersecurity risks are and how those risks are being managed. Boards should also ensure the organization has a well-designed response protocol in place that it will follow in the event a breach occurs.

Concentrate on the mission

The vast need for not-for-profits' services during the pandemic can lead to a "mission creep" of sorts as well-intentioned organizational leaders attempt to help people with problems that are outside the not-for-profits' normal operating procedures.

"This is where strategy comes in," Olson said. "Are you still the right person to provide those services? Is there another organization who can provide these services at a lower cost or who [already] is set up to provide them?"

When the pandemic eventually subsides, not-for-profit board members may wish to closely examine operations to make sure the crisis didn't lead them to adopt tasks that are outside their areas of expertise.

Watch for M&A opportunities

Some experts said the not-for-profit sector was oversaturated with organizations performing overlapping services before the pandemic. The crisis may lead to consolidation of efforts in the sector.

One-fourth of not-for-profits said in a Charities Aid Foundation survey in August that they would close within 12 months under the conditions that existed at that time. Some not-for-profits will be forced to ask whether they can continue their efforts, and others may wish to explore strategic partnerships or acquisitions.

"Board members should be thinking about the mission of their organization and what's the best way to serve and achieve that mission, and recognizing that sometimes that could very well mean merging or being acquired by another organization," Mollen said. "And that's not a failure. That's actually a success if you're able to keep your programming alive in service of your mission in a different form."

When evaluating mergers, West recommends that boards look for organizations that have common missions and are financially healthy but perhaps may be struggling as a result of the pandemic.

"Where there's real synergy between missions, where there are economies of scale, I think you can realize some true cost savings by bringing the two organizations together," she said. "And long term, having that second organization as a partner will benefit your organization."

Sometimes, successful partnerships won't result in mergers or acquisitions but will help multiple organizations expand their impact and reach. For example, Mollen said she has seen local or state-based not-for-profits partner with like-minded organizations in different states or regions to share costs and expand their virtual programming.

In some cases, boards may need to discuss the possibility of bankruptcy. Not-for-profits may liquidate under Chapter 7 of the Bankruptcy Code or reorganize under Chapter 11, and this decision is completely the board's domain, as creditors don't have the power to force a not-for-profit into bankruptcy.

Discuss technology

Olson has found that the pandemic pushed not-for-profits to act quickly on issues they had put on the back burner as long-term objectives, such as technology upgrades.

"It seems like that 'long term' is happening now," she said. "People are now automating their workflows, and they are now going to the cloud with their different systems."

This means not-for-profits that haven't upgraded their technology recently may be falling behind. And not-for-profits that have acted to install new systems and software need to evaluate how that technology is working and whether additional investment or training is needed to use the tech to its full capabilities.

In either case, asking the right questions about technology will help board members make sure a not-for-profit is headed in the right direction. Boards should make sure they have the right expertise to provide oversight on technology and the risks associated with it. Technology risks and opportunities that boards may wish to ask about include considerations related to staff working from home, the supply chain, and outsourcing/vendor decisions and relationships.

Focus on policies, procedures

Not-for-profits with strong governance will find that their policies and procedures can help them succeed financially while fulfilling their mission during this time. Under what circumstances should you dip into reserves to weather the crisis? Your operating reserve policy can guide you. Should you pursue new initiatives to help people in need? Your mission statement can help you decide whether the activities are consistent with your objectives.

Sometimes challenging times also can expose gaps in policies and procedures that need to be filled. It's important for boards to review and address these with management while they are top of mind. Don't put them off until the next crisis.

Solicit donations

Fundraising always is an important element of not-for-profit board membership, and it has become more crucial amid the economic difficulties of the pandemic.

Board members who can give need to give, and they may need to step up their efforts to recruit other donors.

"If you believe in a cause, now more than ever you need to step up," West said.

Carefully measure progress

One of the big-picture tasks that boards often handle in their oversight is careful analysis of how a not-for-profit's performance compares with what has happened in past years. Because the pandemic has created conditions that are different from anything that has ever been experienced, those comparisons with the past are likely to be devoid of much useful meaning.

"This is the unicorn year," Olson said. "While many organizations have always compared their financial statements to the budget, the prior year, and peer organizations, that's not going to be as helpful currently."

This creates a challenge for boards as they attempt to discern a not-for-profit's progress or delivery on its mission. Another way to accomplish oversight amid the pandemic's unprecedented and unexpected disruption may be to examine progress related to updated forecasts and budgets that were put in place after the pandemic began. Did management react to the pandemic appropriately, and is there a plan in place for moving forward in a positive way once the pandemic ends?


These are questions boards will have to answer as they perform important oversight duties that have become even more challenging as a result of COVID-19's disruption. As they do so, board leaders will need to consider whether they have the appropriate skills to provide valuable feedback to management as it navigates a treacherous and changing environment. For example, the move toward more digital operations and automated workflows requires expertise in technology that may need to be added to the board through recruiting new members or training existing members. As is the case with staff and management, the board needs the right mix of skills to provide competent oversight for the near and distant future.

About the author

Ken Tysiac is the JofA's editorial director. To comment on this article or to suggest an idea for another article, contact him at



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