Establishing a clear set of decision-making principles can help leaders steer their organizations through a crisis and beyond. What we've learned through 25 years of experience advising nonprofit is using such values-based principles is particularly helpful when facing the need to quickly make decisions that involve difficult trade-offs.

Explicit principles to guide your decision making can help by:

• Enabling your leadership team and board to make faster and more consistent decisions: Without shared criteria, conversations about tradeoffs are likely to be longer and the resulting decisions more varied because individuals might assume different priorities.
• Ensuring equity-related considerations receive proper attention: Stress can lead us to narrow our focus and act in ways that reinforce implicit biases. But guiding principles can anchor us to the commitments we’ve made and that need to be honored—particularly when times are tough.
• Allowing you to convey the reasoning behind key decisions in a way that instills confidence and trust: Make no mistake that your staff, board, and stakeholders will scrutinize every major decision. A lack of clear, consistent communication in uncertain times can breed dissatisfaction and mistrust within an organization.

The principles you develop will reflect your organization’s unique mission, values, and circumstances. Here’s what we mean, looking at four different categories of principles that come up often among nonprofit leaders:

Principles to Protect the Mission: Depending on your organization’s programmatic focus, demand may rise significantly, or slow down dramatically during a crisis. Whatever the situation, you’re likely facing a wave of decisions about evolving and adapting your offerings.

Decision-making principles that can help you protect your organization’s mission in this context might include statements such as:

• We will find ways to safely and effectively continue our core programs; or
• We will prioritize activities where there is greatest need in the communities we serve.

Consider how these two different principles could lead to different decisions. The first might lead you to focus on existing programs, even if that requires finding new approaches. For example, during the COVID-19 pandemic, organizations ranging from child welfare organizations to education servicers to mental health providers switched to online service provision, a step that many had never seriously considered before.

However, if you adopted the second principle, you might find yourselves shifting your mix of activities. For example, a human services agency might decide to reallocate resources toward its food bank during a financial downturn. Some of its other programs, such as youth services, may be harder to deliver and might pause as the organization considers whether and how to operate. 

Principles to Put People First: For most nonprofits, staff salaries represent the largest outlay and, by default, become the go-to budget cut during tough times. But talent is also typically the organization’s greatest asset, and behind the payroll line are people you care deeply about—your colleagues and friends, and their families. That’s why nonprofits might look to guiding principles that address their people-related decisions.

Some principles might include:

• We will prioritize the well-being of our people through a crisis; or
• We are invested in the long-term careers of our team members.

If you adopt the first principle, you would likely consider reducing salaries before reducing headcount. We know of one nonprofit that, during the COVID-19 pandemic, opted to cut executive salaries drastically while keeping all other salaries intact for the moment. Other nonprofits may have no choice but to trim headcount, but even still, nonprofit leaders have options. Furloughs as opposed to layoffs might help former staff retain their employment-based healthcare, for example.

On the other hand, following the second principle might lead you to focus on ensuring staff are in roles that are likely to be in demand in the future. One organization invested in retraining staff from programs it had had to scale back, so it could reassign them to programs where it anticipated future growth. That might still mean laying off some staff, regrettably. But staying true to the principle might mean supporting those former team members through the transition and seeking roles for them with peer organizations.

Principle to Elevate Equity: If equity considerations aren’t explicit in decisions about programs and staff, they should be.

Here, some principles might include:

• We will consider the impact on those who are less well-resourced when making decisions related to the people we employ; or
• We will center the needs of those facing the greatest barriers to access in designing programmatic or operational shifts

You might start by considering the income disparities across your organization’s employees. A 20 percent pay cut may be upsetting for your management team members, but it could have serious consequences for your front-line staff. So you might decide that management will take on a larger share of any financial hits—as the afore-mentioned nonprofit that cut executive salaries drastically did. At the same time, not every management team member will have the same ability to absorb a proportionate cut in salary, so you might also consider how the financial burden is apportioned at every level.

As we saw during COVID-19, crises can also have an inequitable impact on people and communities of color. People of color are disproportionately likely to be in low-paying or hourly-wage jobs without paid sick leave or viable work-from-home options. They are also more likely to have limited access to such resources as affordable, quality health care and broadband. Recognizing these structural barriers might also lead you to adapt programs bearing in mind a “curb-cut effect” which demonstrated how programs designed to benefit marginalized groups often end up helping everyone. It used the example of “curb cut” ramps from sidewalks to street level, which were originally implemented so that disabled wheelchair users could more easily navigate street crossings—and ended up benefiting anyone who has ever pushed a baby carriage or pulled a wheeled suitcase. Similarly, designing COVID-19 response with the needs communities of color in mind (e.g., if broadband access is a limitation, ensuring program models are not reliant on it), knowing that other target populations will also benefit from the change.

Principles to Focus on Financial Resilience: “Financial resilience” refers not only to surviving the crisis, but also to bouncing back as the crisis recedes. You will want to retain some ability to deliver on your mission in an uncertain future environment. Across-the-board cuts to an already lean budget, for example, can make a terrible situation fatal if those cuts fail to preserve the capabilities critical to the organization’s longer-term survival.

Some principles here might include:

• We will aggressively protect revenue streams before cutting critical expenses; or
• We will preserve the long-term financial health of our organization.  

At most nonprofits there’s not a lot of excess to be cut in good times, let alone during a crisis.

The first principle points to the equal importance of building the top line: revenue. Focusing on that principle might lead you to invest significant senior time in efforts to deepen existing relationships with current funders, or to prioritize activities sustained by multiyear contracts or long-term funder relationships. It’s a good time to contact funders and make the case for them to waive restrictions and step up with additional support: For example, during the COVID-19 crisis, nearly 700 foundations pledged to provide general operating support and help community organizations in areas where COVID-19 hit hardest. Or the principle might lead you to explore whether the crisis might open up new funding relationships or opportunities for fee-for-service program innovations.

On the other hand, the second priority points to the need to come through the immediate crisis not only with core staff and programs intact, but also with the financial flexibility to explore new options. Maintaining a few months of cash reserves is one way to accomplish this. That might not be possible for everyone: national research shows that most nonprofits function with fewer than three months of operating reserves. But you will still face investment needs down the road, so not fully depleting the rainy day fund might still be a good idea.

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To be sure, we’ve stylized our examples of principles and the decisions that might emerge from each. In real life, a set of principles would be more specific to circumstances, tuned to the specifics of your mission, values, programs, beneficiaries, and communities. Every organization will need to identify the priorities that make sense for them.

And the decisions won’t come quite as easily as we’ve made them out. There will be difficult tradeoffs to make among the principles. Indeed, some principles may feel like they’re in direct opposition: How can we prioritize the well-being of our people—which means continued spending on payroll and benefits—while preserving the long-term financial health of our organization—which means conserving cash? In truth, it takes a balancing act of tightrope proportions. You may, for instance, commit to sustaining full payroll and benefits in the short term, and also to reassessing that decision if cash reserves drop below your threshold level. Clarifying the principles at least helps you confront the dilemmas you will inevitably face knowing that your priorities and your values will be given due consideration.

A crisis offers an opportunity to align on principles for decision making. That’s not to say your principles, once defined, are written in stone. They’ll need to evolve as the crisis passes. We hope you can use this framework as a guide to develop your own compass during a storm.