Ready for the Worst?

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The breathtaking devastation in Oklahoma this week prompts a crucial question for the leadership of nonprofit organizations:  What is your organization’s disaster recovery plan?  In her article “Charity Inc.: Preparation Counts,” Marnie Taylor, President and CEO of the Oklahoma Center for Nonprofits, prophetically challenged nonprofits to seriously assess their risks less than three weeks before the powerful tornado leveled much of Moore, Oklahoma.  In the aftermath of the calamity, we are reminded of the importance of preparation.

Directors and officers of nonprofits have specific fiduciary duties to act in the best interests of the organizations they serve.  These fiduciary duties should include preparation for disasters, natural and otherwise.  As Ms. Taylor explains, not all disasters are of the natural variety.  Sometimes organizations are the targets of hackers and the damage done is to crucial data and computer systems.  In other instances nonprofits face the loss of key individuals.  If there is no preparation, such losses can cripple the organization’s ability to accomplish its exempt purposes.

Wise leaders will take advanced steps to mitigate, or even eliminate, the damage done when disaster strikes.  This process begins through the careful development of strong corporate documents, such as the organization’s Bylaws.  Clear operational structures enable an organization to handle crises well.  The process also includes carefully prepared dispute resolution policies; insurance needs evaluations – including officer and director liability coverage, and implementation of data recovery and systems infrastructures.  Leaders should establish clear action plans that will keep the organization’s activities on track with limited or no interruption of programming. 

Disasters generally strike without warning. Directors and Officers should honor their fiduciary duties to ensure that the organizations is as well prepare as possible.