This is the story that no one wants to write.
The one about the nonprofit organization that closed down, had to let staff go, and shut its doors after 29 years of programming. The one that “failed.”
However, this is also the story of an organization committed to innovation, to its mission and to its team and programs—the organization that was committed to ending well. The organization that, from the outset, was determined to lead from a place of mission-first and set as its “north star” taking care of its staff and its programs.
As Harvard Business School’s Amy Edmundson says in her new book, Right Kind of Wrong, The Science of Failing Well, “It’s natural to hunker down and imply that failure is to be avoided in tough times, but this is exactly when innovation is most needed.”
The Learning Partnership
The Learning Partnership (TLP) was a 29-year-old organization founded on innovation. Known best for “Take Our Kids to Work,” the organization’s mission was to build bridges between education, business and government to support today’s students to become the leaders and citizens of tomorrow. Over its history, TLP’s work positively impacted tens of thousands of students, parents and educators across Canada.
Throughout the pandemic, TLP worked hard to pivot, restructure, and strengthen its programs and funding relationships. There was a strong three-year strategic plan on deck. In late spring of 2022, however, the changing external environment, an analysis of future scenarios, and limited financial reserves combined to present an unacceptable level of risk. Even if we hunkered down, we risked not having the funds needed to wind down gracefully, support our staff and programs, and meet our regulatory and fiduciary responsibilities.
As Edmunson suggests, this became an opportunity to put our commitment to innovation to the test in the most difficult of circumstances.
As CEO and Board Chair, we reflected on our shared learnings and discovered that the principles that apply to strategic planning for growth can also apply to strategic planning for wind-down.
START WITH YOUR WHY: Mission matters most
For nonprofit organizations, our mission is our WHY. In difficult times, it is critical to consider:
- WHY does the work we are doing still matter?
- WHY are we the best organization to deliver this work?
- WHY are we the best place for staff and funders to invest their time, talent and treasure?
An organization/ operations-first approach masks the larger questions that must be addressed. A mission-first approach creates the space for courageous discussions and possibilities on the state of your WHY.
CONFRONT THE BRUTAL FACTS: Know your numbers
In 2019, TLP explored our wind-down costs as part of our good governance review and three-year strategic planning process. We didn’t realize how important these would become.
Know what it will cost to cover organizational wind-down: Knowing the costs and categories involved can be a sobering exercise but is critical for decision-making, and best done before you need to do it. Know the costs of staff severance, outplacement support, respectful wrap-up with vendors and funders, legal and regulatory costs. Build in a healthy buffer for the unexpected.
Include wind-down costs in your reserve policy: Set a clear financial line for what must be held in reserve to cover wind-down costs. As you approach the line, the risks become very clear.
Review your wind-down costs regularly: Build a review of wind-down costs into your annual budgeting process as they can change over time. This provides both confidence and clarity when considering strategic choices.
BEGIN WITH THE END IN MIND: Set your north star
TLP’s unwavering north star was to take care of our people and programs. As Board Chair and CEO we articulated this principle early and often to board and staff. It became the deciding factor when making tough decisions.
Caring for our people: While mission matters most, no mission comes to life without our people. Knowing we had the funds for fair severance and outplacement support for all staff made difficult decisions easier. We invested in clear, consistent and compassionate communications to support staff as they processed the decision and what it would mean for them. This also helped guide how to share the news with external contacts including funders, vendors and partners.
Transformation of our Programs: We were committed to ensuring that students across Canada would be able to participate in TLP’s innovation education programs for the long-term—even if it was no longer TLP delivering them. Our decision to transfer our programs to four other Canadian organizations who shared our values of inclusion and innovation allowed our mission to continue. This intentional decision created the space for continued transformation of our programs under new leadership with continued returns on the social capital TLP had created.
A forecast of change
The Ontario Nonprofit Network’s October 2023 Report is a stark reminder of the pressures that the sector is facing. While there is not a centralized tracking of nonprofit closures, the survey of sector participants indicated that knowledge of nonprofit closures is increasing, with 35% indicating that they know of a similar organization closing. This number jumps to 63% when forecast for 2026.
Closing an organization can be incredibly scary and complex. It can also be an act of deep love and respect for our mission and our people. By sharing our own learning as a Board Chair and CEO in choosing to wind down TLP, our goals are threefold:
- to inspire in you the courage to have the difficult conversations;
- provide comfort to know you are not alone;
- instil the confidence to innovate and ensure a lasting legacy of leadership and transformation of the social capital your organization has created in unexpected new ways.
Deb Craven is the Board Chair of The Learning Partnership and President of Longo’s.
Debra D. Kerby is the former CEO of The Learning Partnership and now Principal of DDK & Associates. Her mission to support nonprofit boards and leaders to do more great work in challenging times through strategic advisory, interim and fractional leadership. debra@debradeenkerby.com | LinkedIn
