As we continue to deal with the significant challenges presented by the pandemic, it is important that we consider the immediate and future impacts that it will have on the various sectors of our society. In this article we will focus on Not-for-Profits (“NFPs”).
While the boards of many NFPs follow a traditional governance model where they provide mainly oversight, the unique and far-reaching situation caused by COVID-19 may require boards to become more actively involved in the planning and operations of the NFP. This should of course be done in consultation with the NFP’s chief executive officer or executive director. The reality is that most NFPs do not have an abundance of staff and the staff that they do have is very likely dedicated to dealing with the day-to-day demands with the pandemic.
Board members or other volunteers, including former board members, can provide particular skills and capacity at this time to assist the NFP in carrying out its mission and ensuring that the NFP will be able to address current requirements and remain sustainable into the future.
First and foremost, the duty of any organization is to protect the health and well-being of its staff and the people it serves. If the NFP must have direct contact with the public during this time, all directions and recommendations of government and public health authorities must be strictly adhered to with respect to social distancing and other restrictions for the protection of everyone involved. Consideration should also be given to whether any form of job security can be offered to employees perhaps in conjunction with government programs that may be available to NFPs. The Pitblado COVID-19 Resource Page includes articles for employers and the potential availability of subsidies e.g. COVID-19 Quick Guide for Employers; and Canada Emergency Wage Subsidy.
Once there is confidence that the NFP can function in a safe manner, the focus should be on what the priorities of the NFP should be during this time period with the available resources both human and financial. An assessment should be made whether the demands on the NFP are likely to increase or change as a result of COVID-19 and its downstream effects.
If the NFP is dependent on external financial resources, and most are, a plan needs to be considered as to how those can be continued and even enhanced. In this regard, assistance from the board can be crucial. Is it appropriate and timely to approach current or potential new donors and/or are grants available from government or private organizations? If the NFP has an endowment or restricted funds, is this the time to access those funds? An NFP with external investments should consider whether the investment policy statement or portfolio is appropriate given the current market conditions.
The reality is that there may be a shortage of financial resources available to the NFP and it may be necessary to review which programs are core to the NFP. Some programs may have to be put in abeyance pending a return to normal operations and a resumption of funding.
A robust communication plan will assist the NFP in keeping its various stakeholders informed and enable the NFP to call on those stakeholders for support. There should be an approval process for communications and clear guidance on use of social media. If the NFP does not have processes or guidelines, these should be developed quickly.
Consideration should be given as to whether Annual General Meetings or Board Meetings should be postponed. On May 14, 2020, an Order was made under The Emergency Measures Act (Manitoba) regarding the holding of meetings including for corporations under The Corporations Act. The Order permits meetings to be held “virtually” through electronic means even if the organization’s by-laws do not provide for “virtual” meetings or explicitly excludes them. There are various requirements that must be met including provision of notice to everyone entitled to attend the meeting and facilitating their participation at the meeting. The Order also permits an organization that is required to hold an annual meeting between March 31, 2020 and September 1, 2020 to extend the time for the holding of that annual meeting to no later than September 30, 2020. This Order is in effect until September 30, 2020 unless it is revoked sooner.
On March 28th, the Canadian Government extended the filing deadline for the Registered Charity Information Return until December 31, 2020 for those charities that have a filing deadline between March 18th and December 31st, 2020.
Once there is a return to relatively normal operations the NFP should conduct a review of the effectiveness of its business continuity and crisis management plans and consider whether any changes are desirable. According to public health authorities, it is possible that future waves of pandemic could occur and NFPs should take steps to prepare for such an unfortunate development.
A review of the NFP’s strategic plan should also be conducted to determine if it is necessary to update the plan in view of changed assumptions, resources, mandates or priorities.
This is clearly a dynamic situation that requires creative and compassionate thinking, two skills that most NFPs have in abundance.
Please do not hesitate to contact your relationship partner or lawyer if you have any questions or if we can be of assistance in guiding you through these new challenges.
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This article represents general information and is not legal advice. Please contact us if you would like legal advice that is tailored to your particular circumstances. We would be happy to help.