The nonprofit sector and its myriad of agencies are not immune to serious economic problems. When the economy in any country slows down and there are cuts in government funding, when voluntary contributions are down, and when expenses keep mounting, what is the professionals’ moral and ethical responsibility to the nonprofit organization and to the clients who are receiving services from the organization? In some dire situations, the nonprofit no longer has the funds to pay its professional staff. In those cases, for how long do professionals need to keep working without receiving their salaries? When do professionals say enough is enough and decide that they can no longer continue providing services to the clients without receiving remuneration?
These are difficult and complicated issues, and as agencies experience very difficult financial situations, the challenges become sharper and sharper as the hope of financial sustainability fades. Recently I had the opportunity to work with an agency that had not been able to pay staff salaries for more than three months. Although the administrative staff and the financial resource development professionals were doing everything they could to solicit funds from individual donors and foundations, they were not able to raise the needed funds. The line staff members were under more and more pressure because they were unable to pay their own bills and their creditors were increasing their demands on them.
The agency’s clients – severely developmental disabled adults and children, and their families – were dependent on the psychological support services they were receiving from the organization. The staff could not imagine failing to provide them ongoing assistance both in terms of personal and family treatment and in helping them negotiate the confusing and complicated network of government services: this assistance was essential. However, there was a point at which the professionals had to focus on their own financial needs and to balance the needs of their clients against their own economic survival.
In principle the collective professional staff understood the challenges facing the agency, and as individuals they felt torn between wanting to continue providing services and their responsibilities toward their own families. They had been assured that the organization was not going out of business and that they would not be left high and dry without receiving their salaries. At the same time their bank accounts were being depleted to a greater and greater degree. There were not too many options for the staff or the agency.
As of this writing it is not clear what is going to happen and how the staff will decide to respond both in the short term – the coming three months – and in the long term beyond that. If the professional staff members decide to leave the organization, it will undoubtedly be a very difficult process of terminating their relationships with their clients on the basis of the economics of the organization. Without a doubt clients will feel abandoned and have a great deal of anger at both the staff with whom they have had a trusting personal relationship and at the agency for being unable to fulfill its responsibility to provide the needed services.
Going through the process of ending professional working relationships because of an organization’s economic situation is not easy for professionals. In some ways it is similar to teachers’ decision to strike at a school or of doctors and nurses who strike at a hospital. In these cases the professionals decide that they can no longer educate the children or treat their patients when the school or the hospital is in violation of their agreement to provide adequate compensation for their work. In the case of a nonprofit organization the step is taken because the right of the professionals to receive their salaries in a timely way is being violated. It may seem like a harsh decision, but organizations do have obligations to the staff as much as the professionals have obligations to the clients.
In these kinds of difficult situations the following question has to be asked: at what point have the professionals fulfilled their professional and ethical responsibilities to the clients so that they can stop working or leave the organization until such time that they receive their salaries? Is this an individual decision, or should it be a decision that is made by the majority of the staff of an organization? When the decision is finally made, what is the message that is communicated to the clients? Does the organization inform the clients, or do the professionals inform the clients?
These questions cannot be addressed in a vacuum by the staff, and of course there are parallel questions that have to be addressed by the nonprofit organization. What does the agency say to the community? How does it communicate to the community that it is either temporarily suspending services or is closing its doors due to its financial situation?
Guidelines for answering these questions are required both for the nonprofit organization and for professionals in the nonprofit sector. In the coming weeks, I will propose these guidelines for dealing with these kinds of difficult situations. If any of you have experience in this area or would like to share your thoughts, please feel free to do so either by commenting on the blog or emailing me at Stephen.Donshik@gmail.com. In the meantime, let us hope that solutions are found for my client and other agencies in similar situations.
Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Nonprofit Management and Leadership Program and has a consulting firm focused on strengthening nonprofit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.