Make the decision
"A decision … should be made at the earliest point in time after all alternatives have been weighed"
Look at best-case, worst-case and most likely scenarios. Should you continue, expand or give up programs? Pass on programs to another organization? Merge with another to keep the programs going?
Do you have the resources, support and demand to continue, but you need time to regroup? Do you have a core (at least the minimum) number of Board members to continue to serve? Can you maintain the minimum level of activity required by state law and your by-laws? Will your stakeholders/funders stand by you over the course of months/a year or two? Is the changing environment one in which you believe you can survive and thrive?
Any decision that significantly changes your organization needs to include your funders and stakeholders as early as possible. You will need to figure out your own right moment: sharing candidly can be touchy, but you also don’t want to blindside long-term supporters. Take your obligations into account: multi-year support you have accepted and committed to delivering programs and services, and restricted gifts to your operations or endowment. These funds may or may not need to be returned – talking with both your funders and your legal counsel can help you figure this out. Some organizations have been successful in re-purposing donated funds to help with transition expenses or other emerging needs.
If the answers are generally yes: restructuring or hiatus/dormancy may be your best option.
If the answers are generally no: merging with another organization, being absorbed or absorbing another, or dissolving, may be your best option.
The Aspen Santa Fe Ballet made a radical restructuring choice in March 2021 to disband its professional performing company; the sustainability of its dance touring was already tenuous, and the cancellations due to COVID only made things more difficult. The company sees this as the latest in a series of strategic evolutions over its 30 years. “Our mission is broad: the highest standard of artistic excellence in performance, education and outreach,” said executive director Jean-Phillipe Malaty. “We’ve always had a great sense of identity, and this mission gives us the freedom to change.” The organization’s Board was well aware of the challenges of touring, for the company and for the dance field in general. ASFB will continue its focus on their network of dance schools in two states, their free after-school Folklorico outreach programs, their presenting series, bringing world-renowned other dance companies to perform in Aspen and Santa Fe, and their new initiative the Aspen Santa Fe Ballet Fund for Innovation in Dance. “Our stakeholders have a sense of relief that we are going to be able to continue moving forward, that we are still going to have professional dance in Aspen. And the new structure and activities all fall within our existing mission, and allow us to continue to fulfill that mission.” Courtesy Arts Advisory Board/Aspen Santa Fe Ballet.
Christopher Hochstetler, executive director of the Stuhr Museum in Grand Island, Nebraska, recognizes the distress the idea of closure can bring, but advises us to keep the larger picture in mind. “Our mission is our North Star. The goodness of our mission has not changed, merely the circumstances. Just because an organization shuts its doors doesn’t mean the mission isn’t relevant, or that it can’t be carried on by others.” A mission perpetuation plan can help the community navigate the winding down and find those who can carry on with the mission in other ways or through other entities.
“A decision … should be made at the earliest point in time after all alternatives have been weighed” (American Association for State and Local History Ethics Position Paper) - while there’s still time to negotiate the terms of your transition. In Lessons from a Closure: What Are The Warning Signs?, Matthew O’Grady, Interim CEO of the Cancer Prevention Institute of California, reports “CPIC’s leadership decided it was time to fold when they still had some chips on the table. That gave us precious time to preserve its mission and leave a lasting legacy. Every single research project and community education activity that was ongoing in 2017 has been preserved and is now in the good care of other trusted organizations. Nothing was lost. There will be enough financial reserves left over at the end that the board has elected to endow two research fellowships as an inducement to future scientists to focus on cancer control and prevention research. In these endowed fellowships, CPIC’s name and mission will live on in perpetuity. It may be time to fold, but by deciding this soon enough, CPIC definitely won the final hand.”
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The information included in this Toolkit was culled from sources available to the public, with input and review by field and subject matter experts. Every effort was made to present current and correct information as of July, 2021. This Toolkit does not represent legal guidance, and is provided for informational purposes. The author and publisher cannot be responsible for any losses or failures users experience as a result of using this information.
This Toolkit Includes Material From:
The American Association for State and Local History, Amy Schindler/University of Nebraska at Omaha (UNO) Libraries, Arts Advisory Board, Association of Academic Museums and Galleries, Bancroft Library/University of California at Berkeley, Beth Kattelman/Jerome Lawrence and Robert E. Lee Theatre Research Institute at Ohio State University, BlueAvocado.org, Christopher Hochstetler/Stuhr Museum, Deborah Gilpin/Madison Children’s Museum, Deloitte, Edgepoint, the Glendale Star, Greg Hunter/Council of Nonprofits, Harvard Business Review, the Insurance Institute for Business and Home Safety, Jean-Phillipe Malaty and Tom Mossbrucker/Aspen/Santa[MQH1] Fe Ballet, Jeanne Bell and Steve Zimmerman/Nonprofit Sustainability, Judy Polacheck/Polacheck HR Law LLC, Krystal Siebrandt, HBE LLP, LaRue Allen/Martha Graham Dance Company, Leigh Grinstead/LYRASIS, Michael Ibrahim and the MassCultural Council, Mindtools, Oral History Association, Performing Arts Readiness, Stephanie Mattoon/Baird Holm Attorneys at Law, Stephanie Plummer and the Nebraska Arts Council, Susana Smith Batista, Voice of Witness, the Wallace Foundation and AEA Consulting. Thanks to Beth Kattelman, Claire West, Deborah Gilpin, Leigh Grinstead, Lynn Dates and Stephanie Plummer. Special thanks to Jan Newcomb/NCAPER, and Tom Clareson, Performing Arts Readiness project. Design by Lynn Dates.