A special relationship forms between nonprofit organizations and those who support them. This is especially true of nonprofit organizations committed to compassionate service and working on problems that affect disadvantaged populations. People from all walks of life and from every socioeconomic segment donate their money, time, and other forms of support to nonprofit organizations with an understanding that they’re contributing to causes they believe in or that align with their values.

Shoppers and consumers can become very passionate about their favorite brands, products, and services, but these bonds are usually not as strong or passionate as the bonds between compassionate-service nonprofit organizations and the people who support them, mainly because there is more trust involved.

Unfortunately, no person or organization is perfect, and nonprofit organizations committed to good causes are not exempt from mistakes and wrongdoing.

So, what happens when a nonprofit organization loses that special bond of trust granted to it by its supporters? What can nonprofits do after mistakes are made, scandals occur, or wrongdoing takes place? They must rebuild, rehabilitate, and restart.

Rebuilding

Rebuilding involves changing the way the organization is structured. Think of a damaged nonprofit organization as a building that has suffered from fire or flood damage. Structural elements like walls, supports, and roofs must be replaced.

In a blog article by Board Effect, a company that produces software tools for nonprofit and educational boards of directors, personnel dismissals and replacements are often in order. This may include just one person or a limited number of personnel, or it may have to involve all of those found guilty or misconduct.

For example, after allegations of extravagant and wasteful spending rocked the Wounded Warrior Project in 2016, the CEO was immediately replaced, and the new CEO (along with a third-party team of advisors) was tasked with investigating the allegations. This externalized the problem and allowed the Wounded Warrior Project to rebuild the organization and re-affirm its trust with clientele and supporters.

Rebuilding may also include eliminating certain positions entirely, establishing new positions (such as compliance officers or watchdog positions), and changing the way the organization reports to its governing board.

Rehabilitating

In an article by Nonprofit MarCommunity, a nonprofit marketing communications and networking community, rehabilitating a nonprofit organization that has suffered a scandal or similar setback requires a very deliberate and swift approach, which they describe in the five following steps:

1. Promptly issue a statement once you have the facts. MarCommunity says holding off on going public with your nonprofit’s problems may be tempting, but doing so will likely make the matter worse. “A common mistake made by nonprofits is ignoring negative press in hopes that it will go away,” states MarCommunity. “While it may seem like discussing a crisis will perpetuate the impact, the opposite is actually true.”
2. Be transparent and thorough about the issue. Most nonprofits maintain fairly high levels of transparency because the law and their own charters require it. After bad press or big mistakes, the transparency should probably be increased, says MarCommunity. “Board members, donors, and the media will be demanding answers and eventually, the entire truth will surface.” Best to disclose the details yourself and begin immediately to regain the trust of your supporters.
3. Show empathy and concern for the wronged parties. Those involved with a nonprofit mishap or scandal may become so caught up in preserving the organization or rooting out problems, they lose sight of those who were affected. The nonprofit must make deliberate and sincere efforts to acknowledge, validate, and possibly compensate those who were affected by the misconduct.
4. Take responsibility for what happened. Another temptation for a nonprofit organization under scrutiny for mistakes or misdeeds is to deflect blame. MarCommunity recommends that responsibility for the problem must be taken by all those in leadership positions who have not stepped down or been replaced. “...leadership has to admit to any shortcomings and never attempt to blame others for internal problems that should have been avoided.”
5. Describe appropriate action being taken. When an organization has lost trust with its supporters, an approach of “It’s being handled,” simply will not do. The steps that a troubled nonprofit takes may be as effective as humanly possible and may include all the steps described above and more, but MarCommunity suggests that to fully rehabilitate damaged bonds of trusts, the reparative steps should be openly described and explained.

Restarting

MarCommunity states that once the worst of the crisis has passed (for example, once the negative media attention has subsided), nonprofits must take part in rebuilding their public image. This may take the form of outreach programs, press releases, and modifications to an organization’s online presence to present a positive “moving forward” narrative that is sincere and transparent.

According to The Conversation, a news source for academia, one way to help restart an organization's narrative is to rely on high-profile spokespersons. For instance, after Save the Children began its recovery from its 2018 sexual abuse scandal, the organization enlisted PR support from Oprah Winfrey and Disney CEO Bob Iger. Not all nonprofit organizations can attract that kind of star power, but high-profile spokespersons can include ardent supporters, civic leaders, and well-known members of the local nonprofit or grassroots community.

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