On-Point

In this double-header installment of the On-Point column, Council on Foundations senior advisors herald advance planning and troubleshooting, as well as working toward maximum buy-in before problems arise, as saving graces in managing crises and change.

"There's something going on over in Turkey…" The Horizons Foundation supports intercultural experiences for teens and young adults. Through one long-standing grant program, Horizon provides scholarship funds to a coalition of organizations that conduct educational tours for young people, in which students of many faiths travel in a group to destinations in the former Soviet Union, Turkey and Greece.

One afternoon, a local television station picks up a story circulating on the Internet that says that an incident has occurred in Turkey involving students who are on a trip underwritten by Horizons. It looks as though the students, and their van, are being held hostage. Religious extremism seems to be a part of the story.

The station cannot reach Donna, the Horizons Foundation's CEO. A staffer at the station knows who the board chair is and calls him. As far as he knows, the chair says, the foundation doesn't have any programs or people in Turkey; the foundation certainly does not put people in danger. Meanwhile, Donna's public information officer returns the call intended for Donna. Although he hasn't heard about this incident, he confirms that Horizons-sponsored students are traveling in the region. However, he believes that they departed two days ago from the region of Turkey where the incident occurred.

The TV station runs a newsflash saying that the "foundation is unable to confirm" whether the students Horizon sponsored are involved in the incident in Turkey.

A long night passes, and still no one knows what has really happened. The word terrorist is being used by the media, even though details remain sketchy. Donna, the board chair and the public information officer are fielding calls from the media, students' families, coalition organizations and local religious leaders, who all want to know why the foundation has put young people at risk without adequate safeguards.

Farfetched? Not at all, say the On-Point advisors. The vulnerabilities of a summer exchange program are all too real. And, should something happen, instantaneous electronic communication creates the potential for a great variety of actors to relay a story around the world before anyone knows what has really happened. That speed of communications can lead to false impressions—in this case, that Horizons is the sponsor of the trip.

So Horizons, which apparently lacks a crisis communications plan and is further burdened by a board chair who our advisors say has forgotten everything he should have learned in media training, is very poorly equipped to respond. And Donna is, in the words of one advisor, "trying to outrun a moving train that is a little bit ahead of her…and accelerating."

Donna and her foundation's staff are not alone, say our team. Few foundations, except perhaps for the very largest, have thought through the risks of programs like the one supported by Horizons, let alone developed a plan for "what if?" Although, thankfully, incidents like Horizons' possible hijacking are rare, many other crises can and do occur at foundations. One of our advisors has had a board chair die in a plane crash; another has had to meet protestors of a controversial grant in the presence of an armed security guard. And then there are accidents, bomb threats, precipitous drops in assets and occasional malfeasance by foundation personnel to contend with, not to mention fires, earthquakes and hurricanes.

All of those situations trigger the need to think and act quickly, to be transparent and forthcoming, to speak with one voice and convey one message and, above all, to know "who's on first" (or who's in Turkey). Yet many foundations, say our advisors, by temperament tend not to be transparent or to attach a high value to other people's need to know. They tend not to turn things around on a timetable that is compatible with today's 24-hour news cycle. And they can easily think of themselves as insulated, one step removed from what happens in the field.

Taking Control

The specifics of Donna's story are sketchy, given what is known. The crisis may be over in a few hours if the worst fears prove false, or it may mark the beginning of an extended, agonizing situation that requires long-term monitoring and responses. The grantee organization may or may not know what is happening. Our On-Point advisors offer some advice to Donna and Horizons for proceeding in the next 24 hours—and reserve their most ardent advice for how Horizons can benefit from the lessons learned from this incident.

The CEO must take charge. Donna needs to take control of the situation from the Horizons perspective right away—she must show the board, staff, media and public that she's got the situation in hand. She should coordinate quickly with the board chair and the public information officer (delicately, but firmly, shutting down the chair as a public commentator) to clarify which one of them will speak for the foundation. The advisors suggest that Donna take the speaking role, given the gravity of what could happen to the students.

The board must be kept fully informed. Donna should contact all members of the board, even before she has pieced together all the events and facts. "Board members do not like learning first from the media about a problem the foundation is having," stated one advisor, who learned this the hard way. Donna should use the phone or e-mail to let the board know what has occurred and what the foundation's role is, stressing that she is personally handling the situation. She also should let them know what she is doing to gather more information and build a responsible strategy. Donna should inform the board they will hear back from her as more becomes known, then convey all of this information to the foundation's staff as soon as the office opens.

The foundation must take a well-defined role in the larger response. Donna should contact the grantee organization to learn the details Horizons apparently doesn't have: Who is the tour organizer, who are the tour operators, what other parties are involved and when was the last contact with the students? Then, Donna must ensure that all parties have a clear and shared understanding of how each of those organizations is going to handle communications, who the contact is for each organization, and who will serve as the lead spokesperson to the media, families and public for all aspects of the story.

The advisors agree that this last role should not be Donna's, since Horizon is not the sponsor of the travel program, but merely a funder of it. (But if the Horizons grantee turns out to be the lead spokesperson, the advisors suggest that Donna may need to quickly decide whether the grantee is ready and able to do this—and perhaps offer some assistance.) All of the information on how the situation will be handled from now on needs to be communicated to Horizons' board and staff.

The foundation must make a clear statement. It is Horizons' name that is in the media. So, as a part of the larger damage control process, Donna should make a statement that establishes:

• what is known  
• who the various sponsoring and organizing parties are, including Horizons  
• what is being done to learn more  
• what the communication channels are.

This might be handled through holding a press conference with representatives of all the organizations present, or simply through calling the station and other interested media. A key aspect of this first response, say the advisors, is for Donna to communicate the Horizons message in a way that telegraphs the foundation's acute concern for all involved, and connects the risks and rewards of international and intercultural travel to the Horizons Foundation's mission and values.

The foundation must be at the ready. Once the above steps are taken, Donna needs to make sure that Horizons is prepared to do its own communications. Because the first news stories put Horizons in the lead, circumstances are probably going to keep pushing the foundation into the center of the story, as long as it lasts. Calls will come into the foundation from media, government agencies, students' families, other foundations and grantees. Donna needs to ensure that capable staff are selected and quickly oriented, so they are prepared to respond to all queries according to message and plan, and will keep her fully informed of what they're hearing.

Planning Ahead

That's a lot to do—and this is just Day One. But the advisors' main advice for Donna is for the future: Make sure that Horizons never again has multiple illinformed people circulating facts—or rumors—and making up the plan for responding to a crisis as they go.

First, cover the basics of media training: Who speaks for the foundation? What is the process for handling a reporter's call when you don't know the answer to the questions he or she is asking? How quickly must you return a reporter's call? What is the emergency plan for reaching Donna when she is traveling?

The advisors urge Horizons and every foundation to develop a comprehensive risk and crisis management plan. The key elements of their advice: Think through carefully (and periodically, because this is not a one-time exercise) where the foundation is vulnerable to risk and crisis, from externally triggered accidents and incidents to internal mistakes or malfeasance. Consider all of the possible vulnerabilities, and ask: What can and should we do to avoid risk altogether? How can we minimize risk or help contain it? How do we respond when a crisis occurs? Determine which staff member is responsible for assessing risk on an ongoing basis, and what training staff may need to respond in the ways prescribed by the plan. Translate this into a plan and policy, and then forward those to the board for their discussion and approval. (See "Lessons Learned," below, for some questions that can contribute to Horizons' plan.)

The advisors are both firm and passionate in saying that the aim of a wellrun foundation is not to avoid risk. To do so, they say, would be to default on the obligation to use a foundation's assets to their maximum potential to do good. But no foundation is insulated from risk or from the harm that can occur when risks turn into crises. And no foundation can responsibly operate without a plan for analyzing, minimizing and responding to risk.

Lessons Learned

To understand and manage the risks its grantmaking entails, the Horizons Foundation's board and senior staff should ask some hard questions:

• How do our mission and program focus expose us to risk and how do we think about the risk/reward trade-off?  
• How do we define our roles and responsibilities in situations where we provide funds for scholarships or other program support, but are not the program sponsor?  
• What level of experience do we expect from a grantee organization in order to qualify for foundation grants to support international travel?  
• What evidence should we require of our partners' abilities in risk prevention and management?  
• What information do we need to have in our office about the sponsors, participants or operators of any overseas experience we help to support?  
• What items should we have ready in a crisis response toolbox? (The advisors suggest a statement that ties Horizons' mission to the risks and rewards of international exchange for young people and an outline of the procedure Horizons follows in selecting and approving grantees who sponsor overseas travel for young people.)  
• In the event of an incident, who speaks for the foundation and how does that person access the information needed?

Leading and Managing Change

It's better to present choices than "answers."

"If my sister had ever imagined…" The Arbor Foundation's headquarters are on a large lot in a mid-sized city, with a grove of trees and a colorful perennial garden surrounding the building. The donor, who endowed the foundation and gave the property to it upon her death, had always expressed the hope that the garden would be maintained in perpetuity.

Maria is the Arbor Foundation's relatively new executive director. She was born in the community, which is no longer as grand as it was during the donor's childhood. Maria's appointment reflects the foundation's gradual journey toward a stronger commitment to serving the neighborhood's changing constituents.

The foundation is outgrowing the old house it occupies and plans to renovate the building. In response to Maria's leadership, the board is also considering adding a wing that will create space in which to hold community meetings. To Maria and her backers on the board, the new wing symbolizes the foundation's commitment to its emerging strategic plan. Building it, however, would entail eliminating most of the garden.

The deliberation process has been difficult for both Maria and the board. Supportive new members face opposition from a cadre of longtime board members, for whom the garden is an emblem of a more gracious time in the life of both the neighborhood and the foundation. This division is also present in the wider metropolitan area, as the donor was a generous and widely admired woman.

The most recent board discussion became very emotional when the donor's sister and two other members of the board charged that the building plan was "a deliberate and de facto breach of donor intent" and that it indicated that the foundation was heading in a "troubling and unpleasant direction." Because of the plan, those three members said, they felt compelled to resign from the board. The chair, trying to defuse the situation, suggested that they revisit the subject of the new wing in the next meeting.

Maria, who is shaken by the strong opposition to her vision for the foundation's renovation, wonders how she should proceed.

Accepting Change

In this brief story of change in the garden, our On-Point advisors see some of the most basic challenges in the early tenure of a CEO who is brought in to fast-forward a foundation into the present—or, in more organizational terms, to lead and manage change.

For a variety of reasons, say the advisors, boards arrive at conscious decisions to make their foundations "different," and more relevant to current circumstances and needs. This desire for strategic change is exactly why Arbor's trustees selected Maria, who came from the neighborhood and has community development experience, to replace the long-serving founding director. But even deliberately making this choice still leaves open the possibility, the advisors point out, that some members of the board will not have a well-defined sense of what "different" might mean—especially for something as emotionally central to them as the garden and the legacy of their sister and colleague.

Carefully chosen new leaders like Maria, on the other hand, may see the way forward as quite clear—so clear, in fact, say our advisors, that they easily fall victim to their own certainty. They may be confident of what their own life experience tells them, or unable to hear dissent or consider the merits of opposing viewpoints, or simply too quick to include donor intent in what needs to go. Should board/CEO communications break down, those new leaders can end up with quite a mess on their hands.

So Maria might have been hired to lead the way to a new future, but right now, notes one advisor, "she's got to focus on back-tracking to heal the wounds. And it's going to be much more difficult and time-consuming than it would have been to address this problem of the garden as part of the initial planning process." But, says our group, "This will be a good growing-up opportunity for Maria . . . and a good time to demonstrate both stamina and problem-solving ability."

Assessing Support

First, the advisors suggest that Maria, acting with her board chair, needs to make a judgment call. The advisors concur with the chair on the wisdom of postponing the conversation at the last meeting. Now, they say, Maria and the chair should put to good use the time before the next board meeting. They must conduct a level-headed assessment of where they are, and how entrenched in their positions the three opposition members are (as opposed to simply having their feathers ruffled). Is there more support on the board for the opposing point of view that hasn't surfaced yet? Are there any options not yet considered that would save the garden while allowing the foundation to move forward? How much support will the opposition have in the neighborhood and in the broader community?

Maria and the chair either need to put the building plan on hold, and make that decision known to both the board and broader community, or they need to keep going forward with some serious mid-course corrections. Making that call will determine what happens next at the Arbor Foundation.

Then, Maria—still in close concert with her chair—must focus on several things quickly, and more or less all at once:

Damage control. The most urgent need is mending the rift with the sister and the two other dissenting board members. As our On-Point team sees it, "The burden is on Maria and the chair to find a win-win solution, and, if desirable, persuade the three that they want to remain on the board." The advisors recommend that either Maria and the chair, or just the chair, meet individually with each of the three dissenting members. Whoever goes to the meetings needs to listen and perhaps do some backpedaling.

It's possible, says one advisor, "that the donor's sister has voiced discontent all along about both the foundation's direction and the decision to build the new wing—and has not gotten a good or respectful response." The legitimacy of the dissenters' position must be acknowledged. When that's been done, it may be possible to restore relations—or it may be time to graciously accept the resignations, and move on. (Before leaving the damage control topic, Maria needs also to pay some attention to her staff, letting them know what has happened and what course of action she is pursuing. She should ask for their support and let them know not to expect much attention from her until the issue is resolved.)

More respect for donor intent. Maria needs to show she takes the concerns of the dissenting board members seriously. Donor intent is a hugely emotional issue in foundations, say the advisors, especially for members of the donor family. Even for those not related to the donor, the deep and important principles at stake don't totally disappear, even if—as with the garden in this case—there is no legally binding document mandating their preservation. It's probably too late for Maria to do what she should have done at the outset (listen carefully to the surviving sister and others on the board with whom she is close, and seek out others in the community who knew the donor to try to learn about her interests and her possible views on the changing nature of her neighborhood). But she still may be able—especially when she has more community input, as described below—to engage the board in a thoughtful conversation about how the donor might have responded to the challenges and opportunities facing Arbor in its strategic planning process.

More input from the community. Either there hasn't been enough listening, fact finding, and involvement with the broader community, or results of those efforts haven't been incorporated in the board conversations. Maria needs to marshal more information, both about the use of the garden and about the community's need for and interest in the proposed facility. Did the donor intend the garden to be visited? Is it visited? If so, by whom, and what's the pattern of usage? Where else in the neighborhood are there parks and open space? Does the community think there are better uses of the space than constructing a building on it? How is the garden viewed by the city and neighborhood leaders—do they see a building on that site as better for community life than a garden? Or is the garden a key factor in their sense of community revitalization? How intense is the need for meeting space? What kind of space is needed, and where?

Better options. "It doesn't sound to me as if all the options have been considered yet," says one advisor, noting that both board discussions and difficult deliberations generally go better if a CEO presents choices, rather than "the answer." "It's as though they are saying 'either we need to build a building on this garden…or we have to stay locked in the past.'"

In fact, the advisors see Maria and the majority members of the board as perhaps too easily swayed by a desire to do away with the garden, to "prove" to the community that the foundation understands change and is ready to embrace it. What about buying an adjacent building, say the advisors? Or finding a different building elsewhere in the neighborhood that could provide meeting space?

Maria had a clear vision of strategic change for the Arbor Foundation. But she let the issue become preserving or destroying the garden, instead of the expanded role of the foundation. Armed with a better assessment of community needs and trustee concerns, Maria is ready, say the advisors, to re-launch a deliberative change process.

Board Chair and CEO: Partners in Change

Maria was hired by the Arbor Foundation to be a change agent. She and the board chair were comfortable with each other, and the chair fully supported the new directions in which she proposed moving. Because of who Maria was, the chair and most of the rest of the board assumed that she had all the skills and answers she needed. But to bring her ideas to a grounded conclusion that all board members could support, Maria needed the balance and perspective of her board, and the vigorous, steady-handed leadership of her chair.

Where Maria most needed help from her board chair was as a "partner in change," someone to help her:

• understand the legacy issues  
• master the process and timetable of board deliberation  
• map the yeas and nays  
• give full consideration to other options  
• double-check her belief that she knew what the community wanted and needed.

Conceptualized by Council on Foundations Senior Vice President for Professional Development Joanne Scanlan and Management Consultant Marcia Sharp, On-Point is part of the Council's Senior Advisor Program, supported through funding by Council members. The program makes seasoned foundation leaders available as pro bono consultants to Council member foundations. Current advisors include Phillip Hallen, Reatha Clark King, Handy Lindsey, Skip Rhodes, Robin Tryloff, Cole Wilbur and Eugene Wilson. The On-Point series is written by Marcia Sharp. To learn more about the program and see the biographies of the advisors, visit the Council's website (www.cof.org/senioradvisors). To explore having an advisor come to work with your foundation on executive transitions or CEO job development, or to discuss other Council resources for executive hiring, contact Joanne Scanlan at scanj@cof.org or 202/467-0475.

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