Nonprofit Governance: Coronavirus and COVID-19

Nonprofits must recognize and manage the impact of the coronavirus and associated disease known as COVID-19 that has created great concern and fear for an ill-prepared and under-educated country and world. Quarantines, canceled conferences and events, staggering drops in economic markets, deserted public spaces, self-isolation, and social distancing are all eye-opening impacts we’ve increasingly seen in the past couple of weeks. This should prompt nonprofit directors to start asking questions about how all of this will affect their organizations, beneficiaries, employees and volunteers, work cultures, programs, fundraising, events, meetings, businesses, investments, governance, management, and operations. And more importantly how will their organizations adapt consistent with their missions, values, and sustainability.

Fiduciary Duties

The board of directors of a nonprofit is ultimately responsible for the activities and affairs of the nonprofit and the exercise of all corporate powers. A board may delegate management of the day-to-day operations to officers, committees, employees, or a management company, but it may not delegate its oversight responsibility or its function to govern. And when it delegates authority and power, the board must do so with reasonable care.

For nonprofits with employees, the roles of the board are to direct, oversee, and protect. Direction is provided through mission, vision, and values statements; plans; policies; budgets; specific directives; and responsible leadership. Oversight involves reviews of executive performance, financials, audits, programmatic impact, and compliance. And protection of charitable assets is accomplished by appropriate risk management, including internal controls and insurance, and strategic decision-making.

Directors are subject to two fiduciary duties in carrying out their governance responsibilities:  the duty of care and the duty of loyalty.

Meeting a director’s duty of care generally requires acting in a reasonable and informed manner under the given circumstances.  The standard of care is typically expressed as that which “an ordinarily prudent person in a like position would use under similar circumstances.” The circumstances now are substantially different from last month, and each director must consider how that changes the care and attention an ordinarily prudent director would provide to their organization. While director liability for gross negligence may be rare, the risk may be significant if, for example, the disease spreads within the nonprofit’s facilities or event site due to inattention and inaction of the board, particularly if the nonprofit seems to be an outlier in its management of the crisis.

Meeting a director’s duty of loyalty generally requires acting in good faith and in the best interests of the corporation. The key to meeting this duty is to place the interests of the corporation before the director’s own interests or the interests of another person or entity. This does not, however, mean that furthering the mission in the short-term is more important than protecting employees, acting consistent with the organization’s values, and helping to assure the sustainability of the organization. Balancing these sometimes competing interests is one of the difficult challenges of a director.


Consider the guidance provided by the Centers for Disease Control and Prevention (CDC): Interim Guidance for Businesses and Employers. Recommended strategies for employers to implement now:

  • Actively encourage sick employees to stay home
  • Separate sick employees
  • Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees
  • Perform routine environmental cleaning
  • Advise employees before traveling to take certain steps

Consider flexible work arrangements allowing workers to work from home where possible (but remember not every employee may have resources necessary to work from home and equity issues should be considered). TechSoup provides some suggestions: Nonprofit Resources for Remote Work During the COVID-19 Outbreak. And if you’re not offering sick leave, or encouraging workers who are sick to stay home, make this an immediate priority.

Consider canceling or postponing events and meetings or making them virtual. Check whether you have applicable cancellation insurance.

For mass gatherings, review the WHO key planning recommendations (download) and the CDC interim guidance. Among the CDC’s recommendations before an outbreak:

  • Meet with the emergency operations coordinator or planning team at your venues
  • Establish relationships with key community partners and stakeholders
  • Promote the daily practice of everyday preventive actions
  • Provide COVID-19 prevention supplies at your events
  • Plan for staff absences
  • Promote messages that discourage people who are sick from attending events
  • If possible, identify a space that can be used to isolate staff or participants who become ill at the event
  • Plan ways to limit in-person contact for staff supporting your events
  • Develop flexible refund policies for participants
  • Identify actions to take if you need to postpone or cancel events
  • Update and distribute timely and accurate emergency communication information
  • Identify and address potential language, cultural, and disability barriers associated with communicating COVID-19 information to event staff and participants

Advocate for more support from your funders. Consider asking them for additional funding to address the crisis, a modification changing restricted funds to unrestricted funds, and/or relaxed reporting requirements. And have them read Vu Le: A few things for nonprofits and foundations to consider in light of the Coronavirus (NonprofitAF). And Antony Bugg-Levine’s Opinion in The Chronicle of Philanthropy: 6 Steps for Grant Makers to Take Now to Ensure Nonprofits Recover From Coronavirus Spread.

Advocate for changes in the law and internal policies that would help prevent adverse impacts to your organization, your beneficiaries, and your employees and volunteers. Of course, recognize what is permissible for your organization (lobbying limits for public charities may be much greater than you think, especially if you’ve made the super simple 501(h) election, and much of advocacy isn’t even lobbying).

Background Information

Coronaviruses are a large family of viruses, several of which are known to cause respiratory infections ranging from the common cold to more severe diseases. The latest discovered strain causes the infectious coronavirus disease COVID-19.

According to the World Health Organization (WHO):

The most common symptoms of COVID-19 are fever, tiredness, and dry cough. Some patients may have aches and pains, nasal congestion, runny nose, sore throat or diarrhea. These symptoms are usually mild and begin gradually. Some people become infected but don’t develop any symptoms and don’t feel unwell. Most people (about 80%) recover from the disease without needing special treatment. Around 1 out of every 6 people who gets COVID-19 becomes seriously ill and develops difficulty breathing. Older people, and those with underlying medical problems like high blood pressure, heart problems or diabetes, are more likely to develop serious illness. People with fever, cough and difficulty breathing should seek medical attention.

People can catch COVID-19 from others who have the virus. The disease can spread from person to person through small droplets from the nose or mouth which are spread when a person with COVID-19 coughs or exhales. These droplets land on objects and surfaces around the person. Other people then catch COVID-19 by touching these objects or surfaces, then touching their eyes, nose or mouth. People can also catch COVID-19 if they breathe in droplets from a person with COVID-19 who coughs out or exhales droplets. This is why it is important to stay more than 1 meter (3 feet) away from a person who is sick.

Studies to date suggest that the virus that causes COVID-19 is mainly transmitted through contact with respiratory droplets rather than through the air. 

You can reduce your chances of being infected or spreading COVID-19 by taking some simple precautions:

* Regularly and thoroughly clean your hands with an alcohol-based hand rub or wash them with soap and water.
Why? Washing your hands with soap and water or using alcohol-based hand rub kills viruses that may be on your hands.

* Maintain at least 1 metre (3 feet) distance between yourself and anyone who is coughing or sneezing.
Why? When someone coughs or sneezes they spray small liquid droplets from their nose or mouth which may contain virus. If you are too close, you can breathe in the droplets, including the COVID-19 virus if the person coughing has the disease.

* Avoid touching eyes, nose and mouth.
Why? Hands touch many surfaces and can pick up viruses. Once contaminated, hands can transfer the virus to your eyes, nose or mouth. From there, the virus can enter your body and can make you sick.

* Make sure you, and the people around you, follow good respiratory hygiene. This means covering your mouth and nose with your bent elbow or tissue when you cough or sneeze. Then dispose of the used tissue immediately.
Why? Droplets spread virus. By following good respiratory hygiene you protect the people around you from viruses such as cold, flu and COVID-19.

* Stay home if you feel unwell. If you have a fever, cough and difficulty breathing, seek medical attention and call in advance. Follow the directions of your local health authority.
Why? National and local authorities will have the most up to date information on the situation in your area. Calling in advance will allow your health care provider to quickly direct you to the right health facility. This will also protect you and help prevent spread of viruses and other infections.

* Keep up to date on the latest COVID-19 hotspots (cities or local areas where COVID-19 is spreading widely). If possible, avoid traveling to places  – especially if you are an older person or have diabetes, heart or lung disease.
Why? You have a higher chance of catching COVID-19 in one of these areas.

Additional Resources (Update 3/14/20)

Online Interactive Dashboard (Johns Hopkins University)

How Much Worse the Coronavirus Could Get, in Charts – NY Times (Opinion)

Coronavirus and Nonprofits: Challenges & Resources – For Purpose Law Group

What Your Nonprofit Can Do Now to Reduce Risks Relating to COVID-19 (Coronavirus) and Coronavirus Nonprofit Risk Page – RiskAlternatives

Help for Nonprofits During the Coronavirus and Uncertain Economic Times – Chronicle of Philanthropy [Ed. Subscription paywalls appear to have been lifted for multiple stories from the Chronicle.]