What are you protecting when a crisis hits? Ultimately its your reputation – your brand reputation. Generally speaking, when your brand reputation takes a hit, so does your business. But in the case of not-for-profit organizations, this goes even further, and can have an even more potentially devastating impact.
Arguably, in the private/for profit sector, if one company (or product) falters another one will fill the gap. Yes, jobs will be lost, but the product or service being provided to customers will most likely be replaced by a competitor or new market player – that’s simply the dynamic of the private sector at play.
However, in the not-for-profit sector I would argue that the outcome and impact are different. As a point of reference, Good to Great author Jim Collins states in Good to Great and the Social Sectors: “The whole purpose of the social sectors is to meet social objectives, human needs and national priorities that cannot be priced at a profit.” If you agree with the premise that not-for-profits exist to do good for society, and fill a need that is not being met by the private sector, then you can understand how the impact would arguably be more “devastating”. I say devastating because if a not-for-profit’s reputation suffers as a result of a crisis, and the organization falters, donor dollars (and other types of support) – on which not-for-profits rely – could potentially dwindle. In the end, who really suffers are those who benefit from the work of the cause – the impact of the cause is put at risk. And, because unlike in the private sector, there are generally not other competitors or new market entrants who can easily jump in to replace the “good work” that has disappeared, society is left with a critical void in relation to what could be a significant unmet need.
I think what this points out is that not-for-profits have a lot more at risk when protecting and promoting their brand reputations. They have to be diligent in building, promoting and protecting their brands. And that’s also why crisis management and communications (and simply good management) is so important for this sector. These organizations have so much more to lose, because their cause suffers – and in the end that matters more than any old product or service, doesn’t it?