July 7, 2019; Oregonian
When Britt Carlson Oase moved from Minnesota to take the position of CEO of Special Olympics Oregon last year, she was faced with the kind of situation of which nightmares are made. After having worked for both the NFL’s Vikings and the NBA’s Timberwolves in a number of positions, she was suddenly at the helm of an organization adrift—and sinking fast.
Lori Van Dyke came in as the new CFO around the same time, and she had news to share—no cash was expected in the short term, $1.5 million was owed to vendors, and the organization was in default on a $1 million line of credit.
The board half expected the new team would simply call it quits.
“Britt moved here to find there was no money and that her position was probably at risk, that the entire organization was probably at risk,” said former Oregon governor Barbara Roberts. “That was not a fun arrival party.”
But from Oase’s vantage point, it did not feel like the organization was in trouble—only its finances, a distinction she saw as important. She started by cutting costs, including cancelling the Summer Games and moving to a less fancy office, but the precariousness of the precipice was too steep to ignore. This led Oase to be open about the fact that the organization could not use the grant Nike was about to hand it.
The grant was restricted, and what Special Olympics Oregon needed was operating money. Nike agreed, and the new CEO and CFO followed up by cutting their own salaries by 10 percent and laying off more than half of their 23 employees.
After cancelling the Games, they took to the road to feel the fallout from “hostile,” “furious” stakeholders, especially once they started warning them that more cancellations might be necessary. Ed Ray, a board member, called the effort “the disappointment tour.” Ray admitted to being “blissfully unaware” of the nonprofit’s deteriorating financial condition, but that led him to accept the nomination for board chair, from which position he commissioned a forensic audit.
In the end, says Oase, the organization lost fundraising momentum and expense control at the same time and dug itself a ditch. After that, though, she said it was simply a matter of playing the cards that were dealt. The organization went to local supporters in the business community, including longtime donor Ken Austin, and the community foundation and developed a plan.
At first, they had to beg two local families for funds sufficient to make payroll for a few months. Then, a donor group stepped forward with a monthly allotment. Then, “a who’s-who of the donor class got involved.” The group continued to cancel events, risking the ire of its members, until this winter’s polar plunge, at which a record 2,700 people took a dip in the freezing waters of the state—raising $350,000 in the process.
Then came the next chapter. Though some debts were forgiven, $1 million in bank debt remained. Austin made the bank a proposition: If it would forgive $500,000 of the loan, Austin would pay off the balance. The bank accepted, meaning that instead of owing a bank nearly 900 miles away, Special Olympics owed Austin, the nonprofit’s most enthusiastic supporter. And then, in the face of declining health and at the recommendation of one of his senior executives, Brett Baker, Austin made one last gesture: He agreed to forgive the $490,000 debt.
“There was no hesitation,” Baker said. “He knew he didn’t have long. And he just loved Special Olympics.” On April 18th, twelve days later, he died.
Although this epic story is heroic, it may feel as familiar to you as it does to me. What struck me about it was Oase’s observation that while the finances of the organization were in trouble, the organization was not. It’s perhaps a strange conclusion to come to in these days of managerialist thinking, but one very on the mark.
It speaks to the fact there are a number of sources of nonprofit capital besides cash that nonprofits can access to build their capacity. Oase and Ray recognized their organization’s asset base was in its community. Restoring that base and those constituents would take a process of enrolling support, step by painful step. And that would mean being honest.
The other notable element of this story, of course, is in the shared responsibility taken by board and staff, and then the community, for the rebuild.
As a final note, we want to thank Jeff Manning for his reporting of the story, which avoided many of the usual tropes and focused on how the organization handled its own turnaround.—Ruth McCambridge