Why does a charity need a crisis checklist and what should be in it?
A crisis checklist gives trustees and senior leaders a structured, stabilising tool at the moment when clarity is hardest to find. It helps leaders spot early warning signs and react to major problems such as repeated deficits, cashflow pressures, shrinking reserves, high staff turnover, or reputational damage.
This checklist is based on Eastside People’s experience advising an ever-growing number of clients who are experiencing major difficulties and includes personal insights from a group of Chairs and CEOs who have led their charities through challenging periods.
Examples why a charity might find itself in crisis and need external help include:
- Deterioration in finances: Experiencing repeated or unexplained deficits, shrinking reserves and cash‑flow problems.
- Operational strain: High turnover among senior staff or loss of key roles due to a need for redundancies can reduce organisational stability and decision-making capacity.
- Hostile external environment: Significant contract losses, reductions in fundraising income, cuts in funder grants or sudden adverse shifts in commissioning environments.
- Repeated failures to act: Long-standing trustees or one-sided board-executive relationships can perpetuate attitudes of blind faith in the organization’s resilience resulting in repeated failure to address recurring warning signs and funding gaps.
- Regulatory overload: Increasing regulation such as the new Charity Statement of Recommended Practice (SORP) requirements, the updated Charity Governance Code and the Data Use and Access rules become a crisis when red flag risks occur eroding trust in the charity and putting unreasonable stress on senior leaders and trustees.
Quote: “Trustees and leaders often hold on to what the organisation used to be — when it was better funded, more stable, more successful — but that nostalgia can be incredibly dangerous. You’ve got to take the ego out of it and deal with what’s in front of you now.” [Chair of an award-winning environmental charity].
Here is your charity crisis checklist:
A crisis checklist gives trustees and senior leaders a structured, stabilising tool at the moment when clarity is hardest to find by:
- Clarifying boundaries and decision-making
- Keeping everyone focused on the right actions in the right order
- Helping boards avoid paralysis or knee‑jerk decision making
- Providing a documented approach that supports good governance and accountability.
1. Spot the early warning signs of potential crisis
Why do you need to do this?
Most charity crises are not sudden shocks, but the result of warning signs that are visible months or even years ahead. Time is the secret juice – the more you have of it, the more room for manoeuvre.
What should you look for?
- Unexplained or repeated deficits from year to year
- Cashflow pressures, shrinking reserves, or delayed payments
- High turnover or absence among senior staff
- Rising complaints, safeguarding issues, or quality concerns
- A breakdown in Board–executive relationships.
Quote: “For us, it was a real ‘wake up and smell the coffee’ moment. Things hadn’t suddenly gone wrong — they’d been drifting for years — and people had become too comfortable with the ups and downs.” [Chair of an award-winning environmental charity]
2. Get on top of your charity’s numbers
Why do you need to do this?
Clear, timely and trusted financial information enable boards to understand problems shifting discussions from being based on emotions to informed and evidence-based. The numbers will change and so regular reliable updates are important.
Key actions:
- Get to a clear single-truth about the financial position
- Build a cashflow forecast for the next 13 weeks including reserves and liabilities
- Understand the profitability of each service/project
- Set a clear timeline on what needs to happen, by when.
“When I arrived, managers told me they hadn’t had management accounts for several years. That meant nobody really knew what was going on. Without that basic information, you’re not managing a problem, you’re just hoping it will go away.” [Ex-CEO who managed an orderly closure of a social care charity].
3. Strengthen Board-Executive Working
Why do you need this?
Crisis conditions fundamentally change the nature of governance, requiring sharper roles, faster communication and a higher level of mutual trust between board and executive.
Key actions:
- Set clear roles and boundaries
- Agree principles how decisions will be made and documented
- Increase frequency of Board–executive communication
- CEO focuses on Plan A while Board focuses on Plan B.
Read our blogs about Getting the most from your charity’s board meetings and How to build brilliant board behaviours.
“All trustees have to be prepared to roll up their sleeves in a crisis. You can’t just sit back and ‘govern’ from a distance” [Chair of an award-winning environmental charity].
4. Have honest, open conversations
Why do you need this?
Avoiding difficult conversations creates false reassurance, whereas clarity — even when uncomfortable — gives staff and other stakeholders confidence that the situation is being handled responsibly.
Key actions:
- Encourage honest, blame-free discussion
- Document key discussions and decisions
- Create a space for key leaders to check in regularly.
Quote: “We agreed it might be sensible for the Chair, CEO and a third trustee to meet regularly. Three was not a crowd for us but helped us to behave properly, speaking a common language, and looking after each other.” [Chair of £3m turnover place-based charity].
5. Develop different options (Plan A, Plan B…)
Why do you need this?
A single recovery plan places all eggs in one basket. On the other hand, developing credible alternatives helps boards to act as circumstances change. Clear lines of responsibility and trigger points for when to move from Plan A to Plan B should be agreed.
Key actions:
- Take the ego out of discussions with no option off the table
- Option A is often about restructuring or cost reduction
- Option B is often about exploring merger, partnership or shared service options
- Managed closure can also be considered as an possible option.
Quote: “Success began to look very different ensuring a viable continued provision of services to the community rather than the charity continuing to do what it was doing.” [Chair of £3m place-based charity].
6. Proactively manage stakeholder relationships
Why do you need this?
Silence or delay allows rumours to fill the gap, damaging trust with staff, funders, partners and regulators at precisely the moment it matters most.
Key actions:
- Agree key messages for each of your stakeholder groups
- Speak with funders and partners appropriately and early in the process
- Communicate transparently with staff
- Consider the impact on beneficiaries and service users.
Quote: “One of the biggest risks is letting silence creep in. If you’re not clear and honest with people, they fill the gaps themselves” [Chair of £3m place-based charity].
7. Take care of your people
Why do you need this?
Organisational distress places extraordinary emotional pressure on staff, leaders and trustees. We have a moral duty of care but it’s also pragmatic strengthening morale and collective action towards a focused goal.
Key actions:
- Take the opportunity to communicate transparently with staff to keep them onside
- Provide check-ins for the leadership team as well
- Support board members and service users with lived
- Work with recruiters to offer pathways for people being made redundant.
Quote: “The hardest part wasn’t the numbers — it was the people. We had trustees and service users with learning disabilities who were being asked to process the idea that the organisation which had supported them, sometimes for most of their lives, was coming to an end. That meant slowing everything down, explaining things differently, and bringing in extra support for them” [Ex-CEO who managed an orderly closure of a social care charity].
8. Seek external help
Why do you need this?
Independent expertise brings objectivity, professional insight, pace and reassurance at a time when internal capacity is stretched and perspectives can become too narrow.
Key actions:
- Identify what type of crisis, turnaround or legal support you need and commission it directly for/from the Board
- Make sure someone with a strong financial background understands and reviews the numbers giving you an independent expert view
- Take a dispassionate view on merger options – you might be surprised about what is possible!
- Seek free and low-cost resources whether from ourselves, our partners at Decelerator or others.
Quote: “We tried to do this ourselves for a long time, alongside day jobs, and it just wasn’t working. When we finally brought in independent support, things moved much more quickly and much more smoothly.” [Chair of a £3m place-based charity].
9. Capture learning once the crisis has stabilised
Why do you need this?
Reflecting on what happened — and why — strengthens future governance, reduces the risk of repeat crises, and allows hard‑won lessons to benefit the wider sector.
Key actions:
- Clarify statutory and regulatory obligations
- Review what worked well and what could be improved
- Refresh Board skills and clarify where roles and responsibilities are needed for the future
- Share learning with the wider sector.
Blog by Eastside People Chief Executive, Richard Litchfield.
