New “endings” hotline to help the social sector with closures, insolvency and succession

A new hotline service will support Canadian social purpose groups as they navigate organizational and programmatic closures, insolvency, succession planning, mergers, board changes, and other types of “endings”. 

The Ever / Was collective of navigators has drawn inspiration from similar work that took place in the UK under The Decelerator Hotline. The Ever / Was hotline opened in early June, inviting 25 charity, non-profit, faith-based, and philanthropic leaders based in Canada to participate in a confidential call if they are navigating an ending. 

Endings and closures can impact staff, leaders and the communities receiving an organization’s services, collective members said. Central to the collective’s ethos is the idea that the social purpose sector often carries significant shame and stigma around closures. Instead, the 10 collective members want to “normalize endings as part of the regenerative cycle.”

Executive directors of social purpose organizations can often see – financially or otherwise – that an ending is on the horizon, said Adam Lerner, founder of social innovation consultancy Solvable and collective member at Ever / Was. But the stigma around speaking candidly about endings prevents leaders from accepting that reality. 

Other collective members described the typical approach to an ending as traumatic and manic. Several used the phrase “life support” to describe the stage an organization reaches, in which its ongoing operations are nearing closure but leaders are doing everything possible to keep it afloat. 

“We perceive our work to be to try to keep the thing alive for as long as it possibly needs to be alive, at any cost, with any amount of resource, because we’re coached culturally and within the sector to really perceive closures as a kind of failure,” said collective member Syma Habib, who also serves as a food resilience specialist with the City of Calgary. 

She added that the sector needs to pursue “psychological safety” to talk about endings. 

The hotline, currently open to Canadian organizations, is intended as a pilot program and an opportunity to collect data, after which the collective will be seeking funding from the philanthropic sector. 

Are we experiencing an influx of endings?

“Organizations facing an ending have nowhere to go, nowhere to call, that isn’t a lawyer or an insolvency trustee, unless they know other organizations who are going through it or who have before,” said Vanessa Reid, a collective member at Ever / Was. 

“It can be very isolating.

Reid, who runs the Living Wholeness Institute, previously published ascent magazine, a non-profit which closed in 2009. At the time, in the depths of the financial crisis, Reid saw many casualties of the downturn in the non-profit sector, including many cuts.  

“The sector at that time didn’t have language or infrastructure for endings,” she said. “And even though we said the causes were financial, it was part of what we’re experiencing now, which we now call the polycrisis or the metacrisis.”

Closures running through the sector now, or those that are anticipated, might also be down to a “climate of austerity,” she said.

Not only are social purpose organizations faced with compounding pressures, but financial support is also declining significantly, Lerner has found. In addition, many organizations are operating with annual revenues that are under a million dollars – many under $250,000 – leading to inherent unsustainability, he said. 

“Unless you work with somebody like MakeWay on the shared services platform, the costs of running your organization are so significant that you’re going to experience incredible strain,” he said. 

Collective members pointed to various additional challenges, including moves towards privatization at the government level and philanthropic funders scaling up capacity in a particular part of the sector, only to then pull out years later for strategic reasons. According to Lerner, while this is a legitimate practice, it feels like “the cliff eroding from underneath” for many organizations that are reliant on philanthropic funding. 

Funding instability has ripple effects across entire sub-sectors, Lerner said. “All of the organizations that are serving the same [social] need, they will say that this is acute and they can name – they will actually list – a roster of organizations that they know are very close to closing or have recently closed.” 

Grassroots organizations that have sprung up to respond to a specific, often local, need are not only more at risk of closure but also lack the resources to navigate endings, Habib added. 

“These small seedings, where there are actually a lot of opportunities for transformative, innovative potential, are not often able to grow to become a more established plant in the ecosystem, if you will, and instead the ones that are more established tend to grow different roots.”

Policy change, cultural change, and the changing needs of a community can also be signals of an ending, said collective member Hima Batavia, a co-founder and current board member of Reset. 

The stigma around closures, coupled with a lack of knowledge about processes, can mean the effects of certain issues in an organization can compound, Lerner said. 

“What might have been a programmatic crisis around funding a programme eventually can become something that is challenging the organizational liability, because it becomes so significant over time. 

In an attempt to save an organization, leaders also often turn to developing new programmes, focus areas, and revenue channels that can move the organization beyond its original mission or scope, Batavia added. 

The navigators said that processes around staff termination, archiving physical and digital documentation, and financial and programmatic commitments to funders are important to a healthy ending or closure. 

An organization that is closing needs “a clear mandate and a timeline. […] It needs a budget for the people inside the organization, not just the wind-down of the organization, because people are going to be losing their jobs,” Reid added. 

In a research report shared with Future of Good, interviewees also flagged risks to physical and community assets, as well as “institutional memory, relationships, networks and community trust [that] are dissolving without transfer.”

Beyond the legal and logistical checklists, Reid also emphasizes the importance of addressing the deep emotional, grieving effects of organizational closures, which might include a celebration and honouring of the organization’s achievements.