CEO Update: The Mountaineers Response to COVID-19

It’s hard to believe that almost exactly a month ago I was on the phone with Mitsu Iwasaki, my counterpart and the Executive Director of the Mazamas, discussing their response to a relatively new thing called the novel coronavirus. The Mazamas were issuing new guidance on best practices for hygiene in groups, and Mitsu kindly let The Mountaineers borrow his language for our first public post on COVID-19. The message at that time was essentially, ‘don’t panic and be sure to wash your hands frequently’. An incredible amount has changed since then.

As we’ve watched our lives and our business get turned upside down, one thing has remained constant in every conversation and decision making process: the health, safety, and well-being of our community and staff. Our hearts go out to everyone impacted by this global pandemic, and I am grateful to all of you for the personal sacrifices you’ve made to help “flatten the curve.”

We have been receiving many inquiries and kind notes of concern, and I want to let you know how things are going at The Mountaineers. At the outset of this pandemic we committed to following four guiding principles, and in honor of that commitment I hope to give you as much transparency as possible into the decisions we’ve made to date and how we’re navigating the months ahead.

Timeline

We published our first blog on February 28 sharing best practices on handwashing and general hygiene. On March 4, King County issued new guidance and we responded by cancelling some events, moving what we could to online formats, and developing a decision making rubric for our volunteer leaders. By March 11, we had cancelled a number of classes, rescheduled our annual fundraising gala, and began issuing refunds for cancellations. All staff were subsequently encouraged to work from home if they were able. Just four days later on March 15, we suspended all in-person programming until April 24, and began shutting down our facilities. By the time Governor Inslee issued a Stay Home, Stay Healthy order on March 23, nearly all of our employees were working from home, our lodges and program centers had closed, and orders for Mountaineers Books had declined to a slow crawl as retailers closed. In three short weeks we experienced a near-total shutdown of our mission-filling programs and operations.

For a more detailed timeline of our response, please read our Coronavirus blog.

Forecasted impact

Throughout this response, our leadership team worked in partnership with the Board of Directors, Finance Committee, and Risk Management Committee to make sure we were taking a measured approach while protecting the interests of members, volunteers, and staff. Together, we built cash flow and scenario planning models. Because of the near-total shutdown of programs, our near-term revenues from operations fell to nearly zero. As we forecasted the likely cash flow trajectory in the coming months we concluded that without rapid intervention, we would run out of operating cash by the end of May. This included all operating reserves, but excluded other assets like buildings, inventory, and the long-term building fund.

Prior to the COVID-19 crisis we were on track to meet our break-even budget for the year and our operating reserves were lean but in line with our approved budget. Thanks to careful planning, prudent fiscal management, organizational success, and the unwavering support of our community and donors over many years, we had sufficient reserves for most normal disruptions such as a recession, natural disaster, or interruption of part of our operation. It's not an exaggeration to say that the impact of the COVID-19 crisis has far exceeded anything any of us have experienced in our lifetimes.

With relatively high monthly fixed expenses supporting programs, and a substantial drop in revenue – roughly $300,000 in course refunds due to cancellations, $300,000 in delayed donations due to rescheduling the gala, hundreds of thousands of dollars in lost book sales, and a projected membership and events revenue loss of up to $150,000 – taking immediate action was necessary. In conversations with my peers at other outdoor education and conservation nonprofits, most are facing similar, urgent challenges – especially organizations who depend on program revenues to support their operating budgets.

Response Strategy

We quickly launched a response strategy to help us flatten the financial curve to internally preserve our cash balances with a goal of sustaining operations through the summer and into the fall. The response design called for aggressive implementation of creative revenue-generating ideas and immediately limiting expenses to the most essential things. We also began evaluating liquidity options such as a recently announced emergency grant and loan program through the Small Business Administration to provide near-term financial resiliency and to protect our long-term sustainability. We did all of these things through a lens of protecting our core operations, advancing our mission, and nurturing our future to the greatest extent possible.

From a practical standpoint, some of the most critical near-term actions we put into motion include:

• Transitioning staff who were directly impacted by shutting down operations to short-term furloughs called “standbys”
• Putting recruiting on hold for two open/approved staff roles
• Making the difficult decision to permanently eliminate two full time positions
• Rescheduling our annual gala, and launching a virtual gala campaign to re-capture springtime donor support
• Applying for rent relief from the Port of Seattle and City of Seattle
• Exploring reductions for our summer magazine
• Pausing Mountaineers Books reprint quantities
• Applying for the SBA Economic Injury Disaster Loan Program (EIDL) and grant
• Applying for the Working Washington Small Business Grant
• Advocating for additional relief with state and federal legislators
• Closely following new relief programs that can benefit staff and/or The Mountaineers

Implications for staff

We are now in a position where we must focus on the most critical activities to preserve operating cash while doing everything we can to protect jobs and to ensure our ability to quickly restart operations when it is safe to do so. Practically, this means some staff have gone on immediate “standby” – a special designation through Washington Employment Security Division that assures staff can still receive their Mountaineers benefits while earning unemployment benefits without having to look for another job. This will allow us to preserve cash and to allow staff to access new emergency funding through the state and authorized by the federal CARES act (for example, a $600/week benefit you might have heard about.) The decision to temporarily layoff some members of staff was agonizing, and it’s our hope to get them back to work as soon as possible. Unfortunately, we also made the decision to eliminate two full time staff positions as well.

It is our sincere hope that individuals on standby will be able to remain as “whole” as possible financially by accessing relief programs. By putting them on standby, we are able to continue to offer healthcare and retirement benefits. Staff on standby are also continuing to accrue vacation and sick time. We continue to work on providing as much information as possible about state and federal benefits available to staff on standby. Those individuals who were permanently laid off received a severance package as well as benefits through the end of the month, and will be eligible for full unemployment benefits.

We sought to follow a consistent, equitable approach when assigning standbys. We recognized that it wasn't best to apply a “one size fits all” approach, and we are seeking to balance the most critical needs of our mission and what's best for each employee with the financial realities of this crisis. 

When determining who would go on standby in a given week, we assessed each staff member’s role individually. Currently, staff members identified for standby serve in roles mostly tied to programs which have shut down temporarily (for example, our youth programs), but we anticipate many of our staff will need to go on standby at some point. The exception is critical roles that cannot easily be paused and restarted. Whenever possible, we are staggering standby weeks to reduce disruptions for members and volunteers and to keep staff engaged. Looking ahead, we are evaluating if it's possible for some staff members to work part time and still receive standby benefits.

The months ahead

Based on the latest guidance from lawmakers and public health officials, we expect that our operations are likely to remain largely shut down until at least April 30. In the coming weeks we expect to have a clearer picture of how operations are likely to resume this summer and our near-term financial outdook. We should also know soon how much aid relief we have qualified for and whether new programs may help us weather this crisis. 

We are evaluating the latest information available to us on a daily basis, and will bring staff back to work and resume programming as soon as we can. We remain committed to doing everything possible to make the best decisions for the sustainability of The Mountaineers community and the needs of staff.

Thank you for your support, your understanding, and your membership. We are deeply grateful for this community and the support it provides. We hope you’ll stay connected with one another during this break from Mountaineers activities and stay well.

Your generosity is more critical than ever, so we thank you in advance for any support you can provide to The Mountaineers as we continue striving toward our mission. If you are in a position to do so, please visit our donation page and online silent auction to support our continued efforts in this time of uncertainty.