May 2008

Not-for-profit organizations can face many of the conflicts that for-profit businesses do, as well as unique challenges that can arise from their structure, purpose, difficulties in measuring outcomes, and funding restrictions. Mediation, facilitation, and consulting assistance can help meet these challenges.

Any organization, whether it sells products or services, or serves an important community need, consists of people developing goals, making plans to achieve them, and taking steps to implement those plans. Conflicts can arise in each of those steps – at the initial stages of the organization or as it grows and evolves.

A not-for-profit organization’s initial purpose and goals may no longer fit with changing conditions in the community it serves, yet those involved since the founding may find it difficult to accept necessary changes. Not-for-profits may struggle to demonstrate their successes because they cannot rely on profits as measurement tool.

Funding sources – whether private donors, foundations, or government agencies – may impose standards and requirements on the organization.

Not-for-profits have additional challenges because they may work with volunteers as Board directors, committee members, and essential helping hands.

Some involved in a not-for-profit may be inexperienced with or reluctant to embrace efficiencies and processes that would be expected in private sector and could be helpful in the not-for-profit sector.

Community foundations (especially donor directed funds) and family foundations add another dimension: potential conflicts when a younger generation does not understand or fully share the motivation and intent of the parents who made significant donations. The next generation may feel resentment, which may be spoken or unspoken, about gifting decisions made but not known until the death of the donor.

Mediation and facilitation can help those within the organization find common ground and work together to achieve their shared fundamental goals. Not-for-profit organizations may also benefit from mediation, facilitation, or consulting assistance in their relationships with each other, potential donors, and others whose actions can affect their ability to succeed.

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Business mediation is a process for resolving conflicts within or between businesses. Participation is voluntary, the sessions are confidential, and the mediator is a trained neutral who has no stake in the outcome. Mediation can be helpful at any point in the life cycle of a business, from formation to dissolution, and even in bankruptcy proceedings. In mediation, parties retain control and are able to craft an agreement that best suits their needs, instead of leaving a judge, jury, or arbitrator to decide their fate.

Mediation at the inception of a business can take the form of creative and thoughtful planning to prevent conflicts, as well as to minimize and resolve conflicts that may still occur. Simply including an agreement to mediate disputes in appropriate documents can create a framework and expectation that conflicts will be handled in a fashion that best serves the business and its owners.

At a later time, mediation can permit owners to make adjustments necessary for the business to thrive, as conditions and their own priorities evolve. If a “business divorce” is the best option, mediation can serve the interests of all of the parties involved.

In any context, mediation typically costs less in out-of-pocket expenses than protracted litigation and requires less time to reach a resolution. Mediating a business dispute also minimizes costs that are difficult to quantify. Distraction and discontent within the business caused by the ongoing conflict can lead to a lack of focus on running the business effectively. Loss of business goodwill can follow as adversaries within the business harden their positions and vendors, customers, and external partners become affected by the internal strife. Competitors may see opportunities to take advantage of the firm’s weakness.

Mediation between or among businesses offers many of the same benefits as mediation within a business, reducing both direct and indirect costs.

Not-for-profit organizations also face conflicts that mediation can help to resolve.

Family Businesses

Mediation is especially effective in addressing the particular opportunities and challenges presented by family businesses. Family dynamics can reflect tensions that arise from events that occurred long ago and reactions to them, as well as inevitable change as family members mature, marry, retire, and change their personal priorities. The success, even the viability, of the business can be placed in jeopardy by family conflict.

Mediation and consulting to assist productive communications can help families and their businesses to grapple with difficult issues that will do harm to both if they are ignored or if some involved feel that their interests have been overlooked or unfairly undervalued.

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