COVID-19 has presented nonprofit managers new challenges when it comes to cancelling events and dealing with vendors. Not knowing the length of government-required social distancing, organizations must determine whether to cancel meetings planned for months from now. When should you contact vendors? And what should you say? Here are some tips for actions you might consider for negotiating contracts of your own.

Acting Early

Being proactive will help the business you are working with understand your position when negotiating contracts. Likewise, it will help you understand the vendor’s needs and concerns.

Your first notice to a vendor may simply provide that due to COVID-19, and the uncertainty of social distancing duration, you are unsure if the conference or event will be held. If a deposit or other payment is currently due, see if it is feasible for the vendor to extend the payment deadline. By acting early, you are opening an opportunity to discuss options with your vendors. For example, one of our clients provided early notice to a hotel. The hotel immediately agreed that it would not require our client to meet room pick-up and other participation requirements.

Harvard Business Review puts it plainly: “...we do not have to choose between the immediate and the long term.” For this reason, it is important to speak with a business sooner rather than later.

Potential Cancellation

In your notice of potential cancellation, outline the reasons the event may be impossible to hold. If your contract has a force majeure clause, you may cite the clause and how COVID-19 is covered by it. If your force majeure clause does not mention infectious disease or pandemics, you may cite the requirement or guidelines currently set in place by your state government, the CDC or WHO.

Our sample notice of potential cancellation provides an example [Link needed for sample of potential cancellation]. Your notice, however, should be written specific to your contract(s).

Focus on Collaboration, Not Fearing the Worst

Sometimes, thinking through the worst possible outcome helps with decision making. This is particularly true if you need to weigh the risks involved with a new project. However, other times, BATNA (best alternative to a negotiated agreement) works better than WATNA (worst alternative to a negotiated agreement) thinking.

In the case of a possible event cancellation, BATNA considers what might work best for both parties. Perhaps you can agree to holding the event at a later date. This allows the vendor to keep deposits made toward the future event. This may be more readily accepted than insisting on a full refund now of monies paid, particularly if the vendor has very little income coming in during the current social distancing restrictions. The Consensus Business Institute posits that “inventing without committing,” or “what if” scenarios, will foster a mindset of collaboration.

Avoiding the WATNA line of thinking saves us from self-sabotage. In addition, it can alleviate some stress.

Cancellation Insurance

You may also want to consider taking out a cancellation insurance policy for future events due to the uncertainty right now. Make sure the policy you obtain, however, covers infectious diseases. According to pcma.org, infectious diseases/viruses are not typically covered and may require an additional premium.

Should you need to cancel, take a look at our sample notice of cancellation. Handling these moments with care will prevent any unwanted strain on your professional relationships.

Summary

Dealing with uncertainty is always a challenge. You can meet the current challenges by:

Acting early. Establish a line of communication with your vendors.
Engaging in BATNA-thinking. Be willing to collaborate and seek positive outcomes for each party while negotiating contracts.
Consider buying cancellation insurance for future events.