Risk Management Essentials
Articles from the Fall 2009 Print Edition
For the PDF version, click here.
Unmasking the Discipline of Risk Management
By Melanie Lockwood Herman
The discipline of risk management is incorrectly masked in mystery. Leaders of nonprofit organizations may believe that formulas can be applied to discern both the likelihood of good or harm should a risk materialize, and the price tag for those outcomes. Various tools developed by capable organizations have created this impression that a formulaic approach exists and should be applied. more…
New Risk Management Tools Now Available
The Nonprofit Risk Management Center has released two online tools designed to help nonprofit leaders position their organizations for success.
The first tool, found at www.MyRiskManagementPolicies.org is an easy-to-use program that allows you to create clear, concise, and customized risk management policies to meet the needs of your nonprofit organization. The tool was developed to help leaders avoid the mistake of using ill-suited policies found online or borrowed from other organizations. Creating practical policies that are unique to your nonprofit is an important component of risk management. But instead of effectively managing risk, leaders who “borrow” the policies of another nonprofit may actually increase their exposure to loss by adopting a policy that is beyond the reach of their nonprofit. Using a policy designed for a larger or substantially different nonprofit can expose a nonprofit to liability when the organization is unable to follow the policy to a “T.”
My Financial Management Plan, found at www.MyFinancialManagementPlan.org, to guide leaders in updating the components of their financial management systems and integrating these components into a cohesive plan. This powerful system features 21 modules, covering topics such as Board Fiduciary Obligations, Managing Fraud Risk, Managing Cash Flow, Return on Investment Analysis, Cost Allocation, Classifying Net Assets, Budgeting, and Grants and Contributions. more…
Senior Volunteers: A Priceless Resource
Seniors are participating as volunteers for nonprofit organizations in record numbers. Participants include Senior Corps, the federally-funded national “network of programs that tap the experience, skills, and talents of older citizens to meet community challenges” (Source: www.seniorcorps.org) to seniors who serve in large numbers of nonprofits throughout the country, to senior church members, grandparents, and others who pursue local volunteer opportunities in human services, recreation, cultural arts, and social services. more…
Measure Twice, Cut Once: The Science of Volunteer Risk Management
While there are nuances of effective volunteer management that depend on the culture, mission and programs of your nonprofit, there are some aspects that must be followed like the directions for an angel food cake: don't mess with the recipe. more…
Risk and the Art of the Motorcycle
By Melanie Lockwood Herman
On the Sunday before Labor Day I was blessed to have the opportunity to reflect on of my two favorite subjects: motorcycles and risk management. On that beautiful day, I was among the riders at the Pewter Run, a time-based rally for vintage motorcycles held in Hillsborough Center, New Hampshire. September 6th also happened to be the birthday of Robert Pirsig, author of the book Zen and the Art of Motorcycle Maintenance. In July of 1968, Pirsig began a cross-country motorcycle trip with his son and two friends. Upon returning, he began work on a book about the trip that took several years to complete. Pirsig’s book, published in 1974, eventually sold more than 5 million copies.
As I followed my fellow riders on a 40-mile route, I was reminded time and time again about the essential lessons of risk management. more…