Hallmarks of a Risk-Aware Nonprofit

Hallmark #1: Takes More Risks than It Avoids


The following tools will help you transform your nonprofit into an organization that takes more risks than it avoids.

  1. Don’t have a Risk Management Committee yet? Thinking about one? Take a look at the article, “About Risk Management Committees” from the library of articles available from the Nonprofit Risk Management Center. The article describes the value of a risk management committee, what its role is and who might be asked to serve on the committee. Click here.
  2. To encourage creative risk-taking among staff and volunteer leaders:
    • Consider including a statement about risk-taking in the goal-setting process for staff and volunteer leaders. For example, an individual employee’s goals (or the board’s goals) might include:
      • Identifying at least one upside risk (opportunity) that ABC Nonprofit should consider in the coming year, evaluating them and recommending one for implementation.
    • Consider including a statement on risk-taking in staff and volunteer position descriptions under the section labeled, “responsibilities include:” and also in position descriptions for board members, such as:
      • “Identifying ways that ABC Nonprofit can take risks in order to achieve its ambitious mission.”
      • “Providing leadership to ABC Nonprofit by fostering “out of the box” ways of serving our clients that will propel the organization’s mission forward.”
      • “Encouraging informed and thoughtful risk-taking among direct-reports.”
  3. To explore how motivating colleagues with “just enough anxiety” is actually a valued leadership skill, read Robert Rosen’s book, Just Enough Anxiety. More information, including a list of CEOs who Rosen believes exhibit “just enough anxiety” in leading their organizations, is available at this URL.
  4. Take a look at the case-studies compiled by Michael M. Kaiser, the head of the John F. Kennedy Center for the Performing Arts, in Washington, D.C. that examine successful management techniques at arts institutions: The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations. Among Mr. Kaiser’s suggestions is to expand programming, marketing, and fund-raising efforts rather than reduce the number of productions or cut back on marketing to save money. “My focus is on revenue more than cost,” Mr. Kaiser is quoted as saying. “If you keep cutting, you will disappear.”
  5. Inspire your staff with quotes about risk-taking as footers on memos, tag-lines in email signatures, or wherever your organization posts messages to staff and volunteers. The Web site has a good selection.
  6. Define and highlight for stakeholders certain risks the organization is willing to take while at the same time clearly communicating the limits of other risks. For instance, provide donors with a Gift Acceptance Policy that defines certain types of donations that the organization is NOT willing to accept. Click on this link to see an example of a very specific Gift Acceptance Policy of the Morrison Foundation that communicates to donors exactly what the organization will accept in donations that will further its mission.
  7. Recession Strategies: Cutting staff and programs may seem like the logical solution when money is tight, but strategic thinking is needed to ensure that cuts are the right solution. Click here for a link to an article published by Bridgespan consulting group that weighs the pros and cons of program investments and the risk of cutting staff and programs too deeply in times of economic challenge.
  8. Click here to read an article by Kate Barr, Executive Director of the Nonprofit Assistance Fund published in the Nonprofit Quarterly Spring 2009, "Improving Nonprofit Decision Making amid Economic Crisis."
  9. Click here for a Cash and Investment Analysis Worksheet developed by the Nonprofit Assistance Fund in Minnesota to help nonprofits sort through their liquid assets to easily distinguish between cash that is liquid and other types of restricted, designated or hard-to-access funds.
  10. Click here for a Scenario Planning Worksheet and other tools for crisis preparedness.
  11. Click here for financial management self-assessment tool developed by the Nonprofit Assistance Fund in Minnesota.