By Melanie Lockwood Herman
I’ve often remarked that, in the absence of fear, few nonprofit leaders would look to the Nonprofit Risk Management Center for advice and assistance. Fear motivates leaders to attend risk management workshops, purchase online tools, and read the books and guides we publish. Yes, fear can be a good thing, but for many reasons beyond sustaining the role of the Center.
Fear and worry go hand in hand. Our fears cause us to worry. Unproductive worry—called “toxic worry” by some experts, is not beneficial. Toxic worry is of little use to a nonprofit leader because it causes the person experiencing this form of worry to freeze—taking no action to relieve the symptoms causing worry. In contrast, “adaptive worry” inspires action. A nonprofit leader who harnesses adaptive worry considers how to escape from worry and lead her organization out of the woods.
Concern and fear about the economic downturn have led to surprising results. At a conference I attended last week I heard stories about nonprofit leaders who are pushing the innovation envelope—inspired by the need to do things differently with fewer resources. Others have found new ways to leverage resources to meet pressing client needs. I also heard about groups who had been determined to “go it alone” finally decide that partnering with others made the most sense for the people and communities they serve.
It is human nature to fear the unknown. Given that, how can we conquer our fears on behalf of the nonprofits we serve? Throughout the summer I’ve been writing about the topics of fear, uncertainty, and “unknown unknowns” in the Center’s latest risk management book, Ready or Not…A Guide to Risk Management for Nonprofit Executives. One of the theories I offer in the book is that making something familiar is the first step to overcoming fear and worry. In his book, The Leadership Engine, author Noel Tichy writes: “The best way to get humans to venture into unknown terrain is to make that terrain familiar and desirable by taking them there first in their imagination.”
In many respects the discipline of risk management is ideal for those with a healthy imagination and an opportunity for others to fine tune their imaginative abilities. After all, risk management activities involve peering into the future and making decisions today that will protect the mission and programs of a nonprofit, no matter how that future takes shape. A good imagination is an indispensable tool for the seasoned risk manager. It’s also one of the reasons why enlisting the help of a diverse group of people is essential to any risk management program. The more diverse your brainstorming group, the more imaginative you will be in identifying your critical risks and innovative responses.
One area where nonprofit leaders seem to express quite a bit of apprehension is exposure to litigation. With the rare exception of seasoned courtroom veterans, the prospect of being sued is likely to strike fear in the heart of the typical nonprofit executive. In many respects a lawsuit is like an accident—it isn’t easy to predict. But it is possible to “go there in your imagination” and consider the types of activities your nonprofit undertakes that could lead to legal challenges. For many nonprofits these include:
- Delivering services to vulnerable clients;
- Terminating employees;
- Using the intellectual property of others;
- Assuming contractual obligations;
- Collecting personal information from staff, volunteers, clients and donors;
- Soliciting and using restricted donations; and
- Hosting special events.
Imagining the types of claims you might face as a result of these activities is a vital precursor to identifying and implementing practical risk management interventions. Your concern about claims arising from client misconduct might lead to the development of a Code of Conduct. Your concern about the misuse of intellectual property might lead to guidelines for the use of third-party materials in the nonprofit’s newsletter and web site. Your concern about the risks associated with an upcoming special event could inspire you to establish a safety team charged with spotting and address dangers before and during the event.
In addition to letting your imagination consider the types of suits you might face, becoming familiar with legal terminology and the litigation process are other remedies that will quiet your fears of being sued.
In our book, EXPOSED: A Legal Field Guide for Nonprofit Executives, my co-author Mark E. Chopko and I explore everything from basic legal terminology to guarding against claims alleging mistreatment of vulnerable clients and surviving litigation.
Executives serving management roles in nonprofits can, without investing in a formal legal education, learn liability basics and use a wide range of legal resources to inform decision-making for their organizations. The book was inspired by the belief that leaders of nonprofit organizations should take the time needed to understand the liability environment in which their organizations operate and to learn some legal basics that will enable them to:
- understand what steps are important to steer clear of legal trouble, minimize the risk of lawsuits and claims, and refrain from jeopardizing the nonprofit’s position in a legal battle;
- proceed more confidently about their business, without unwarranted fear of legal liability and frivolous lawsuits;
- manage the nonprofit’s affairs in a way that complies with legal rules and requirements; and
- fortify the organization to withstand a legal challenge.
Melanie Lockwood Herman is the Executive Director of the Nonprofit Risk Management Center. She welcomes questions and comments at Melanie@nonprofitrisk.org or 703.777.3504.