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The topic of risk-taking was front and center in a recent Wall Street Journal article, “Risk-Averse Culture Infects U.S. Workers, Entrepreneurs” by Ben Casselman. According to the author, the risk-taking, dream-chasing spirit is dwindling in the hearts of American workers and business owners. Economists agree that the American economy was historically spurred on by risk takers who enthusiastically started new businesses. Yet according to Casselman, risk aversion is eclipsing entrepreneurial drive in the hearts of American workers. As a result, many Americans prefer the security of corporate jobs, rather than the downside risks and potential reward of vulnerable, but potentially profitable small businesses.
Here at the Center we sincerely hope that America’s nonprofits don’t follow the conversion to risk-aversion. Part of our mission is to encourage nonprofit leaders to achieve their missions by taking thoughtful risks. Casselman’s article was a wake-up call to our staff that we may need to do more to encourage risk-taking when we’re called on to help with risk management.
Nell Edgington of Social Velocity calls risk-aversion a cyclic “hamster wheel of raising just enough money to keep going.” Risk aversion may lead to the unwillingness to make appropriate investments, hesitancy to compete with other organizations, and lack of drive to generate sufficient net income to invest in growth or changes in strategy or operations. Simply put, risk aversion stifles opportunities to grow the programs or services provided by a nonprofit.
What can nonprofit organizations do to be the entrepreneurial, risk-taking entities our missions require?
If you need a fresh look at the risk management program in your nonprofit, consider taking our popular cloud application, My Risk Management Plan, for a test drive. If your nonprofit already has a risk management plan, we encourage you to engage your management team and staff in developing state-of-the-art policies using My Risk Management Policies.
“First let me congratulate you on a conference well done. I had a great time at the Nonprofit Employee Benefits Conference and walked away with some valuable tools and questions that we’ll need to be addressing in both the short and long term. Thanks to you and your staff for all you do to provide us with quality resources in support of our missions.”
“BBYO’s engagement of NRMC to conduct a risk assessment was one of the most valuable processes undertaken over the past five years. Numerous programmatic and procedural changes were recommended and have since been implemented. Additionally, dozens (literally) of insurance coverage gaps were identified that would never have been without the work of NRMC. This assessment led to a broker bidding process that resulted in BBYO’s selection of a new broker that we have been extremely satisfied with. I unconditionally recommend the Center for their consultative services.
“Melanie Herman has provided expert, insightful, timely and well resourced information to our Executive Team and Board of Directors. Our corporation recently experienced massive growth through merger and the Board has been working to better integrate their expanded set of roles and responsibilities. Melanie presented at our Annual Board of Director’s Retreat and captured the interest of our Board members. As a result of her excellent presentation the Board has engaged in focused review which is having immediate effects on governance.”
“The Nonprofit Risk Management Center has been an outstanding partner for us. They are attentive to our needs, and work hard to successfully meet our requests for information. Being an Affiliate member gave us access to so many time- and money-saving resources that it easily paid for itself! Nonprofit Risk Management Center is truly a valued partner of The Community Foundation of Elkhart County and we are continuously able to optimize staff time with the support given by their team.”
“The board and staff of the Prince George’s Child Resource Center are extremely pleased with the results of the risk assessment conducted by the Nonprofit Risk Management Center. A thorough scan revealed that while we are a well run organization, we had risks that we never imagined. We are grateful to know that we have now minimized our organizational risks and we recommend the Center to other nonprofits.”
Great American Insurance Group’s Specialty Human Services is committed to protecting those who improve your communities. The NRMC team has committed to delivering dynamic risk management solutions tailored to nonprofit organizations. These organizations have many and varied risk issues, hence the need for specialized coverage and expert knowledge for their protection. We’ve had Melanie speak on several occasions to employees and our agents. She is always on point and delivers such great value. Thank you for the terrific partnership and allowing our nonprofits to focus on their mission!