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Executive Director
Note: This article is excerpted from the Nonprofit Risk Management Center’s book, Ready…or Not: A Risk Management Guide for Nonprofit Executives.
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.
It is not possible to create a formula or algorithm that will generate exact answers in such extraordinarily diverse organizations facing differing circumstances. The appropriate risk management solution for your social services agency may be entirely inapplicable to an advocacy group seeking to draw attention to its cause. No mathematical formula will provide the answers to the core questions that arise when contemplating—and deciding what to do about—risk. To “unmask” the discipline of risk management, we need first to dispense with academic definitions that describe the discipline as a mechanized series of steps that can be applied to fit all circumstances. Risk management is a discipline for dealing with uncertainty. At its most basic level, that may involve simply imagining what events could unfold in our organizations and making the slightest change in behavior to prepare for that possibility. When we pack essential items in our carry-on bag or grab an umbrella without looking in the sky or at the forecast, we’re managing uncertainty.
In their book Risk-Benefit Analysis, authors Richard Wilson and Edmund A. C. Crouch write, “The very word risk implies uncertainty.” Nonprofit leaders are often uncomfortable with risk and its implication: an uncertain outcome. We want to “program” success in our organizations. But uncertainty surrounds us, particularly as we work to improve the lives of vulnerable clients, reduce pollutants in our environment, provide emergency services to victims of domestic violence, or work to find a cure for a disease that annually claims the lives of thousands. How can we accomplish these laudable pursuits without exhausting the time, financial resources and patience of our staff? While there are myriad approaches to tackling the risk management dilemma in a nonprofit, three tangible tools are within reach…and worth reaching for. These tools can be adapted to suit the culture and needs of any nonprofit, but the presence of these three tools suggests a serious approach to integrating risk management into the lifeblood of a nonprofit. We introduce these concepts below.
“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 the Center 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 the Center. 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 Center 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!