By Ann Shanklin, Director, Specialty Risk Management Services and Kim Spilker, Director, Specialty Risk Management Services
Summary:
Risk management for nonprofits is not just about having adequate insurance; it is also about reducing the level of risk for the nonprofit, the staff, the volunteers, and the clients served by implementing effective policies and procedures.
Being prepared with the tools and information you need to plan will help ensure that an unmitigated risk doesn’t derail your organization.
To help you develop a risk management plan that reflects your organization’s needs, priorities, and culture, NIA-insured nonprofits can get a free subscription to My Risk Management Plan.
Nonprofit organizations strengthen communities by providing education, health, and social services. We know you want your organization to succeed and that you work very hard to make sure that happens!
To prepare your nonprofit to achieve its mission, reaching its maximum impact and potential, you need to know how to identify and mitigate risks to your organization.
Nonprofit risk may sound complex or a bit scary, but it doesn’t need to be.
Every day, you make decisions to ensure your health, safety, and well-being — whenever you fasten your seatbelt, wear a bike helmet, lock your doors at night, or protect your online accounts with strong passwords, you are engaged in risk management.
You are planning for the unexpected or to reduce harm when there is an expected risk. Risk management in your nonprofit is no different.
What is Risk Management?
Risk management for nonprofits is not just about having adequate insurance; it is also about reducing the level of risk for the nonprofit, the staff, the volunteers, and the clients served by implementing effective policies and procedures.
It is a discipline for dealing with the possibility that some future event will cause harm, and the process through which nonprofits deal with potential risk to their organizations.
Risk management provides strategies, techniques, and an approach to recognizing and confronting any threat faced by an organization.
It can range from employee/volunteer background checks to having a legally compliant employee handbook, to proper insurance coverage.
Keep in mind that not all risk is bad — some risks are opportunities. You should position your nonprofit to be prepared to respond, regardless of the type of risk.
Why is Risk Management Important?
Risk is inherent — an active nonprofit or nonprofit program cannot eliminate all threats.
Risk management is essential because it helps you understand the threats and opportunities you are facing, and then prioritize the issues.
Being prepared with the tools and information you need to plan will help ensure that an unmitigated risk doesn’t derail your organization.
You would not take a cross-country road trip with a set of bald tires. Likewise, it would be reckless to know of an organizational risk but not take appropriate steps to prepare for, mitigate, or adequately respond to it.
Developing a Risk Management Plan — It’s Easy to Get Started (Or to Review Your Current Plan)!
Nonprofits Insurance Alliance (NIA) believes that risk management is the key to accountability for any organization.
To assist you in developing a customized risk management plan for your organization, NIA provides a free subscription to My Risk Management Plan.
This online program will help you develop a plan that reflects your organization’s needs, priorities, and culture.
As you work your way through the program, you will be provided with information on the many other NIA risk management services available to help you manage your risks.
Conclusion
Risk management is a continuous process that requires time and oversight to be successful.
A solid risk management strategy will save you and your nonprofit time and money. It will improve your decision making, help avoid surprises, and most importantly, prevent harm to the persons served by your nonprofit.
If you need assistance, the NIA Risk Management Services team is here to help. They can be reached at RMS@insurancefornonprofits.org or 800-359-6422 ext. 5001.
Want to know more about risk management? NIA has several recorded on-demand webinars, all free for our members.