Hallmarks of a Risk-Aware Nonprofit

Hallmark #11: Engages the Board in Their Battle

Tools

  • Provide the board with basic risk management information specifically related to their role as board members. Click here for information on the affordable booklet, Pillars of Accountability.
  • Introduce your board members to a free email newsletter just for boards called, Blue Avocado. Sign up by sending an email.
  • BoardSource offers a broad range of publications specifically for boards of nonprofit organizations. www.boardsource.org.
  • State associations of nonprofit organizations often can provide excellent training resources or connect you with trainers/consultants who are professional trainers with experience guiding nonprofit boards. The National Council of Nonprofits, www.councilofnonprofits.org, is a resource that you can use to locate a state association of nonprofits near you.
  • Good governance is key to risk management. Share the principles of good governance developed by a “blue ribbon” panel of nonprofit leaders. Visit www.nonprofitpanel.org for more information about the efforts of the Panel on the Nonprofit Sector. Download an executive summary of the panel’s 33 recommendations for good governance and ethical practice here.
    • A booklet suitable for distribution to your board with a short discussion of each recommended principle is available in PDF format.
    • To order print copies of the Principles of Good Governance and Ethical Practice, a Guide for Charities, click here.
  • Free Online Mini-Courses on the Redesigned Form 990. The IRS has created five new mini-courses on the redesigned Form 990 that provide information on preparations for filing the new Form 990, as well as a walk-through of the entire form and frequently used schedules. Click here.
  • Educate your board about their responsibility to review the 990 prior to filing — see new IRS Form 990, Part IV, Section
  • Give your board the tools they need to ask “What could go wrong? Share stories in the media, such as the Chronicle of Philanthropy, or e-newsletters that you receive, that describe scenarios that you hope will never happen to your nonprofit.
  • Encourage a culture of inquiry. Ask a willing board member to keep the question, ‘What can go wrong’ in mind and ask it out loud when appropriate at any board or committee meeting: also encourage board members to ask:  “What will we do about it?” and “How will we pay for it?”
  • Provide your board with a Risk Management Check List — just for the board! Click here.
  • Educate your board about their role in reviewing and approving executive compensation, as encouraged by the IRS in its questions on the Form 990 (Part VI, Section B). To view a sample Executive Compensation policy, click here.
  • Is your organization engaging in partnerships or joint ventures with other nonprofits, or with a for-profit? Educate your board about the collaborations and partnerships affecting your organization so that they can help spot risks such as potential conflicts of interest that affect them. The IRS encourages organizations to have a written policy for board review of partnership/joint venture agreements. For a sample joint venture/partnership review policy, click here.
  • Conflicts of interest that are unrecognized or recognized but not managed appropriately are one of the biggest sources of risk to a nonprofit's reputation as a financially transparent and accountable organization. Help your board understand that conflicts can be other than simply financial -- and help them disclose conflicts with a clear disclosure procedure. For resources on developing a practical conflict of interest policy and disclosure procedures that your board can understand and sink their teeth into, click here.