Hallmarks of a Risk-Aware Nonprofit

Hallmark #12: Looks at Risk from Everyone’s Perspective

The Challenge

Let’s face it: it is not easy to get a handle on the risks facing a dynamic nonprofit organization. Each nonprofit faces risks that are dependent upon its unique operations, clientele, location, services, volunteers, fundraising activities and facilities. A diverse group of eyes (and ears) identifying and examining risks sees more than a single set ever can. Bringing diverse perspectives to the table is a savvy nonprofit’s secret weapon.

Savvy nonprofits know that their own eyes are sometimes clouded and that inviting an objective third party to conduct a risk assessment is not a threat, but a gift: Objective eyes see more clearly than those belonging to the nonprofit itself.

Nonprofits that look at risk from everyone’s perspective understand and address risks that would be overlooked in other organizations.

The Process

To demonstrate that your nonprofit looks at risk from everyone’s perspective, your nonprofit will:

  1. Encourage all stakeholders in the organization to provide feedback to management about perceived risks.
  2. Strive for a diversity of perspectives in the composition of the nonprofit’s board and staff.
  3. Engage a diverse group of stakeholders when staffing task forces or risk management committees.
  4. Be aware of board terms and consider the value of term limits that encourage an organization to add new board members regularly.
  5. Consider the value of asking the nonprofit’s insurance professionals to bring in a “fresh” perspective too: ask your agent or broker from time to time about emerging risks that the insurance industry is concerned about.