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Most all nonprofits are accustomed to purchasing insurance to protect their largest risks but many are not undertaking a formal approach to managing risk...
By Gordon B.
nonprofit organizations are facing their toughest challenges yet. Funding
sources are decreasing or limiting support and the need for their services is
increasing. It’s a “perfect storm” of variables that test the management and
ability of nonprofit leadership to deliver on their mission and core
dealing with the “new realities” of our economy, leadership must also deal with
the risks associated with operating a nonprofit. And as the environment becomes
more difficult, the risks of operating the organization will increase, too.
all nonprofits are accustomed to purchasing insurance to protect their largest
risks but many are not undertaking a formal approach to managing risk. The
advantages of formalizing an approach to risk management are many, but first
it’s important to understand that risk management is a long-term plan based on a
four step process:
Identify the risks and exposures the organization faces – both large and
Develop strategies to deal with those risks – insurance is the most common, but
there are other processes to mitigate, control, and manage risk that are
important to understand.
Implement the plan from the various strategies developed.
Monitor and adjust to maximize results.
identification of risk may be the most important step in this process that is
often revealing and surprising to nonprofits. Using a checklist or audit
approach to risk identification will bring out risks arising from the board of
directors, volunteers, employees, clients and beneficiaries, general operations,
fund raising, money handling, systems and cyber security and more.
identification will lead to conversations about operations and processes. Plus,
it usually uncovers potential methods to improve efficiencies, standards and
ultimately the risks the organization faces. Working with a firm, skilled in the
management of risk, to deliver solutions to a nonprofit can take those
conversations and move them towards the second step in the Risk Management
Process – Strategies & Solutions.
by prioritizing and working in order – from the organizations largest, most
potentially damaging risks to the smallest, least significant risks – will
ensure it is mitigating risk and protecting itself from risk. Then, work through
the remaining steps to make sure the organization is maximizing its
a solid risk management strategy could be very advantageous in today’s economy
as a method to squeeze efficiency and productivity out of every donor dollar
while protecting the organization’s bottom line.
B. Coyle, CPCU, ARM, AMIM-President, is a 30-year veteran of the insurance
industry, Gordon Coyle has extensive experience working within the mid-market
business sector; helping to reduce risk, prevent loss and lessen costs through a
unique and diagnostic risk management process. Coyle has demonstrated
professional competence by earning the Chartered Property Casualty Underwriter
(CPCU), Associate in Risk Management (ARM) and Associate in Marine Insurance
Management (AMIM) designations. Coyle continues to share his knowledge,
furthering his influence, as a frequent guest speaker. He actively participates
in educational lectures aimed at niche industry groups as well as provides his
own sought-after seminars regarding effective risk management strategies,
insurance topics, and general business issues.
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