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Nonprofit Risk Management Center A source for tools, advice and training to control risks ... so you can focus on your nonprofit's mission

July 9, 2009

People Who Need People:
Are you feeling lucky?

By Melanie Lockwood Herman

Nonprofit management experts often direct “nonprofits” to take specific steps to improve their governance, internal operations, strategic planning and fundraising activities. But as we well know, the “nonprofit” itself is incapable of “doing” anything—it’s the people behind the desks, on the other end of the phone, and seated around the board table who make things happen in the nonprofit world.

A closer look at the people in our organizations—employees, volunteers, donors, clients, parents of consumers, visitors, members, guests and the like—reveals an interesting kaleidoscope of risk (in addition to reward). The risks associated with the people we depend on to bring a nonprofit’s mission to life range from mundane to life-threatening. While many leaders focus on the most common risks, such as “slips, trips and falls,” versus the most costly risks, a sound approach to risk management requires looking deeper into the landscape of operations in order to spot and address risks that may be disasters in the making.

Examples of risks that may be more subtle than a tripping hazard include:

  • Volunteer dissatisfaction—What could go wrong in your nonprofit when a small (or worse!) group of dedicated volunteers becomes disenchanted with the organization’s leadership, direction or support? Could trouble be brewing that you don’t know about? Are you responsive to volunteer feedback and complaints, or dangerously dismissive of this group of stakeholders?
  • Donor fatigue—There’s a fine line between reaching out to donors to request their support and bombarding your contributors with messages that imply desperation (or foolishness). I recently received a solicitation from a local nonprofit that first explained the charity’s dire circumstances and then asked me to send money “so me and Teresa can keep our jobs!”  Needless to say I wasn’t inspired to contribute. In fact, I made a mental note to withhold future contributions until I see evidence of better judgment on the part of the nonprofit’s staff.
  • Ineffective board communication—While everyone wants to be part of a successful enterprise, the board members of your nonprofit have agreed to serve “for better or worse.” And nothing is worse than notice of trouble when it’s too late to act. Every nonprofit CEO should view the board as a partner in mission-fulfillment. But in order to be an effective partner the board must be informed of the organization’s progress and activities, including any indicators that the nonprofit won’t meet its financial or other goals. Communicating “bad news” early and clearly is an essential element of effective leadership.

A wide range of topics related to managing and motivating people in our workplaces will be addressed at the upcoming 2009 Risk Management and Finance Summit for Nonprofits.  In addition to three workshops on human resource topics, “people-risk” issues will be explored in the following informative sessions:

  • Ethics and Volunteers: What’s the Big Deal? - Most of us are familiar with ethical issues related to board governance, financial management, and human resources. But what about all those volunteers? This session will present the core ethical principles which apply to volunteer management, and provide an opportunity to explore a practical decision-making process for navigating the real-life ethical dilemmas commonly faced by organizations like yours.
  • Managing Fraud Risk in Your Nonprofit: Practical Tools to Safeguard Your Assets - In the Report to the Nation on Occupational Fraud and Abuse, the Association of Certified Fraud Examiners estimates that 7% of organization revenues are lost to fraud. In 2008, fraud losses amounted to a staggering $994 billion. From Ponzi schemes to embezzlement, it is clear that nonprofits are more vulnerable to fraud than widely recognized. Equally disturbing, nonprofit sector frauds are too often committed by your most valued assets: long-time, trusted employees and volunteers. Even worse, some experts predict that fraud will spike during the economic downturn. This workshop will describe what factors contribute to fraud, facts about the crimes, who is committing fraud, the fraud schemes used, and best practices that organizations should employ to combat this growing category of crime.
  • Best Practices in Nonprofit Governance and the Legal Duties of Nonprofit Boards - Governance is one of the hottest issues facing the nonprofit sector. Across the country nonprofit leaders are searching for the perfect recipe for 'best practices' in board governance. This workshop will offer a menu of good governance practices, with case studies to whet your appetite. The development of appropriate, customized policies will be discussed. Since the key to good governance is ensuring that those around your board table are both aware of their legal obligations and embrace their fiduciary roles and responsibilities, this workshop will share practical strategies for enhancing the board’s appreciation of governance risks and helping the board provide the leadership required to protect the nonprofit’s mission, programs and assets.
  • Volunteer Liability: What You Don’t Know About “Free” Workers Could Cost You - Experienced volunteer coordinators and nonprofit CEOs know full well that volunteer service is anything but “free of charge.” Astute leaders must proceed with care when recruiting, training and deploying volunteers. Experts are predicting that volunteer numbers will climb as poor economic conditions continue. This workshop will explore some obvious, and some less-than-obvious risks presented by volunteers and offer practical strategies for getting the most out of volunteer service.
  • Partnerships and Collaboration: Risk Management Lessons from Success and Failure - Nonprofit leaders are drawn to collaboration like bees to honey and moths to a flame. There’s nothing like a good old fashioned collaboration to sweeten the best in people and their organization, but watch out for the partnership that might burn you when you least expect it. This workshop offers a practical approach to managing partnership and collaboration risks with inspiration from a soon to be released publication on this topic from the Nonprofit Risk Management Center.

The full conference program, including details on our dynamic plenary speakers, can be found at the following link.

EARLY-BIRD DEADLINE – The early-bird deadline expires on July 31, 2009. Register by July 31st to secure the low full conference registration rate of $395 or one-day rate of $225. The registration fee includes resource materials for all conference workshops, breakfast and lunch on both days of programming, and generous doses of inspiration and practical information. To register for the Summit, click here.

Questions?! Call the Nonprofit Risk Management Center at (202) 785-3891 or write to: info@nonprofitrisk.org.

Summer Issue of Risk Management Essentials Now Available

The Summer issue of the Center’s newsletter, Risk Management Essentials, is now available. To download a PDF of the newsletter, click here.  To view the articles featured in the new issue online, click here. To request copies of the printed version for distribution within your organization, contact Sue Weir Jones at (202) 785-3891 or Sue@nonprofitrisk.org


© 2009 Nonprofit Risk Management Center

(c) 2009 Nonprofit Risk Management Center