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

April 7, 2010

The Missing Piece

By Melanie Lockwood Herman

I recently found myself studying several maps of a city known for its circuitous routes and maze of historic cobblestone alleyways. The map provided by the sightseeing tour bus operator was helpful to the extent that the location of stops along the route were clearly marked. The map included in my “Top Ten” guide was helpful because it contained a clear close-up of the city’s gothic quarter. And the map printed on the inside cover of my Frommer’s guide contained an index of popular sites with reference to their location on the map (e.g., Q6). Yet even with three helpful maps in hand, there were several occasions when I was unable to determine my exact location and found myself incapable of self-help. I chose the course of last resort for many tourists in a foreign city: I asked strangers for assistance.

My map reading experience reminded me of conversations with nonprofit leaders who are engaged in a search for the definitive source of information to inspire effective governance, management, and program/service delivery. There is no such font of universal information. The missions, operations, and cultures of nonprofit organizations differ so widely that any organization or “expert” claiming to offer all of the answers is not to be believed. Which is why at the Center we have worked hard to develop resources that empower nonprofit leaders to think critically, ask tough questions, and commit to the relentless pursuit of improvement. Not an impossible dream of radical and painless transformation but the commitment to make improvements day by day.

My recent experience poring over maps with distinct assets also reminded me of the goal of finding the “missing piece” in a risk management program. Many leaders call the Center and express concern about identifying what’s “missing” in their risk assessment and risk management programs. It’s not unusual to hear: “We’re pretty confident about our screening practices, but less so about other areas. How do we make sure we’re covering the bases?” There is no single way to ensure that you’ve got everything covered in your attempts to deal with uncertainty. In fact, it’s impossible to cover all the bases. In his book Risk Intelligence, author David Apgar explains why with his “myth of absolute risks.” An organization’s exposure to loss and opportunities for gain are in constant flux. While a definitive list of estimates of events materializing is being compiled, forces beyond the control of the list maker are converging to change the probabilities. The challenge is to broaden the focus and to examine risks and opportunities with a strategic eye and fashion a more adaptive organization that continuously monitors and confronts its risks.

The Center provides its clients with customized, on-site risk assessments for those who wish to dig deep and develop unique strategies for a successful future. Visit the Risk Assessment page under the Consulting Services tab on our homepage to learn more. Our view is that every organization should periodically undertake such assessments. Our clients who have done so invariably tell us that the experience was invaluable. But what happens in the time period between such intensive examinations?

Two examples of relatively quick and simple approaches are the online tools we call My Risk Management Policies and My Financial Management Plan. Leaders who subscribe to http://www.myriskmanagementpolicies.org are able to develop truly custom policies from scratch in minutes. Leaders who subscribe to http://myfinancialmanagementplan.com are able to move efficiently through 23 system modules to identify the missing pieces in their financial management frameworks and fill gaps with new language for board review. Neither tool generates a generic or readymade policy. Each tool requires users to integrate the realities of their organization to bring the policy or financial management plan to life.

We love quick fixes. A single, easy to read map that shows the bus tour stops, historic sites and every alleyway would be ideal. But just as every tourist may have a slightly different set of interests and priorities, nonprofits have varying policy needs. The most effective organizations are those whose leaders:

  • Believe deeply in continuous improvement. Organizations are imperfect. Every nonprofit can improve its governance, management and service delivery if its leaders are motivated to do so.
  • Recognize that, one-size-fits all solutions probably won’t fit the vast majority of organizations very well at all. Like a garment marked “one size fits all,” the proverbial “sample” policy is unlikely to suit your needs. You’re fooling yourself if you think the garment is figure flattering or the policy is “just right as is.”
  • Are unafraid to ask for help. A self-help attitude is healthy. But there are times when even the most skilled map reader must stop and ask a local for directions.

Like the organizations we most admire, here at the Center we’re also committed to continuous improvement. Each day we look for ways to improve the resources we offer to nonprofits. If you decide to give our new online tools a try, please know that I welcome your suggestions for how we can improve their content and functionality. You can reach me at Melanie@nonprofitrisk.org or (202) 785-3901. And don’t forget that we mean it when we say “find the answer here.” We welcome your questions and hope to be of service to your organization in the near future.

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your feedback on this article and questions about the Center’s resources at Melanie@nonprofitrisk.org or (202) 785-3891.

Melanie’s most recent books include Ready…or Not: A Risk Management Guide for Nonprofit Executives, and EXPOSED: A Legal Field Guide for Nonprofit Executives. Information on these titles can be found at www.nonprofitrisk.org/store/hot.asp.

2010 Webinars

The Center’s 2010 Webinar Series continues today at 2 p.m. (Eastern) with the third program in the year-long series: Risk Management, Budgeting and Forecasting. For more information on the 2010 series, visit: http://nonprofitrisk.org/training/webinars/webinars2010.asp.

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Mark Your Calendar! 2010 Risk Management & Finance Summit for Nonprofits

The Center will host its sixteenth annual conference this October 10-12 at the Loews Hotel in Philadelphia. Conference details will be announced in the weeks ahead. In the meantime, consider reserving your room at the Loews by using the hotel’s online reservations process. The process is explained on the 2010 SUMMIT page. Click here for details.

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