Managing Nonprofit Risks

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Managing Nonprofit Risks

  1. 1. Managing Risk for Your Nonprofit Best Practices, Policies & Procedures Presenter: Peter Andrew, CEO, Council Services Plus 272 Broadway Albany, NY 12204 877.501.4277, Ext 125 www.councilservicesplus.com
  2. 2. Why Manage Risk? <ul><li>Increased Accountability </li></ul><ul><li>Attract Donors </li></ul><ul><li>Prevent/Reduce Loss </li></ul><ul><ul><li>Prevent Harm </li></ul></ul><ul><ul><li>Cost and Time </li></ul></ul><ul><li>Lower Insurance Cost </li></ul>
  3. 3. An Ounce of Prevention... <ul><li>Areas of Risk Management that </li></ul><ul><li>Can Save You Money </li></ul><ul><ul><li>Operational </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><ul><li>Governance </li></ul></ul>
  4. 4. An Ounce Of Prevention… <ul><li>Risk Management Resources for </li></ul><ul><li>Your Nonprofit </li></ul><ul><ul><li>nonprofitrisk.org </li></ul></ul><ul><ul><li>rims.org </li></ul></ul><ul><ul><li>riskinsitute.org </li></ul></ul><ul><ul><li>Your Broker </li></ul></ul><ul><ul><li>Your Insurance Carrier </li></ul></ul>
  5. 5. Operational Risk <ul><li>Things we can “See and Touch” (People & Programs) </li></ul><ul><li>Tends to be easiest place to start </li></ul><ul><li>Word of Caution </li></ul>
  6. 6. Financial Risk <ul><ul><li>Internal Controls </li></ul></ul><ul><ul><ul><li>Auditors and Forensics </li></ul></ul></ul><ul><ul><li>Theft </li></ul></ul><ul><ul><ul><li>Why? </li></ul></ul></ul><ul><ul><ul><li>Who? </li></ul></ul></ul><ul><ul><li>Financial Statements </li></ul></ul><ul><ul><li>Economic Conditions </li></ul></ul>
  7. 7. Governance Risk <ul><li>One of the tougher areas </li></ul><ul><ul><li>BoD’s perceived as smart, capable, honest & competent </li></ul></ul><ul><ul><li>Duties and Responsibilities </li></ul></ul><ul><ul><li>Immunity (?) </li></ul></ul>
  8. 8. Your Survival Kit For Risk Management <ul><li>Excellent Communicators </li></ul><ul><li>Excellent Contacts </li></ul><ul><li>Be Up-To-Date on The Issues </li></ul><ul><ul><li>National Newspaper </li></ul></ul><ul><ul><li>National News Magazine </li></ul></ul><ul><ul><li>Local News Source </li></ul></ul>
  9. 9. Your Survival Kit For Risk Management <ul><li>Imaginative/Strategic Thinking </li></ul><ul><ul><li>Conceive the ‘worst’ and ‘best’ </li></ul></ul><ul><li>Solicit & Maintain A Broad & Deep View of Your Organization </li></ul><ul><li>Seek New Knowledge </li></ul><ul><ul><li>Try to know what you don’t know & more importantly, what you think you don’t need to know! </li></ul></ul>
  10. 10. Identify Risk <ul><li>What is the role of the Risk Manager? </li></ul><ul><li>What are the Goals of Risk Management? </li></ul><ul><li>The Risk Management Policy Statement. </li></ul><ul><li>Creating a Risk Management Committee. </li></ul>
  11. 11. Evaluate Risk <ul><li>Estimate the Frequency and Severity of each Risk Exposure </li></ul><ul><ul><li>High/High </li></ul></ul><ul><ul><li>Low/High </li></ul></ul><ul><ul><li>High/Low </li></ul></ul><ul><ul><li>Low/Low </li></ul></ul>
  12. 12. Implement Risk Management Techniques <ul><li>Decide how your Nonprofit will handle the Risk (Avoidance, Modification, Retention, Etc) </li></ul><ul><li>Decide on Actions and Policy </li></ul><ul><li>Communicate Plan </li></ul><ul><ul><li>Fast or Slow? </li></ul></ul>
  13. 13. Monitor and Update <ul><li>Review at Least Annually </li></ul><ul><ul><li>Track changes and document </li></ul></ul><ul><li>The Review Process </li></ul><ul><ul><li>What can go wrong? </li></ul></ul><ul><ul><li>What will we do to prevent harm? </li></ul></ul><ul><ul><li>If something happens, What will we do? </li></ul></ul>
  14. 14. Notes for the Road <ul><li>Be Calm In Crisis </li></ul><ul><li>Be Fearless In Your Pursuit of Risk </li></ul><ul><li>Where Principle & Planning Are Clear… </li></ul><ul><li>Decision Making Is Easy </li></ul>
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