Managing Risk in Nonprofit Organizations

Herman, Melanie L. and Head, George L. and Jackson, Peggy M. and Fogarty, Toni E. (2004) Managing Risk in Nonprofit Organizations. John Wiley & Sons, Inc..

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Abstract

PART I Chapter 1 Chapter 2 MANAGING RISK IN THE NONPROFIT SECTOR 1 The Nature and Purposes of Risk Management 3 Why Manage Risk in a Nonprofit? 4 Asset Stewardship 4 Achieving Public Accountability 5 Attracting Stakeholders 5 Freeing Up Resources for Mission 6 Staying True to Mission 6 Key Starting Points: Risk, Uncertainty, and Loss 7 What Is Risk? 7 What Is Uncertainty? 7 What Is Loss? 8 Assigning Responsibility for Risk Management 10 The Risk Management Process 14 Step 1: Establish the Context 15 Step 2: Appraise Risks 16 Step 3: Decide What to Do and Communicate 25 Step 4: Act on Your Decision 30 Step 5: Follow Up and Adjust 31 Managing Risk for Mission Fulfillment 33 Recognizing the Context for Risk Management 35 Risk Management Context 36 Organizational Context 38 Strategic Context 39 vii 4103 P- FM 8/19/03 12:56 PM Page viii viii contents PART II Chapter 3 Chapter 4 UNDERSTANDING THE GENERAL RISKS FACING NONPROFIT ORGANIZATIONS 41 Property Risks 43 Types of Property Subject to Loss 45 Tangible Property 45 Intangible Property 46 Perils Causing Property Losses 48 Natural Perils 49 Human Perils 49 Economic Perils 50 Financial Impact of Property Losses 52 Cost to Replace 52 Loss of Income 52 Mission-Critical Consequences of Property Losses 53 Methods of Identifying Potential Property Losses 53 Standardized Surveys or Questionnaires 54 Loss Histories 55 Financial Statements and Accounting Records 56 Other Records and Documents 58 Flowcharts 59 Personal Inspections 59 Internal and External Expertise 60 Scenario (What-If ) Analysis 61 Income Risks 63 Definition of Income Loss 64 Values Exposed to Loss 64 Decreases in Revenues 65 Increases in Expenses 71 Events Causing Losses of Income 72 Property Losses 73 People Losses 77 Reputation Losses 78 Liability Losses 79 Dimensions of Net Income Losses 80 Probability 80 4103 P- FM 8/19/03 12:56 PM Page ix contents ix Magnitude 81 Predictability 82 Methods of Appraising Potential Net Income Losses 83 Standardized Questionnaires 83 Loss Histories 84 Financial Statements and Records 84 Other Records and Documents 85 Flowcharts 86 Personal Inspections 86 Internal and External Expertise 87 Chapter 5 Liability Risks 89 Legally Protected Interest 90 Performance of Contractual Promises 92 Personal Safety 93 Freedom of Movement 94 Protection of Property 95 Security of Reputation 97 Right of Privacy 97 Economic Freedom 98 Community Protection from Crime 99 Wrongful Invasion 99 Breaches of Contract 100 Torts 101 Crimes 103 Common and Statutory Law 104 Common Law 105 Statutory Law 105 Responsibility 106 Harm Directly Caused 107 Without Justification 108 Privilege 108 Immunities 109 Legal Remedy 110 Money Damages 111 Specific Performance 111 Injunction 112 Remedies for Crimes 112 4103 P- FM 8/19/03 12:56 PM Page x x contents Chapter 6 Chapter 7 People Risks 115 People Exposed to Loss 117 Perils Threatening a Nonprofit’s People 118 Death 119 Termination 122 Retirement 125 Disability 125 Gradual Loss of Ability 128 Catastrophe (Multiperson) Events 129 Loss of Dedication 130 Loss of Personal Resources 131 Consequences of These Perils 132 Financial Consequences 132 Mission-Critical Consequences 132 Reputation and Mission Risks 133 Unique Characteristics of Nonprofits That Highlight Mission and Reputation Risk Areas 133 Mission Risk: What Does a Mission Statement Reflect? 135 Strategies for Dealing with Risks to a Nonprofit’s Mission 136 Funding and Revenue Issues 136 Client Base and Eligibility for Services 136 Programmatic Focus 137 Reputation Risk 137 Risk Issues—Reputation 138 Implications of Damage to the Nonprofit’s Reputation 140 Economic 140 Intellectual Capital 141 Public Confidence 141 Strategies for Dealing with Risks to the Nonprofit’s Reputation 142 Case 1: River Daycare Center 144 Case 2: The Knoll Elementary School 145 Case 3: Blue Chip Animal Shelter 146 Staff Behavior and the Nonprofit’s Public Image 147 4103 P- FM 8/19/03 12:56 PM Page xi contents xi Chapter 8 Managing Volunteer Risks 149 Short-Term Assignments 151 Strategies for Dealing with Risk Issues in Special Risk Issues in Volunteer Management for Effective Design for Orientation of Long-Term Risk Issues in Short-Term Assignments 151 Short-Term Assignments 153 Short-Term Projects 156 Long-Term Assignment Volunteers 158 Volunteer Staff 159 Volunteer Orientation Curriculum Components 159 Management and Supervision of Volunteers 160 Administration and Record-Keeping 160 Volunteer Handbook 161 Strategies for Managing Risk in a Volunteer Program 163 Chapter 9 Governance and Fiduciary Risks 165 The Nature of the Governance Role 165 Volunteer Protection Laws 166 Nonprofit Boards: Standards of Care, Loyalty, and Obedience 167 The Duty of Care 167 The Duty of Loyalty 168 The Duty of Obedience 169 Primary Risk Areas 170 Strategies for Dealing with Risk Areas 170 Membership: Structure and Composition of the Board 171 Board Meetings and Committee Meetings 172 Orientation Session for New Board Members 172 The Nature of the Fiduciary Role 173 Balance Sheet 176 Statement of Revenues and Expenses 177 Statement of Changes in Net Assets 178 Statement of Cash Flows 179 Financial Statement Analysis 180 Financial Ratios 180 Liquidity Ratios 181 Profitability Ratios 184 4103 P- FM 8/19/03 12:56 PM Page xii xii contents Asset Management Ratios 185 Debt Management Ratios 187 Chapter 10 Managing Risks Related to Serving Vulnerable Populations 191 Defining “Vulnerable Populations” 192 Clarity in Articulating the Parameters of the Providing Avenues for Feedback from Clients, Programs Serving Vulnerable Populations 195 Primary Risk Areas in Serving Vulnerable Populations 196 Strategies for Dealing with Primary Risk Areas 198 Human Resource Management 198 Training and Job Orientation 201 Supervision 202 Helping Families and Staff Deal with Abuse 203 Nonprofit’s Programs 205 Families, Caregivers, and Staff 206 Ensuring Safe Facilities 207 Chapter 11 Managing the Risks of Transporting Clients 211 Range of Service in Transporting Clients 211 Risk Areas in Transporting Clients 212 Elements of the Transportation Program 214 Core Values 214 Design of the Program: Establishing Parameters of Service 215 Clients 216 Introducing the Program to Potential Clients 216 Licensing of Drivers 217 Vehicles 219 Document Management 221 Emergency Procedures 224 Summary 225 Chapter 12 Managing Collaboration Risk 227 Collaboration: How and Why? 228 Informal Collaboration 228 Strategic Restructuring 230 Mergers 230 4103 P- FM 8/19/03 12:56 PM Page xiii contents xiii Collaboration Risk: When Partnerships Fail to Meet Expectations 231 Risk Management Checklist for Collaboration Risk Management Strategies for Successful 234 Collaborations 235 Phase I: Before a Partnership Begins 236 Phase II: During a Partnership 238 Phase III: After the Partnership Concludes 239 Collaborating with Insiders 240 Risk Management Strategies for Familiar Collaborations 241 Business–Nonprofit Collaborations 241 Insurance Considerations and Checklist 243 Drafting a Memorandum of Understanding 245 PART III RISK FINANCING FOR NONPROFITS 249 Chapter 13 Fundamental Objectives and Alternatives for Risk Financing 251 Financing Risk Management Activities 251 Establishing a Risk Financing Strategy 252 Appetite for Risk 252 Allocation of Resources 253 Post-Loss Goals 253 Risk Financing Techniques 254 Retention 255 Contractual Transfer 256 Chapter 14 Working with Insurance Professionals 259 Why Does a Nonprofit Need an Insurance Professional? 259 What Qualities Should a Nonprofit Look for in an Insurance Professional? 260 Fee or Commission? The Compensation Debate 261 Chapter 15 Insurance 263 10 Strategies for Financing Risk Responsibly 263 1. You Cannot Insure Everything 264 2. Consider Nontraditional, as well as Traditional, Financing Mechanisms 264 4103 P- FM 8/19/03 12:56 PM Page xiv xiv contents 3. Take Responsibility for Your Risk-Financing Decisions 265 4. Do Not Delegate the Insurance Program to the Wrong Person 265 5. Learning Something about Insurance 266 6. Identify a Competent Advisor 266 7. Educate Your Vendors 267 8. Read Your Insurance Policies 267 9. Welcome Competition 268 10. Welcome Cooperation Too 268 Overview of Common Property and Liability Policy Types 269 Liability Insurance Policies 269 Property Insurance Policies 275 Crime Coverage 276 Hybrid Liability/Property Policies 277 Alternative Risk Financing 279 Epilogue: A Risk Management Decalogue 281 Glossary 291 307 311 315

Item Type:	Book
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Depositing User:	Unnamed user with email [email protected]
Date Deposited:	17 May 2023 03:00
Last Modified:	17 May 2023 03:00
URI:	http://eprint.ulbi.ac.id/id/eprint/1867

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