Florida Atlantic University
Nonprofit Resource Center
Risk Management

Risk Management is the attempt to minimize liabilities or the amount of loss of a non-profit’s assets. Insurance is the usually the first thing most people think of when discussing risk management. The following links and descriptions are intended to educate about not only insurance options, but the many other factors which may cause increased liability to a non-profit. They run the spectrum from protecting data integrity and addressing personnel problems and legal matters to covering the accountability of non-profit’s board members. These sites are intended to help identify risk and provide effective risk management techniques to non-profits.

What is Risk Management?
http://www.allianceonline.org/faqs/rmfaq1.html
Characterizes risk management and how risk can compromise an otherwise healthy non-profit organization. Defines a non-profit’s assets and gives a good overview of the field of risk management.

What are the most common risks facing nonprofit organizations?
http://www.allianceonline.org/faqs/rmfaq2.html
A solid introduction which defines what risk management means to non-profits and some of the most common risks faced by these organizations. Discusses employment practices, fraud and legal requirements.

What are the most dangerous myths about nonprofit liability (or risk management)?
http://www.allianceonline.org/faqs/rmfaq5.html
This page is intended to dispel popular myths that have pervaded non-profit organizations over time. It discusses charitable immunity, buying insurance and the frequency of lawsuits against non-profits.

Computer and Network Security
http://www.mapnp.org/library/infomgnt/security/security.htm
Provided through The Management Assistance Program for Non-Profits. This site gives basic know how instructions regarding protection of organization’s data, identification of viruses along with links to newsgroups and newsletters for continually updated information.

Some Legal Considerations for Board Members
http://www.mapnp.org/library/legal/lgl_thot.htm
Some basic legal advice for non-profit board members intended to minimize risk. To summarize the page, its author stresses the concept of ‘Trust but Verify!’.

What is the board of directors' role in managing risk?
http://www.allianceonline.org/faqs/rmfaq4.html
The page is specific to the board of directors and their responsibilities to the non-profit organization in minimizing risk. It also discusses personal liability in decision making. It emphasizes the idea that the board is in the greatest position to handle risk and points out some ‘hot spots’, or areas in which claims arise most often.

Risk Management and Insurance
http://allman.rhon.itam.mx:80/~tapen/classnotes/RMI/rmi1/index.htm
This site is from a 1998 class lecture in risk management and proper insuring of risk. Addresses concerns of stakeholders and management. Also provides a step by step approach to the decision making processes, including possible consequences of decisions.

Nonprofits' Essential Handbook on Insurance
http://www.iiaa.org/Consumer/Business/NonProf.htm
This site is an overview on purchasing insurance for non-profit organizations. It provides for the purpose of insurance, how and what type of insurance to buy based upon the nature of the non-profit’s activities. It also tells how to file a claim and manage multiple claims.

An Insurance Guide for Non Profit Organizations in Washington State
http://www.insurance.wa.gov/readonline/nonorgs.html
This site is from the State of Washington homepage and has detailed descriptions of laws in that state. However, there is a lot of general risk management information here that is not state specific and can be used in a larger applied context.

What constitutes a basic insurance package for a nonprofit organization?
http://www.allianceonline.org/faqs/rmfaq7.html
More valuable insurance information for protecting your non-profit from risk. Covers insurable risks and advises in creating an effective insurance package to suit your needs.

Volunteer Insurance Service
http://www.cimaworld.com/htdocs/volunteers.cfm
Cimaworld offers insurance coverage and plans for non-profit volunteers, directors and officers. This site provides links to sample applications and offers a variety of specialized options including the ability to keep coverage separate from a non-profit’s commercial general liability policy.

Volunteer Legal Handbook
http://www.ptialaska.net/~jdewitt/vlh/
The on-line version of a handbook on law and risk management for nonprofit corporations, directors and volunteers. Extremely comprehensive guide, answering a number of legal questions within it, including the proper way to incorporate a non-profit.

Federal Law Protects Nonprofit Volunteers
http://www.nonprofitissues.com/ready/rr97dec1.html
This article discusses an act passed by the federal government designed to ‘reduce the standard of liability to gross negligence, flagrant indifference’ for non-profit volunteers.

What risks are associated with nonprofit fundraising?
http://www.allianceonline.org/faqs/rmfaq6.html
Gets right down to specific potential pitfalls of improper fundraising practices. Uses a case study as an example of mismanaged fundraising. Gives management advice as well as tips and techniques to ensure minimizing risk in fundraising.

How should we conduct reference checks to minimize our liability?
http://www.allianceonline.org/faqs/rmfaq18.html
Covers the two most common problems non-profits encounter when completing reference checks. Also discusses value of reference checks and potential liability that can be faced when giving references of former employees.

What is our exposure for defamation claims?
http://www.allianceonline.org/faqs/rmfaq19.html
Continuing in the vein of employee references, this page examines how to handle a situation where a reference of a former employee is given a reference which then results in a defamation suit against the non-profit. This also extends to client document mishandling which may lead to the public being aware of sensitive information.

What is a risk management committee?
http://www.allianceonline.org/faqs/rmfaq3.html
Risk management committees are most often employed in larger non-profits, but this page offers some insight into how and why to put this method for protection of assets into action. It also identifies the core responsibilities of the risk management committee and gives ideas to the smaller non-profits with budgetary constraints.

What are the most common financial management risks facing nonprofits?
http://www.allianceonline.org/faqs/rmfaq1.html
Non-profits have their assets broken down into three main categories: money, goods and services. This section focuses on the reduction of the loss of those assets. Fraud, investments, tax liabilities and general financial management risk control strategies are explored here.

Policies for Financial Accountability
http://www.nonprofits.org/npofaq/18/58.html
More insight into the risks associated with governing the financial aspect of a non-profit. More policy oriented material, section 6 focuses directly on the risk management material.

COMMON-SENSE MEASURES PREVENTING EMPLOYEE THEFT
http://www.sbaonline.sba.gov/gopher/Business-Development/Success-Series/Vol6/theft.txt
Non-profit staff stealing from the coffer? Never. Well guess again, this problem does exist, read this link for ways to identify staff theft and employ strategies to deter such actions. Ways to identify schemes and identify those people you can trust.

Risk management information and resources
http://www.riskinstitute.org/
After clicking on the link above, be sure to then click on the RMRC link from the next page that loads. This site provides a wealth of information regarding all aspects of non-profit risk management and the resource center (which cannot be accessed directly from a link here) provides a library of resources useful to non-profits.

Rupp's Insurance & Risk Management Glossary
http://www.nils.com/rupps/
This simply organized site allows for the user to simply put a term or phrase into a risk management glossary search engine and receive contextual definitions of those words.

The Non-Profit Risk Management Center
http://www.nonprofitrisk.org/
Risk management just simply too much for your organization to handle on its own? Turn to this site from a for-profit company that offers newsletters, tutorials and general risk management advice for non-profits.

Violence and Harassment in the Workplace: How Great Is The Risk In Your Company?
http://www.mcclureassociates.com/quizframe.html
Non-profit liability in this arena is no different than in the private sector. This page helps evaluate the potential liability should a claim of this nature arise. Also to help identify the problem before it gets out of hand.

Guide by Justin Begley