Risk and Crisis Management for Nonprofits: Are You Up to the Challenge?

Risk and Crisis Management for Nonprofits: Are You Up to the Challenge?


Challenge #1: Fully equip your nonprofit board for success

Nonprofit missions inspire hundreds of thousands of Americans to serve on nonprofit boards. Show your board the respect it deserves by considering the following steps to maximize the board’s effectiveness.

  1. Focus on fiscal responsibility. Recognize that annual fiscal training for every board member is a must for effective, highly-engaged and accountable boards. Additionally, each board member should serve on the finance committee during his or her term. Last, consider telling your nonprofit’s financial story with visuals and easy-to-read graphs, with access to the details for a ‘deep dive’ on topics that matter to the board. Every board member shares equally in the responsibility for fiscal oversight. Nonprofit CEOs and CFOs should empower their boards by providing the information and training they need to discharge the responsibility to provide thoughtful fiscal oversight.
  2. Be prepared for meetings. The thud of a meeting gavel is not a call to start reading the board packet sent out in advance. Distribute pre-read items in advance of a board meeting. Meeting leaders can encourage proper prep by not going through each item sent in advance. When the board chair and CEO resist the instinct to simply review the packet line by line, wonderful things happen, such as discussion, consideration of challenges facing the nonprofit, and true engagement. Meetings are for discussion and decision-making. Make sure that the toughest topics are at the top of the agenda when the energy level is highest.
  3. Create a succession plan. The creation of this plan should be in the hands of the board, not the current executive director or CEO. This should be a step-by-step process and not necessarily a document that name’s the CEO’s successor. Check out the Nonprofit Risk Management Center’s infographic and helpful article on this important topic.

Challenge #2: Avoid being the deer in the headlights

Every great nonprofit occasionally faces difficult challenges, including some that threaten the survival or health of the organization. Surviving a true crisis with mission and programs intact requires thoughtful planning and a compassionate response. Create a plan, think through possible scenarios, and be as prepared as you can be for the bend in the road that you can’t see from your current location!

  1. Designate roles on a crisis response team. Reflect on your current team and decide — before a crisis hits — who has the skills and knowledge to take on the following roles in the event of a crisis:
    • Spokesperson
    • Insurance and claims expert
    • Crisis team leader
    • Document preserver
    • External spokesperson
    • Financial expert
    • Legal adviser
    • Liaison to staff and internal stakeholders
    • Liaison to external stakeholders
  2. Learn from the past. Consider using this matrix to reflect on past crises and identify lessons that will help improve your response next time. Information in Harvard Business Publishing titled, “Managing Crisis” inspired information in the matrix.
  3. Be cyber secure. As discussed in this Miller Group blog, take the proper precautions to protect you data against cyber attacks and ensure a timely response if your prevention efforts fail.
  4. Think through crisis scenarios. Unfortunate things happen to even the best nonprofits. What’s important is to have a plan. One approach we suggest is to reflect on the potential “worst case scenario” events for your agency. This matrix is one that we use to help our clients think beyond a worst case ‘headline.’ For additional suggestions, see this Center factsheet on crisis communications.

Challenge #3: Live your mission

  1. Ask yourselves: Are we the best to deliver this mission? Sometimes nonprofit teams become overwhelmed or distracted from their fundamental purpose and mission by too much programming, lack of staff, or the lure of new funding. Refocus your mission by taking a hard look at each program and service you provide, and ask whether your nonprofit is the best suited and most qualified organization to deliver it. If the answer is “yes,” the next step is to figure out steps to deliver the service effectively; if it is “no,” then it may be time to let go. This leads to another discussion on how to communicate the discontinuation of a service.
  2. Never take the “free” help for granted. Remember that no one’s time is free. Be sure to value volunteers and show your appreciation. Train not only your volunteers how to be successful, but also their supervisors how to manage, inspire and discipline volunteers. Create realistic and thorough volunteer position descriptions and always provide onboarding for new and returning volunteers. Lastly, take the time to conduct volunteer exit interviews to learn how to improve volunteer management.

Challenge #4: Diversify to flourish

  1. Create diverse teams. Many people incorrectly assume that age and other differences cause insurmountable conflict. Consider allowing and encouraging self-forming teams based on strengths and interests. Offer a project and see who jumps in. Remember that diversity of age and race are protected by federal law, and nonprofits should protect their mission and financial assets with EPLI and proper policies.
  2. Provide opportunities to complain. Simplify your complaint process and act upon complaints. Show your board, staff, volunteers and consumers you care and are willing to change for the better.
  3. Allow many voices to be heard. Often, in open discussion at board or staff meetings, the loudest voice is the only voice. Encourage the quieter voices to speak up by ‘going around the table’ and asking participants in turn for their thoughts about the subject being discussed.

Your mission is worth the time required to make your organization as strong as it can be. Consider the tips in this article to get underway. Embrace the four challenges discussed here to tune up for the challenges ahead.


Nonprofit Risk Management CenterBy Melanie Herman
Executive Director of the Nonprofit Risk Management Center



Author’s note: Melanie Herman welcomes your questions at 703.777.3504 or Melanie@nonprofitrisk.org.


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