Tips for Balancing New Nonprofit Opportunities and Risks

Tips for Balancing New Nonprofit Opportunities and Risks

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How One Summer Camp Property Approached New Revenue Stream

When the company producing the Tumbleweed and Dancefestopia music festivals asked about taking over the bucolic, rural Kansas Wildwood Outdoor Education Center, Executive Director Robyn Ratcliff immediately thought about the risk. The revenue potential was exciting, but she also knew she’d need to balance the potential pitfalls.

“This was obviously well outside the scope of our day-to-day programming,” said Robyn. “But the revenue potential was appealing. While the campers are only here about 120 days of the year, we have to keep the property up all year long. The income from these festivals could make a big difference to us.”

Get your broker involved early
Festival activities like helicopter rides, zip lining and hot air balloons were not typical for the property, and Robyn recognized the extra exposure they would bring. She got The Miller Group involved early to help her identify potential concerns as she negotiated with the production company.

And it was a good thing she called early, because it took a while to find coverage. When Wildwood’s current property and casualty carrier declined to cover the event, we went to the market, and several carriers weren’t interested. We ended up finding an excess specialty market broker who realized we were only asking for coverage for the leasing of the land; the production company had its own insurance as the sponsor of the event itself. In the end, the production company paid the modest cost of extra coverage on Wildwood’s behalf.

Check in before adding activities
Wildwood’s experience is a great example of why it’s important to consult your broker before you embark on any new activity that’s outside your normal scope. That can include things like:

  • Holding a fund raiser where you’re serving alcohol
  • Adding a drone
  • Inviting a petting zoo to your children’s event
  • Adding a new type of staff professional
  • Serving a new type of client
  • Adding a role that includes driving an automobile, motorcycle or golf cart
  • Adding client transportation services

Understanding your potential risks with these new services will help you better plan and budget for them. Your broker should be able to assist you in finding coverage to ensure you’re protected on day one.

Consider your other stakeholders
The Wildwood board was involved in this decision from the start. And they also considered the opinions of their campers and the general public. They took steps to make sure the facility name and programs were not associated with the festivals – asking the producers to publicize the address only, rather than the Wildwood name. They also got input from their founders and donors before making the final decision.

“This has been a positive experience for us overall,” said Robyn. The additional revenue is allowing Wildwood to provide scholarships annually to about 100 extra kids who would not otherwise be able to attend camp.

Working with a risk management advisor that understands the unique challenges of nonprofits can be a real value to organizations like Wildwood. It’s gratifying on our end as well, knowing we’ve helped further Wildwood’s mission to transform summer into a season of learning, development and outdoor adventure for low-income Kansas City area youth.

By Tammy Doherty, Account Manager, Property and Casualty

See Also:

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Risk Management: How To Catch Complaints And Violations Before They Occur

9 Ways To Reduce Your Insurance Risk

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