August 1, 2013
Many nonprofits found it difficult to keep their heads above water during the financial crisis. While the recession seems to be a thing of the past, many decision-makers at organizations today have learned their lesson and are making risk management a higher priority, setting aside more their of budgets to focus on potential threats.
Nonprofits are run similarly to many for-profit companies, which were recently surveyed about risk management practices by Deloitte. The "Setting a Higher Bar" study found roughly two-thirds of financial institutions are ramping up their spending on combating some of their issue the organization can face down the down.
Risk management has become more important
In the past, organizations thought they could focus on threats without having to make big changes that could affect the future, but now the study found 48 percent of firms said increased regulations have led them to adjust practices. Increased regulatory issues are just one concern risk management teams can help decision-makers with, which is why 39 percent or larger organizations that took part in the survey have more than 250 full-time employees working in risk management.
In addition, 62 percent of respondents have a enterprise risk management program in place, while 82 percent either have a strategy or are developing new initiatives for risk management, a 23 percentage point increase from a similar study conducted in 2010.
Organizations can save their reputation
The last thing nonprofits want is to be placed in compromising position, demonstrating why risk management has gained traction in recent years. However, it is troubling that less than one-quarter of companies surveyed by Deloitte believe their technology used to monitor risk is effective while 40 percent are concerned about their capabilities to protect related data. Nonprofits often have a lot of donor information stored in their virtual infrastructure, and could simply not afford to experience a data breach.
"Where concerns linger particularly is around operational risk, with a number of recent headlines – like management breakdowns and large-scale cyberattacks – underscoring the important impacts this area can have on a firm's reputation." said Edward Hida, global lead of risk and capital management services at Deloitte. "This is a gap that needs to be addressed."
Better decisions happen when risk is understood
Many nonprofit leaders understand how potential risks have changed strategies for organizations throughout North America. This is why decision-makers have to be more informed than ever, and the only way to gain the knowledge is to seek out the insights they need by being a part of important conversations.
These instances illustrate the importance of being able to make good decisions. An article for The NonProfit Times shared a list of strategies to use protect the organization from bad choices:
First Nonprofit has saved us so much money over the state’s program. We had one little glitch with the state recently and we contacted FNP immediately. FNP staff called us back immediately and moved to remedy the problem.
First Nonprofit has been a great partner. They have helped us saved hundreds of thousands of dollars! They have awesome resources for our nonprofit organization. Thanks for the partnership.
Life is certainly busy these days but having business partners like First Nonprofit has made some of the process hassle free. We have worked with this team for years. When we changed payroll systems, they outlined every step. I think this team is terrific and I know they get the job done! Thank you, Cruz, to all the team at FNP.
FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!
Chicago Children’s Theatre has greatly benefited from our partnership with First Nonprofit, and I have always enjoyed working with the staff on our filings and any complicated questions. I would not hesitate to recommend First Nonprofit to fellow nonprofits. We’re very happy customers.
FNP is a great resource for Daniel Kids. To have a TPA that we can count on to take point on not only managing our unemployment claims, but to support and guide any protest hearing, is invaluable. All the professional support staff we have worked with have been excellent, very knowledgeable and responsive. We are grateful for the help and support, thank you.
When I first began in my position at my organization, I hadn’t had experience working with a company like FNP. The staff was so patient and helpful in helping to explain the benefits of First Nonprofit. Anytime I reach out with a question I receive a quick, clear, and thorough response. I’m so thankful that we decided to partner with FNP. Their excellence in customer service, coupled with their variety of packages frees us up to truly serve our staff and community with a peace of mind knowing that our organization is protected against unanticipated unemployment insurance expenses.
First Nonprofit gets an A+ in my book. You are so easy to work with & very knowledgeable! Whether it is my quarterly correspondence with Kim or my random interactions with Dawn about a bond … I am so pleased that I get to work with such a helpful company. Thank you!