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:
The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.
Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.
NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.
It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios. We are impressed with the accuracy of their employment decisions, integrity of their employees and efficiency of their claim handling. We greatly respect and value the consistent, impressive cost savings from the utilization of their outstanding services.
Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.
Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.