Table Of ContentJesse Feiler, Gail B. Nayowith
The Nonprofit Risk Book
Jesse Feiler, Gail B. Nayowith
The Nonprofit
Risk Book
Finding and Managing Risk in Nonprofits and NGOs
PRESS
ISBN 978-1-5015-1516-3
e-ISBN (PDF) 978-1-5015-0594-2
e-ISBN (EPUB) 978-1-5015-0600-0
Library of Congress Cataloging-in-Publication Data
A CIP catalog record for this book has been applied for at the Library of Congress.
Bibliographic information published by the Deutsche Nationalbibliothek
The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie;
detailed bibliographic data are available on the Internet at http://dnb.dnb.de.
© 2017 Jesse Feiler, Gail B. Nayowith
Published by Walter de Gruyter Inc., Boston/Berlin
Printing and binding: CPI books GmbH, Leck
♾ Printed on acid-free paper
Printed in Germany
www.degruyter.com
Acknowledgments
We have been fortunate to have had help and assistance from many people over the
years and particularly over the last year in which we have been working on the book
and app. Our thanks go out to Jeff Pepper at De Gruyter for putting this book in mo-
tion. Jeff has been instrumental in bringing a number of Jesse’s books to market, and
it is great to be working with him again at De Gruyter. Also on the production side,
Carole Jelen at Waterside Productions once again has guided the progress of the book,
as have Jaya Dalal and Angie MacAllister’s team: they have truly made this book pos-
sible.
In addition, Chuck Edwards and his band of beta testers have been helpful in de-
veloping the app, while Barbara Butler has also provided insight into important parts
of the nonprofit world. Michelle Lawrence in London has helped with international
information while Gary Miller and Daniel Starr helped with the New York City cultural
scene.
Bill Baccaglini and Jennifer Geiling were early thought partners on risk assess-
ment and why it matters. The Human Services Council pushed our thinking on the
sources of nonprofit risk and Gabby Sheely brought fresh insight into the process of
enterprise risk planning. Frank and frequent discussions with Larian Angelo about
operating risk in local government as contrasted with public universities and other
nonprofits, filled an important conceptual gap.
Contents
Part I: Nonprofit Risk and Mitigation 1
Chapter 1: Thinking About Risk 3
What’s Special About Nonprofit Risk? 5
The Nonprofit Business Model Creates Risks for Many Nonprofit
Organizations 5
6 Common Warning Signs of Underlying Risk 6
What Is Risk? 7
Types of Risk 8
Dimensions of Risk 8
Categories of Risk 9
5 Operating Risks in Key Organizational Pillars 9
Why Nonprofit Enterprise Risk Management Matters 9
Risk Profile 10
Appetite for Risk 11
Summary 11
Chapter 2: Getting Started with Enterprise Risk Management 13
Defining Enterprise Risk Management 13
Getting Started with Enterprise Risk Management 14
Teeing Up the ERM Planning Process 15
Stage 1. Readiness and Rollout 17
Step 1. Taking Stock of Your Organization and Its Readiness for ERM 17
Step 2. Find Champions and Build a Team 20
Step 3. Engage Managers, Staff, and Board in Risk Assessment 20
Step 4. Frame out the Process 22
Stage 2. Risk Identification and Assessment 22
Step 1. Risk Identification 23
Step 2. Risk Assessment 26
Step 3. Organize and Describe Risks 28
Tools for Risk Assessment 30
Likelihood/Impact Matrix 32
Moving to ERM Mitigation Planning 33
Summary 34
Chapter 3: Risk Mitigation Plan Development & Monitoring 35
Turning Your Risk Assessment into a Risk Mitigation Plan 36
Step 1. Develop an Enterprise Risk Policy that Describes the Overall
Framework for ERM Activities 38
viii Contents
Step 2. Use Tools to Develop Mitigation Action Plans (MAPs) to Manage Risk
Management Activities 39
Step 3. Develop a Reporting Process to Monitor the Status and Completion
of Risk Mitigation Activities 40
Step 4. Develop Indicators to Track and Report Risk, Summarize Mitigation
Activities and Document Resolution 41
Step 5. Create a Schedule for Monitoring ERM Plan Implementation and
Reviewing the Effectiveness of Mitigation Strategies 44
Creating a Risk Register and Risk Mitigation Log 45
Reporting and Mitigation Accountability Strategies 48
A Note on Residual Risk 48
Implementing Your ERM Plan and Monitoring Risk 48
Summary 50
Chapter 4: Making It Work 51
Getting Started 51
The Nonprofit Risk App 54
Navigation (Top Controls) 55
Tab Bar (Bottom Controls) 56
Readiness and Rollout 56
Risk Identification and Assessment 57
Building the Risk List 58
Turning the Risk List into a Risk Register 60
Risk Mitigation Plan Development & Monitoring 62
Summary 64
Part II: Nonprofit Operating Risk 65
Chapter 5: Programs & Services 67
Focusing on Mission 68
What to Watch For 69
Prevention 70
Mitigation 70
Providing Programming & Services 71
What to Watch For 71
Prevention 72
Serving the Public: Patrons, Audiences, and Clients 73
What to Watch For 73
Prevention 73
Working with Other Organizations 75
What to Watch For 75
Prevention 75
Contents ix
Mitigation 76
Planning for Sustainability, Resizing, and the Future 76
What to Watch For 76
Prevention 77
Mitigation 78
Summary 78
Chapter 6: Personnel 79
Working for Good 79
Personnel in Action 80
What to Watch For 80
Conflicts of Interest 81
What to Watch For 81
Prevention 82
Conflicts of Role 83
What to Watch For 83
Prevention 83
Working with Management 84
What to Watch For 84
Prevention 84
Mitigation 85
Managing Credentials and Performance Appraisals 85
What to Watch For 86
Prevention 86
Summary 86
Chapter 7: Environment, Regulatory, and Compliance Issues 87
Managing in the Community and Operating Environments 87
What to Watch For 88
Prevention 89
Managing Compliance and Regulations 90
What to Watch For 90
Prevention 91
Responding to Catastrophic Environmental Risk 91
What to Watch For 92
Being Part of the Nonprofit Environment 92
What to Watch For 93
Prevention 93
Summary 94
