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Risk Management in your Nonprofit – Building a Culture of Proactive Management

As part of their duties and responsibility to the organization, church and ministry leaders need to recognize the importance of identifying and managing the inherent risks associated with operating their ministries. It is not uncommon for boards to assume that the staff have the “bases covered” and that the proper amount of insurance is in place to protect the organization.

But not everything can be solved with insurance. Insurance cannot protect an organization from the bad publicity that follows when a child is abused on campus. Nor can it defend against the anger of a congregant whose spouse has been counseled by a member of your staff and is now seeking a divorce. Then there is the public outcry (and potentially lost donations) that can arise when it becomes known that serious embezzlement has been occurring within the organization over a long period of time.

Serious risk demands a serious approach be taken to ensure that potential risks are identified and action steps taken to eliminate, mitigate, or insure against their occurrence. Many experts advocate organizations take a comprehensive approach to managing risk that involves both careful assessment and ongoing oversight of the issues. No one can anticipate every potential issue that can arise. But when examined “holistically” (http://www.churchlawandtax.com/blog/2012/september/building-culture-of-risk-management.html) it can help ensure that you are able to better identify and plan for the potential risks that could impact your ministry.

Many industry experts also recommend organizations establish and staff a risk management team to: (a) assess the particular risks to the organization, (b) determine what actions need take place to eliminate, mitigate, or insure against their occurrence, and (c) to monitor and revise practices on an ongoing basis (https://www.safechurch.com/Resources/sc/SafetyMinistry/crmteam.pdf).

We encourage you to consider what your organization may need to do to improve on its risk management practices and then work to put in place the protections needed to help ensure your organization is a safe from potential risks and you can make it.

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