Risk Management: A Tool for Sustainability

Protecting your organization’s reputation and credibility

Author: 
Richard Klarberg

Take a moment to consider the current reality of many nonprofit human service organizations. On the one hand are reduced reimbursement rates, diminished endowments, fewer contributions, and state funding cuts. On the other hand are increased rates of domestic violence, substance abuse, and homelessness—all brought about by rising unemployment, home foreclosures, and a credit squeeze. 

The result is increased demands on human service agencies coupled with reduced resources. In other words, a testing ground for the endurance, survival, and leadership of so many relevant and capable community-based organizations. 

As such, one of the most important and yet difficult undertakings organizations are faced with at this moment is to put in place a comprehensive and effective risk management strategy. This means anticipating and developing effectual and efficient responses to problematic issues before they occur. It is only by doing this that human service organizations, and those connected to them, will be able to protect their human, physical, and financial resources, including two of their most valuable assets: reputation and credibility in the community. 

The Council on Accreditation’s 8th Edition Standards addresses the need for you, your colleagues, and your governing body to implement a risk management strategy that is designed to:

  • work with your governing body to review your current strategic plan and—if necessary—revise it in the light of existing conditions and potential risks;
  • establish and periodically revise your “Plan B” so that you can respond to abrupt changes in your organization’s financial capacity with quickness and flexibility; 
  • examine all planned capital expenditures and current expenses while continuing to provide high quality services;
  • protect the best and the brightest on your staff by promoting sound, consistently applied human resource policies (as you know, replacing good staff is expensive in terms of time, money, and morale);
  • demonstrate to funders, taxpayers, and clients that your services quantifiably and cost-effectively impact the lives of those you serve; and
  • steadfastly maintain the highest expectations for ethical practice in your organization’s business dealings, professional relationships, financial management, and fundraising practices.

As the Boy Scouts say, “Be prepared!” Let’s begin today in preparation for tomorrow.

Richard Klarberg is president and CEO of the Council on Accreditation (COA), a nonprofit organization that accredits or is in the process of accrediting more than 1,800 human and social service providers. He is an experienced negotiator, administrator, and attorney with more than 30 years of nonprofit management experience. Before coming to COA in 2001, he served as senior vice president for a nonprofit group of 18 hospitals and as executive vice president of the American Health Foundation. He holds a bachelor’s degree in journalism from Queens College and a law degree from Brooklyn Law School. He can be reached at 212-797-3000, ext. 260, or by e-mail.

 

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Published In: 
Issue 2 – 2009