Most nonprofit organizations lack dedicated risk manager: report

A majority of nonprofit organizations are operating without a dedicated risk manager, according to results from a recent survey by Crystal and Co., New York-based a risk and insurance advisor.

Only 22% of the U.S. nonprofit organizations included in its survey said they have a dedicated risk manager, according to Crystal. Its survey received 116 responses and included a range of organization type and size.

For most organizations, the responsibility for corporate risk and insurance mainly feel under either the finance, human resources, operations or legal departments.

Still, about 80% said they have undertaken an independent assessment of their risk and insurance program at least once in the last three years, according to Crystal. Nearly 7% said they had never done such an assessment, but 36% said done so in the last year.

The survey’s respondents identified “employment-related risks, including workplace injuries”; “acts, errors or omissions in governance and management”; and “acts, errors or omissions in rendering professional services” as the top three hazards they faced.

In terms of risk management priorities, respondents said that “identifying and assessing current and future threats to the organization’s assets”; “reducing insurance premiums”; and “business continuity planning” as the top three.

In terms of spending, most respondents said they spend less than 0.25% of their annual revenue on corporate insurance, according to Crystal. The company says adequate coverage usually requires a 1% spend.

Most respondents did say they would prefer their risk advisor to be an insurance expert with knowledge of the industry, the report notes.

“Our research showed that small nonprofit organizations are arranging only the most basic forms of insurance, not necessarily those that will be vital as they grow,” Jamie Crystal, the company’s executive vice president noted in a statement on the findings.

Crystal suggests smaller organizations encourage “board-level engagement in risk management especially since they tend to also lack professional risk management expertise in-house.”

The company’s full report on risk management within nonprofits is available on its website.