I’ll admit to being blown away by Roger’s post yesterday, Are Your Fundraising Proceeds Insured? He was discussing the issue of whether nonprofits could insure against lost fundraising returns due to ‘business interruption’ — in this case, interruption due to hurricane damage. A concept I’ve never thought about.

And the answer seems to be ‘Yes’, at least as demonstrated by the success of Houston Public Media after Hurricane Ike in 2008.

As Roger commented, Houston Public Media was/is to be complimented for its business savvy in preparing for such a scenario, as well as its ability to mount the required financial case for what loss was actually incurred.

That got me to thinking … what other fundraising risks should nonprofits be prepared for? I’m thinking of any eventuality that might seriously compromise the ‘normal’ or ‘projected’ success of your currently planned fundraising efforts.

For example, Roger mentioned ‘rain insurance’ for an outdoor fundraising event.

But I’m not thinking only of ‘insurance’ in the narrow ‘insurance policy’ sense, I’m really talking about risk management broadly.

Here are some risks that come to mind …

  • Donor data loss through IT failure or physical damage (what back-up systems in place?)
  • Donor data theft or hacking (what security measures in place?)
  • Integrity threat — e.g. CEO convicted of fraud, misuse of funds (what audit measures in place? And what contingency plan for communicating with the public and donors/members?)
  • Loss of key fundraising personnel — we’re all replaceable, but what I have in mind here is loss of institutional memory (what record-keeping systems in place for testing history, creative used, performance of specific campaigns/channels, major donor profiles, best practices, business rules, etc?)
  • Competitive threat — not the normal, ‘taken for granted’ type, but the emergence of a real game-changer (organisation, regulatory change, event) that might threaten your lunch.
  • Others?

Businesses, public bodies and major institutions normally maintain ‘risk registers’ (by whatever name) that systematically identify significant threats and risks and ensure measures are in place to deal with those contingencies. And often smart orginizations find it useful to include ‘outside’ eyes in the identification and assessment of risk to offset the ‘in-house’ complacency, group think or myopia, reflecting a closed culture that itself constitutes a risk of sorts.

What risk avoidance and management tools or systems does your nonprofit have in place to avoid or mitigate fundraising disaster?




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This article was posted in: Fundraising analytics / data, Fundraising philosophy/profession, Major donors, Nonprofit management.
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