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Most nonprofits operate without a risk manager: Survey

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Most nonprofits operate without a risk manager: Survey

Most nonprofit organizations operate without a dedicated risk manager, according to a survey by insurance brokerage Crystal & Co.

The study, “Nonprofit Risk Survey,” includes responses from 116 U.S. nonprofits, such as human services; foundations; and community service, educational and religious organizations with revenue ranging from $20 million to more than $500 million, New York-based Crystal & Co. said Monday in the report.

According to the survey, only 22% of nonprofits had a dedicated risk manager. For most nonprofits, risk management and insurance is handled by the finance, human resources, operations or legal departments.

Eighty percent said their risk and insurance program had been independently assessed at least once in the past three years. While 7% of respondents said they never assessed their risk and insurance programs, 36% of nonprofits had assessed their risk within the past year.

“For a nonprofit organization, risk management is paramount because it's crucial that this sector protects its operations, personnel and reputation as complex risks continue to evolve,” John C. Smith, executive vice president at Crystal, said in a statement.

Top hazards facing nonprofits include employment-related risks such as workplace injuries, errors or omissions in governance and management, and errors or omissions in rendering professional services, according to the report.

The largest group of respondents, 38%, said their insurance spending is less that 0.25% of annual revenue.