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Leslie Tamagi and risk management for nonprofits
By Nicole Zummach
August 25, 2008
CALGARY, AB // Perhaps with the exception of Tom Cruise, most people don't want to get involved with risky business. However, in the charitable sector, risk is often part of the business because organizations are working with the most vulnerable people in our society. That's why it is so important to have a risk management plan in place. Unfortunately, it's not always at the top of the nonprofit priority list, whether because of a lack of resources or a lack of awareness. Luckily, people like Leslie Tamagi recognize the need for improved risk management among nonprofits and are doing something about it. Selected as a Muttart Fellow in 2006, Tamagi developed user-friendly resource packages, tools and training materials in the area of risk management.
CharityVillage: Why did you decide to focus on risk management?
Leslie Tamagi: I identified that it was an area where a lot of nonprofits were struggling. We are in a very risky business by the very nature of what we do; we work with vulnerable people. We largely do that work through staff and volunteers, and we're in a very changing landscape in terms of funding, legislation, and expectations of donors and other supports. And while many nonprofits do employ some risk management techniques, what I thought was lacking was a more organized and comprehensive methodology to approach it.
I have very strong beliefs that, as a sector, nonprofit needs to establish its own standards and set the bar for how organizations should operate. One of my concerns that drove my interest in this area is that I saw that if we didn't get it together as a sector, we would start being dictated to by outside bodies, like funders, about how we should be doing risk management, instead of us taking responsibility for our own sector. I've always really believed it's important that we are the ones who are driving that.
CV: When you began your research, did you feel your own organization was already leading the way in its risk management practices, or was a lot of this information new to you?

LT: I think we were very typical, in that there was lots we were doing, but we really hadn't looked at [risk management] as an overarching element. You almost need to make it part of your culture. It isn't a one-off. You need to make it part of your daily experience or it will become outdated and lost. We are trying to look at how to make it everybody's job within the organization, because it is. You can't have one person assigned to do risk management within an organization. It's such a broad topic and it encompasses everything. We're still working through it; we don't have it all figured out. But as an organization, we're certainly willing to share our experiences and what we've come up with so far.
CV: How does risk management differ in the nonprofit sector versus other sectors, if at all?

LT: Well, it does because of the nature of the work we are involved in. With for-profits, their major concern would likely be financial risk, because they exist largely for the purpose of creating profit, whereas, in a nonprofit, typically we exist to do no harm and to do good. By the nature of that, we are often working with people who are vulnerable, utilizing staff and volunteers. We may be involved in large fundraising activities; we might be involved in transportation. We typically have multi masters - many people we're reporting to, with different expectations, different requirements. We're under different legislation. The more I looked at it, the more I really believed that, in many ways, nonprofits face many more risks than for-profits, and unique risks.
The other thing is that, often, if a nonprofit does get in trouble it is much harder for them to recover. If you have a business splashed across the headlines, that's one thing. But if a nonprofit receives negative publicity - maybe it was a funding crisis, maybe it was donor dissatisfaction, maybe it was a loss of supporters - it can destroy an organization. Alternately, a business might have a bad year, and as long as they pull up their profits the next year, those things don't tend to have the same long-term impacts.
CV: What did you discover through your research?

LT: In general, everybody that I talked to within our seector knew that we had to get more organized about [risk management]. Most agencies are doing something. They might be doing staff training. They might be doing screening of applicants. But the reality is that very few organizations actually have a comprehensive risk management plan in place, or even a policy on it. So it's being done in drips and drabs. In a national survey, less than 50% of nonprofits actually have a policy or a plan. That's not to say that they are bad, or that they're not doing anything. It's kind of a classic nonprofit; you have limited resources and to devote the time and energy to pull it all together may not hit the priority list until something big happens.
CV: How did your work address this issue?

LT: What I was trying to do was help people go through the process, and make it as easy and accessible as possible. I found that there are a lot of excellent resources out there, but it takes a while to dig them out and people just were not aware of what assistance was available. In my research I found some amazing resources. If you utilize them, it's not nearly as daunting a task.
I gathered a lot of that information and then did training with organizations across the province. Most people know they have to do it, they just don't know where to start. So I found some really good assessment tools, for example, a computer software program that helps you analyze your organization and identify what the risks are. What I tried to do was package things for people, give them tools, and give them ideas of where to look so they can pick away at it. They just need to get started.
CV: Is your resource package available to people right now?

LT: The Muttart Foundation will be putting this information up on their website. I know that they are working on [it] right now, but it's not actually posted yet. I believe what they will be putting up are some of the training packages that I put together. For our organization I did a very comprehensive risk management plan, and also a crisis management disaster recovery plan.
CV: What does a disaster recovery plan entail?

LT: People really learned, unfortunately, how critical those things are after 9/11. The businesses that survived were, for the most part, the ones that had a plan in place before it happened. One day or another, you're going to face some form of crisis; it might be a small one, it might be a big one. But if you've given some thought in advance of how you are going to deal with it and you have your toolkit - for example, the group of people we need to pull together to manage the crisis, their roles and how we are going to assign tasks, how we are going to address the media, and what a sample press release might look like - chances are, you're going to come through it much quicker, get back on your feet, and get back to fulfilling your mission.
CV: What advice would you give to other organizations to help them get started with their own risk management plans?

LT: Well, I think you just have to pick a starting point and start moving forward. You don't have to accomplish it all at once. It could be that you organize a small group of people to start identifying your highest areas of risk, and then one by one you start coming up with strategies to prevent them from occurring, how to minimize the negative impact if it happens, and how to repair any damage if it does occur. You need to divide it into doable sections. And I really would encourage people to look at some of the tools available. As I said, there is some really good software; there is training online that you can access. You just have to make a commitment to start.
I also encourage people not to work in isolation on this. I'm a big believer in not starting from scratch. Ultimately, you have to figure out what works for your organization, but it's a lot easier when you have something to start with - a sample policy or example of terms of reference for a risk management committee. Those resources are there; it's just a matter of getting them out to people.
Leslie Tamagi is executive director of the Vocational Rehabilitation Research Institute (VRRI), and has been with the organization for more than 20 years. For more information about the Muttart Fellowship program, visit: www.muttart.org/homefellows.htm.
Would you like to see your organization in the Spotlight? E-mail Nicole at editor@charityvillage.com with your suggestions.