Academic journal article Risk Management and Insurance Review

Enlightened Risk Taking, A Guide to Strategic Risk Management for Nonprofits

Academic journal article Risk Management and Insurance Review

Enlightened Risk Taking, A Guide to Strategic Risk Management for Nonprofits

Article excerpt

Enlightened Risk Taking, A Guide to Strategic Risk Management for Nonprofits, by George L. Head and Melanie L. Herman, 2002, Washington, D.C., Nonprofit Risk Management Center.

While written for nonprofit entities, the ideas carefully explained in Enlightened Risk Taking are quite relevant to for profit organizations as well. It is one of the few books that addresses the management of speculative risks as well as pure risks. Managing the upside risk of an unexpected donation is included along with the more traditional worker injury risk. According to the authors, "strategic risk management strives to nourish a nonprofit's resources by empowering it to seize opportunities to grow toward greater mission fulfillment." The book "seeks to counter all losses both from accidents and from unfortunate business judgments, and to seize opportunities for gains through organizational innovation and growth."

Chapter 1, The Several Surprising Sides of Risk, explains basic concepts of risk and risk management objectives in easy to understand language and outlines a modification of the risk management process that the lead author introduced over 30 years ago.

In chapter 2, Appraising Potential Surprises, the authors analyze a nonprofit's four classes of assets-people, property, income, and reputation. The threats to these mission-critical values are carefully explained along with the upside risk of opportunities that may increase the value of these four asset classes.

Chapter 3, Putting the Pieces Together, applies the risk management process while chapter 4, Risk Control for Maximum Benefit emphasizes the importance of preventing and reducing loss causing events in order for the nonprofit to fulfill its mission. …

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