TIM BRANGWYN, managing director of insurer MILLSTREAM UNDERWRITING, says risk management should be embedded at an early stage in a charity’s growth plan.
Extraordinary people make extraordinary things happen. The courage, determination and talents that drive charity workers, staff, fundraisers and volunteers to the most difficult territories, often in the most difficult circumstances, set them and their charity apart.
Charities are launched for all the right reasons, above all getting people out in the field to make a difference. But a growth strategy that does not address the risks faced by charities may result in unexpected consequences that are detrimental to future expansion, and potentially limit the overall success and reach of a charity.
After all, growth goes hand in hand with risk - simply put, the more people an aid charity has in the field, the higher the charity’s exposure to the overall risks its workers face. Properly understanding, and managing these risks is the key to sustainable growth, and charity managers have an opportunity to demonstrate the value they bring to the charity through effective, strategic risk management.
And, as the case of four experienced aid workers who were kidnapped in southern Nigeria last year so poignantly demonstrated, the risks the teams on the ground can face are real. A case that tragically resulted in the death of one British aid worker.
It is a sad fact that the risk of kidnap and ransom sits alongside "normal" risks charity workers face, including natural disasters, epidemics and pandemics. And while the largest charities often benefit from, and are able to afford, dedicated risk management resources, many others find their funding is stretched, which can leave gaps in the support that they give. Clearly, there is demand for cost effective, comprehensive risk management support for the charity sector.
GOT FUNDING? GREAT! PAUSE AND FOCUS ON THE RISKS. For many charities, pausing and focusing on the threats and risks facing charity operations often happens later rather than sooner, with funding understandably the initial priority for all.
Take, for example, a charity which, a decade after its launch, has finally received the excellent news that additional funding has been granted. Along with the great publicity that this entails, the future is looking positive. More funding means growth, more publicity and so on.
Fast forward a year, and the charity in question has been able to respond to challenging crises under difficult circumstances thanks to the fresh funding, with success stories making headline news almost weekly.
But with cash injections like this often leading to rapid spikes in activity, charities must pause and consider the escalating risks they face by embarking on a higher level of activity. After all, one particularly badly managed response can severely test systems that have taken years to build. How would your staff deal with such an event? Would your funding be questioned? What would the effect be on those who have come to rely on you?
Other challenges arise. How would you control communications to stop a media “witch hunt”? Could management time be easily diverted from planned projects to concentrate on a publicity crisis resulting from an unforeseen event? Mitigation of such risks starts with communication and systems plans. That’s all very good but if growth has been sudden and has raced ahead of management controls, aligning yourself with expert help is crucial.
Robust risk management is not optional of course. The Charity Commission requires the boards of trustees to make an annual statement confirming that the major risks to which the charity is exposed have been reviewed, and systems or procedures have been established to manage those risks. Organisational resilience (such as IT), environmental concerns and corporate governance are often, rightly, areas of focus. Has equal consideration been given to the risks people face in the field?
Help in preparing, responding and recovering from a crisis may be the mission of many charities, but getting the right risk management support at an early stage should always be part of the growth plan. And this thinking must apply no matter how rapid that growth or how eager the organisation is to expand its presence in the field after successful fundraising.
A comprehensive risk management strategy backed up by the most appropriate insurance package not only provides restitution, but also access to and support from a network of expert risk and crisis management consultants.
MAKING THE RIGHT CHOICES. There are lots of insurance products aimed at charities available but does your risk management partner have the real work background that is needed? After all, if the worst should happen, prompt, expert help may be required without delay, for instance, to repatriate or evacuate staff as soon as possible.
It sounds obvious, but risk management partners should be experienced when it comes to responding to emergencies quickly and efficiently. The best specialist insurance providers also offer charities pragmatic assessments to help support and improve their existing risk management policies and procedures.
At the same time, never before has news and publicity been so crucial to the charity sector. With the momentum that social media can bring, and acute attention it focuses particularly in a crisis, the power of negative publicity must not be underestimated. Even the biggest can fail under the spotlight.
Do trustees understand the insurance covers available and the risks that they do and do not protect against? Comprehensive cover should address the liability and reputational risks that charities and their employees face, including emergency assistance (repatriation, medical expenses etc), crisis management and public relations cost to manage surges in publicity. Covers such as personal accident, travel, kidnap and ransom should all be given the same consideration as trustees, employers and other liability insurances.
Existing good practices in place should also be rewarded by your insurer - after all, effective planning to avoid the worst happening must bring benefits. Difficult and challenging exposures should be explored in detail - your insurer should work closely with you to really understand what’s going on, how the risks are managed and price them accordingly.
There can be a temptation to opt for the lowest price coverage given how stretched the resources at some charities can be. But a cost effectiveness approach is clearly more sensible - particularly when considering the cost to a charity of repatriating staff if its insurance doesn’t provide cover. “See the small print” is not a phrase a charity manager will want to hear in a crisis.
Being aware, being prepared, and selecting the right partners will encourage better decision making and responses in the event of the worst happening. Proactive risk management, risk planning and training are essential, as is having the best backup and support in place that allow resources to be allocated rapidly and effectively in a crisis.
Charity workers make extraordinary things happen, and they deserve the best possible support if things go wrong. As so many charities know, experience, pragmatic advice and support can make all the difference in a crisis. This knowledge must be equally applied within their own organisations to support a charity’s sustainable, successful growth.