“At least one degree further.” I didn’t quite get it, but what he was alluding to, in his wisdom stemming from many years of nonprofit support and leadership, was that we’d not covered all of our bases. We’d actually missed a few important protective measures to ensure our nonprofit was not only a success, but that it would last in the face of inevitable adversity.
Your nonprofit may not be much different than ours… Aimed at helping an under-served corner of your community through an activity in which you have a lot of experience. You have your cause defined; your board hand selected; your fundraising events planned; your media lists compiled; your grants targeted; your beneficiaries primed; your paperwork filed; your permits pulled; your training(s) scheduled; your volunteer forms created… I mean, you’ve obviously crossed every “t” and dotted every “i” right?
Every nonprofit begins with the best of intentions. And that’s just it… nonprofits arise out of and are driven by good, no, make that great, intentions. The overwhelming majority are not begun with, or even grown by, savvy business and management practices, which unfortunately often leave even the most noble of nonprofits subject to risk exposures that, if unfortunately realized, will shut down the nonprofit faster than you can say ACORN.
Most nonprofits understand their basic insurance needs and thus purchase General Liability and Property insurance. But there are many mistakes made when other risk exposures are not properly covered… let alone addressed. Let’s look at the often overlooked ways of protecting the success of your nonprofit.
One of the biggest mistakes I see nonprofits making is not protecting themselves from volunteers driving their own vehicles on behalf of the nonprofit… even for such simple things as picking up donation items or carpooling to a fundraising event. Hired and Non-Owned Auto insurance policies are relatively inexpensive and protect against litigation occurring from auto accidents that occur when a volunteer, director or employee are utilizing their own vehicle (or a rented vehicle) for nonprofit purposes.
Another fairly large mistake most nonprofits make is not having a Directors & Officers Liability insurance (D&O) policy. D&O insurance is necessary to attract and allow competent professionals to serve as supervisors of organizations without fear of personal financial loss from a legal action brought for alleged wrongful acts in their capacity as directors and officers… quite often brought against the whole board for the actions of just one individual. A few friends of mine and I will not even serve on nonprofit boards where D&O insurance is not purchased. There’s just too much personally at stake to not be protected against someone else’s potential missteps.
The last one I will mention here is Product Liability insurance, which needs to be obtained to protect your organization from lawsuits by customers/constituents claiming they were hurt by an unsafe or defective product you provided. Remember that bake sale fundraiser you did last month? Without Product Liability insurance, a claim from the lady who got sick from that undercooked zucchini bread she bought, might be more than your nonprofit can afford. Without the insurance needed to cover that litigation, your nonprofit may very well have to close its doors. Those poor, underprivileged, clown-school hopefuls from Antarctica will just have to find their support from another source!
So, whether you are bringing awareness to the plight of small-handed venti soy-cappuccino drinkers, or raising funds for the implementation of a community helium tank for Karaoke night shenanigans, or even seeking donations of top-tier grass seeds for the raising of grass-fed cattle for the annual local 4th of July homeless & disenfranchised steak feed BBQ… you should make sure that your non-profit is properly protected against the various risk exposures that could derail your efforts. Oh, and it might be good to ensure your charitable endeavors are viable and allowable in your state… my guess is that, while hilarious, your brain-cell killing, helium-infused Karaoke nonprofit won’t fly.