For a 501(c)(4) social welfare nonprofit established to accomplish a specific goal or promote certain values, risk may feel like a secondary concern to accomplishing the team’s mission. But to a significant degree, running any type of organization is first and foremost about managing risk.
Risk comes in many shapes and sizes: legal, employment, financial, and so on. By proactively assessing sources of risk and making plans to address each of them, a 501(c)(4) puts itself in a position to succeed over the long term. It also ensures that the interests of donors, volunteers, and other key constituencies are protected.
These are a few things every 501(c)(4) should think about as part of their risk management review:
- Get the right insurance.
Not every insurance broker works with nonprofits. A broker who lacks experience in the field may not have the necessary awareness of nonprofit governance and financial planning to provide sustainable, affordable insurance solutions. By finding a broker who understands 501(c)(4)’s a social welfare organization can start off with a competent review of its insurance needs, taking into consideration its current risks and future plans.
- Don’t neglect workers’ comp and accident risk.
Every state has its own requirements for when an employer must provide workers’ compensation insurance. Once subject to workers’ comp rules, a 501(c)(4) doesn’t just need a workable insurance policy. It also needs to take seriously the sources of potential injury that could drive up its premiums and reduce the efficiency of its workforce. A small investment in ergonomics and other workplace safety considerations can pay off in the long run.
- Adopt clear policies on important topics.
Having well-crafted written policies not only provides an organization with consistency and can prevent “rogue behavior” by an over-zealous individual. Every organization must evaluate for itself which policies are important to it. Most nonprofits will need policies covering important topics like fundraising, banking, volunteer management, and communications.
The Church Law Center understands 501(c)(4) risk.
The Church Law Center of California routinely works with leaders of 501(c)(4)’s of every size to help them build strong and sustainable organizations. If you have questions about how to best protect your 501(c)(4) from risk, we’re here to help. To schedule an appointment call us at (949) 689-0437 or reach out through our contact page.