5 Trends in Nonprofit Risk for 2022

By Angela Rimgaila and Joseph Buffalano

The new equation for non-profits doesn’t quite add up. 

Reduced staff + increased expenses + greater demand for services is at odds with fewer fundraising opportunities + COVID-era relief funds coming to an end. How can nonprofits not only stay afloat but thrive in 2022? 

There’s no doubt nonprofits are facing new challenges in this post-COVID era. Compared to pre-pandemic levels, a recent study found that 75% of non-profit organizations reported that demand for their services had increased, yet 45% were experiencing a decrease in their ability to meet those needs. [1]

To meet the challenges head on, follow these 5 trends to doing more with less in 2022: 

1. Shift to a business-focused mindset

Despite increased demand and fewer resources post-COVID, nonprofits must operate with the mind frame of a successful business. To effectively make this shift, the right leadership is essential. In order to achieve a more secure financial standing, a common strategy is recruiting financially successful and well-connected board members. 

Nonprofits must also ensure they are not taking on extra risk with board members who for example, may have pending lawsuits against them. Rather, organizations need to onboard individuals — with a clean track record — who are in sync with their values, mission and business objectives. 

2. Secure the right talent.

Together with the right board members, nonprofits should vet their chief financial officer and chief technology officer. This means selecting a chief financial officer with proper qualifications and not spreading him or her too thin with the responsibility of wearing too many hats. 

Similarly, the chief technology officer must be equipped to protect the organization against threats like a cyber breach. From an insurance standpoint, this is a serious issue, which is frequently not taken seriously enough. Cybercriminals don’t distinguish between regular companies and nonprofits, and simply hiring your nephew, who took a computer course, to manage and protect your IT system is no longer going to cut it.

3. Use Technology to your advantage.

The pandemic accelerated the use of technology — a trend that will only continue. While there are a number of ways to connect with donors, volunteers and beneficiaries of your services, a key approach is reaching people on their phones, via email and where they hang out online. 

Leading CRM software supplier HubSpot reports that text messages have an open rate of 99% as compared to emails, which are opened between 28% and 33% of the time[2].

Is your organization set up to accept donations via phone? What about inviting and enabling volunteers to sign up for events and opportunities in this manner? If not, consider enabling such a system.

4. Manage Reputational Risks.

As much as non-profits attract generous, altruistic individuals, they are unfortunately not immune to unscrupulous people, even within their own ranks. To prevent a catastrophe such as employees or board members stealing from an organization’s funds, there must be oversight and checks in place. 

If something were to happen, the non-profit must be equipped to manage the crisis. This means having a dedicated individual and solid crisis response plan to protect the interests of your non-profit. 

5. Champion Communications.

In the digital age of social media, it is critical that nonprofits are poised to engage donors the same way businesses do. By employing a savvy social media marketer — who is skilled at creating Tik Tok videos, collecting photos for Instagram and crafting engaging posts on Facebook, Twitter and LinkedIn— organizations stand the best chance at reaching their target audience.

Employing the Right Protection will be key 

Even under the best of circumstances, non-profits will inevitably encounter operational challenges and an occasional insurance claim. Consequently, it’s important to have the right insurance agency protecting your best interests. In the absence of in-house legal and insurance-related expertise, nonprofits should partner with insurance professionals who can handle any type of claim that might come about.

IAT Insurance not only offers guidance and customized insurance policies for nonprofits, but we provide clients access to law firms specializing in the non-profit market. Consequently, organizations can easily gather legal advice and take advantage of relevant law-related training opportunities. 

Reach out to IAT Insurance’s Management Liability team for help with reducing your nonprofit's risk.

[[2] FedCommunities “Perspectives from Main Street: The impact of COVID-19 on communities and the entities serving them,” October 12, 2021.

[2] RedEye “SMS marketing vs. email marketing: who wins the battle for effectiveness?” May 4, 2021.