Management Consulting for Nonprofits and Social Enterprises

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Why Risk Management is Like Advertising

The retailer John Wanamaker is generally named as the source of the quote,
“Half the money I spend on advertising is wasted: the problem is I don’t know which half.”

The same is also true of risk management – or at least it appears to be.
Risk management takes time, energy and resources to do effectively.
Risk management has a direct and explicit cost associated with it, as does advertising.

 

Is Risk Management Effective? 

Many of the risk management initiatives and actions however never come into play,
just like most advertising falls on deaf ears or eyes that never see it.

That does not mean that risk management – or advertising – is not effective.

It is.  It is simply that we do not when, or how it will be effective.

Non-profit organizations have many challenges in this era.
COVID has stretched resources and challenged finances.
However, just as a company in a sales slump should not cut their advertising budget,
likewise, non-profits should not ignore their risk management activities.

In fact, during this period of unusual uncertainty,
this is the most critical time to be extra certain to maintain, if not increase, risk management.

While half of your risk management activities may be wasted,
the other non-wasted half more than pays for itself and
ultimately increases the effectiveness of your non-profit organization.

 

Authors: Rick Nason and Omer Livvarcin

 

 

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