Managing Risk – Excerpt from Nonprofit Risk Management Center E-News

The following excerpt is provided, by permission, from Melanie Herman, Executive Director of the Nonprofit Risk Management Center, Leesburg, VA:

In Jeffrey Rosenthal’s fascinating book “Struck by Lightning: the Curious World of Probabilities, Rosenthal explores the science of probabilities. He compells his readers to remember that risk management is accompanied by “randomness”. Many aspects of our lives are governed by events not completely within our control and uncertainty is here to stay. Nonprofit leaders have two options regarding uncertainty: #1 – Let uncertainty get the better of us and our tax-exempt organizations or #2 – Learn to understand and perhaps appreciation randomness and act accordingly.

According to Rosenthal, “by thinking logically about the likelihood of various outcomes, we can better make decisions and understand our lives more deeply.”  So what does thinking logically have to do with governance and managing risk? Read the rest of this entry »