Updated May 5 at 6:05pm

Summit: Vigilance best defense for nonprofits

By Patricia Daddona
PBN Staff Writer

A fully engaged board of directors that stays vigilant even if its nonprofit is never sued is one of several strategies for managing risk outlined Dec. 11 at the PBN Summit on Nonprofit Best Practices. More

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NONPROFIT

Summit: Vigilance best defense for nonprofits

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A fully engaged board of directors that stays vigilant even if its nonprofit is never sued is one of several strategies for managing risk outlined Dec. 11 at the PBN Summit on Nonprofit Best Practices.

More than 160 representatives of nonprofits and companies in the accounting, legal and insurance sectors who work regularly with nonprofits attended the summit at the Crowne Plaza Providence-Warwick. Adler Pollock & Sheehan and Providence Business News sponsored the forum.

“Cognitive dissonance” results, according to panelist Andrew Spacone, legal counsel for Adler Pollock & Sheehan, when nonprofit board members and staff believe that because they “do good” in fulfilling their mission and haven’t been sued, they never will be.

“You’re not immune,” he warned. “Thinking you’re immune leads to passivity in doing something about it.”

Later on, Spacone elaborated, saying strong corporate governance is as important for nonprofits as it is to for-profit institutions.

“The board is the absolute first line of defense,” he said. “If the board is doing its job, this by definition will drive out a lot of risk. But some risk will always remain.”

That’s exactly the type of awareness Ruth Feder said she appreciated hearing after the event. Feder attended in her capacity as president of Cove Homes Inc., a nonprofit based in East Greenwich that works to develop affordable housing. The role of president is roughly equivalent to a chairperson of the board of directors, she said.

While her executive director is top notch, continual review of policies and procedures makes a lot of sense, she said.

“I found very helpful the suggestion and information related to boards of directors and taking a look at risks,” Feder said. “Probably everything is in place, but as a board it’s our responsibility to know what’s there. This just broadens my awareness.”

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