Churches and nonprofits must tackle risks with limited revenue: Church Mutual

By Alex Zank, Advisen

A limited revenue stream comprised mainly of donations and grants can exacerbate risks for mission-driven organizations such as churches and nonprofits, according to specialty insurer Church Mutual.

“Certainly, revenue has always been a challenge in those marketplaces. COVID-19, the economy, and a potential recession only makes those issues more challenging,” Alan Ogilvie, president of Church Mutual, told Advisen in a recent interview.

Revenue streams of many mission-driven groups dried up amid the COVID-19 pandemic, when charitable giving waned. However, Church Mutual found in a recent survey that more than half of Americans expect to maintain their charitable donations in 2023.

The survey results were “encouraging news for purpose-driven organizations nationwide since a decrease in donations can put many organizations at risk,” Nicole Jolley, Church Mutual’s assistant vice president for nonprofit and human services, said in a statement.

Church Mutual’s client base includes religious institutions, nonprofits, schools, senior-living facilities, and camps. While these organizations face similar property, cyber, and liability risks as many other industry sectors, their specialized circumstances can introduce complexities to the risk management process.

For example, cash-strapped organizations may not be able address common risks such as building maintenance or have the resources of major corporations to draft cyber resiliency plans or adopt recommended cybersecurity tools, Ogilvie said.

“Our job is to help these organizations understand the nature of exposure, that they do have exposure, and what can be done reasonably to try to provide a reasonable defense for them,” he told Advisen.

As owners and occupiers of real estate, churches, schools, and nonprofit organizations contend with the impacts of a warming global climate. Summer camps located in remote parts of California face significant risk of wildfire damage. Churches must also monitor their facilities, especially when they’re left unoccupied for long periods, opening the door to heightened risk for pipe freezes, vandalism, or general disrepair.

Labor shortages have also led to increased risk for senior-living facilities, which have been particularly challenged with finding workers in recent years.

“There’s going to be a higher propensity for errors if there isn’t an adequate level of staffing,” Ogilvie said. “Senior-living facilities are unbelievably critical, and they are a 24/7 facility. So, you’re asking people to work unusual hours, which again makes recruitment challenging.”

Church Mutual itself has faced a tough labor market and has looked at ways to better attract and retain talented professionals. Part of its talent strategy has been to open offices in urban areas, such as its newest location in Milwaukee. It also has a good message to prospective employees who seek meaningful work.

“When you come to work every day, you know you’re helping groups of people who are really bettering their communities. You see it every day,” said Ogilvie. “I think that’s a little bit different for us, that we get to help them understand what our purpose is. That’s been very successful for us.”

Reporter Alex Zank can be reached at alex.zank@zywave.com