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18 Apr

Why Assessments Matter

Why Assessments Matter

Assessments are common for outside resources to understand what is needed within an organization. At times, assessments can take months. What I am suggesting is taking a few hours to understand the current situation and analyze future needs or missed needs. Why do assessments matter? They matter because most nonprofit leaders are consumed with a variety of responsibilities and may not have the capacity to notice a trend or need. Outside resources have the capacity and experience necessary to assess your organization more clearly and urgently. Here are some assessment areas I would recommend. 



According to best practices and IRS requirements, organizations should assess governance including conflict of interest annually. This includes the review of by-laws, articles of incorporation, insurance, employee manual, volunteer manual, board manual, and all annual training required or suggested by the IRS. This assessment may not take long but is a necessary part of a nonprofit organization running at peak efficiency. 



While technology changes fast, it is a best practice to review technology equipment, policies, and procedures annually. Some nonprofit leaders see technology as expensive or a cost they cannot afford. Technology can save money and increase the efficiency and donor retention for most organizations. Such an expense will more than pay for itself. The assessment should include service agreements and service expirations. The document retention policy that is required by law for all corporations often needs assessment and review to ensure information and privacy is protected and that all laws are followed exactly. Assessments can also include back up policies or emergency procedures to protect your data and systems. Lastly, it is a best practice to carry technology insurance which is very affordable and can protect your organization and reduce costs of equipment replacement and data breaches. 


Risk Assessment

Every corporation has risk. It is common for human resources, operations, or board directors to help organizations reduce or eliminate risk. This can be accomplished with policies, procedures, or legal protections. We recommend the following list when conducting a risk assessment: 

  1. Does your agency anticipate significant changes in primary funding streams in the next 18 months? 
  1. Does your agency anticipate significant changes in the types of clients they currently serve?
  1. Does it appear your agency’s inventory and accountability system for office equipment, computers and other “high value” items is sufficient to protect against loss, theft, or inappropriate use?
  1. Does your agency’s physical plant provide reasonable security for clients and staff members? 
  1. Does your agency’s health and safety program appear effective in identifying possible risks and hazards? 
  1. Does your agency have an adequate oversight system in place to minimize the risk of billing and account coding errors?
  2. Does your agency’s (corporate compliance program) appear to be effective in preventing fraud, waste and abuse of funds from public sector sources? 
  3. Does it appear your agency will face increased competition in the next 18 months? 
  4. Does it appear your agency has sufficient insurance coverage to protect the organization’s assets in the event of an emergency situation?

Describe your agency’ most significant challenge in the next 18 months and include an assessment of how that challenge will impact the organization.

Assessment’s matter because they update and protect the organization from risk or becoming irrelevant. Assessment’s can be conducted by competent consultants or outside resources within hours, not months. The good news I can share is that our firm does not charge for assessments. How do you find time to conduct assessments? The answer is the same why you find time to interact with donors and fill out your 990. When a responsibility is crucial to the organizations success and survival, you find a way and consultants can help. 

Brad Lebowsky, CEO

Nonprofit Engagement Advisors, LLC

Connecting people, communities, and resources to grow exempt organizations.

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