Scandals involving financial improprieties at such firms as WorldCom, Enron and Arthur Andersen have drawn attention to the corporate governance of for-profit and nonprofit organizations alike. Consider also that the number of nonprofit entities has increased dramatically during the last decade and that some control millions of dollars in assets, and it's easy to understand why legislators, regulators and insurers are focusing intently on the financial management of charitable organizations. To help brokers and underwriters better understand and respond to the increased scrutiny on their not-for-profit insureds, the Professional Liability Underwriting Society, at its International Conference last November, hosted a panel discussion entitled "The Not-for-Profit Life–Life Is Not So Simple for Not-for-Profits These Days."

Karen A. Callanan, a senior vice president of NIF Professional Liability Risk Solutions, served as moderator. Rounding out the panel were Stuart Ross, senior partner with the law firm Ross, Dixon & Bell LLP; William Causey, assistant general counsel for the American Red Cross and adjunct professor at Georgetown University Law School; John R. Graham, senior vice president and director of Aon Financial Services Group; and Thomas M. Sicard, senior vice president and product manager for AXIS Financial Insurance Solutions. Following are edited excerpts of their comments.

Karen: If you conducted an informal poll to gauge the general public's perception of not-for-profit entities, you'd likely hear them described as small groups of good-hearted people volunteering their time, money and talents to help less-fortunate members of our society. To a degree, that's fairly accurate. However, the nonprofit sector is much more than a handful of do-gooders. It's a diverse group of organizations varying widely in size and purpose. It's a large segment of the U.S. economy, it's growing rapidly and it's changing.