No doubt Monday’s news that Greenpeace suffered a $5.2 million loss on an ill-timed bet in the currency market will unleash a tsunami of tsk-tsking and tut-tutting in our sector.

The Associated Press reported that an employee in the finance department at Greenpeace International headquarters in Amsterdam bet the euro would not strengthen against other currencies in 2013. In fact the euro did strengthen and the loss of $5.2 million occurred.

Greenpeace International fired the employee, whom it did not identify, but said there was no evidence of fraud.

“Every indication is, this was done with the best of intentions but not the best of judgment,” said spokesperson Mike Townsley.

For 40+ years I’ve watched and admired the financial and fundraising sophistication of Greenpeace. Raising and managing $400 million annually — not to mention protecting it from the clutches of governments and courts when action campaigns grow heated — through a network of operations in 40 countries is no mean feat.

So, my first reaction on hearing about the loss was, ‘Thank heavens Greenpeace is still on top of its game.”

Greenpeace, unlike most nonprofits, possesses a genetic code strong on ‘innovation’ and ‘risk’ — and huge on ‘reward’. From its pioneering in-your-face campaigning style of the ‘70s to its equally pioneering fundraising (face-to-face and other monthly giving breakthroughs) over the past decade, the organization thrives on taking thoughtful risks.

Sure, no one likes to see $5.2 million go up in smoke, least of all Greenpeace, as their spokesperson readily acknowledged as he expressed concern about the reaction of donors.

Well, from this donor’s viewpoint I continue to applaud this remarkable organization because:

• Greenpeace continues to innovate by investing my contributions not only to advance their environmental mission, but to make my gifts grow and do even more;

• When they make a mistake or suffer a loss, as they clearly did with the currency trade, they’re up front and open about it. No evasion or beating around the bush.

Here’s how the Greenpeace spokesperson explained it. Responsibility lies partly with the employee and partly with the organization. The employee was a financial expert whose job included currency trades to protect the organization from fluctuations in the market. He was not qualified, however, to undertake trades on the scale he did. In addition, he ignored company rules, under which he should have checked with supervisors and probably hired an external expert for advice on how to manage risks. “Hindsight is 20/20, but we believe if he had followed rules and procedures this wouldn’t have happened.”

• Best of all Greenpeace sent a clear message to its staff that innovation and proper risk-taking is important in the organization’s culture.

The employee who made the loss was fired for ignoring rules, not for the loss itself.

Mindful that while $5.2 million is a large sum, in the case of Greenpeace it amounts to slightly over 1% of the group’s $406 million annual revenue. I’ve seen groups waste at least that percentage on meaningless direct mail tests, unfocused focus groups, and new media that glows in the dark.

Do you work in an organization that encourages innovation and risk-taking? How are those risks managed?

Finally, as a donor I haven’t yet received any word from Greenpeace to see how they’ve explained the mistake. If you were Greenpeace, how would you explain it to your donors?

Roger

P.S. Thanks for the heads up on AP story to Ken Smith, my former partner in Craver, Mathews, Smith, who spent much of the ‘80s and ‘90s building Greenpeace membership in the U.S. and Canada.