Risk management: It’s a phrase that maybe you have heard of but may not be sure of what exactly it means. And if you work for a non-profit, you might be wondering if it even applies.
Generally speaking, risk management (in the financial world) means trying to find potential risks before the happen, learning about them and trying to prevent or limit the fallout from them.
So how does a non-profit handle risk management? It can begin with an assessment. The goal here isn’t to eliminate all risks: It is to be prepared so you can manage them as they will inevitably pop up.
Here are a few things you can do, to create an assessment of risks. Read on:
Identify and analyze
Finding out what risks your non-profit could face is really the first step in a risk management assessment for any nonprofit. Look at the laws, ethics and other rules that govern your organization and especially your financials. How can they be made stronger? How are they currently weak? Once you do that, analyze how vulnerable your nonprofit is in each category or area of risk. This will give you a way to prioritize how you fix or mitigate the potential risks.
Once you come up with potential risks, and prioritize them, you can figure out how where to start planning for those risks should they occur. You’ll want to assign people or teams to the risks that pertain to them and give them ownership over managing it, setting up controls or processes to periodically check in on progress.
You can also hire an outside firm to manage things like your financials, giving you even more assurance and confidence. Technology is also on your side, with accounting software that can make a real difference.
Unfortunately, risk management for nonprofits isn’t a “one and done” situation. It needs to become part of your organization’s culture. Risks are always changing, so you will need to be nimble and willing to adapt so you don’t get caught unaware.
If your nonprofit needs help with a risk management assessment – or the results of one — we can help. We offer tech-based solutions for nonprofits. Contact us today!