As guardians of charities the board members of nonprofit organizations must take steps to assess and minimize the risk. A risk assessment can help you assess and rank the risks that are associated with your organization, based on how likely they are to occur and the implications for operations. You can create an inventory of risks or scenario planning to prioritize your risks, and make an informed decision on how to avoid, mitigate or eliminate them.
Non-profit organizations face unique challenges when it comes to assessing and managing risk. While for-profit businesses have similar concerns, like employee training and the reduction of liability, nonprofits must be mindful of protecting the contributions of donors in both money and time. This means that the risks of data breaches, financial problems, and political instability are as real for nonprofits as they are for for-profit businesses.
This article offers a 3-step method to help you transition from reactive to pro-active, protecting your mission in the long run. The basic steps are the identical regardless of the size or expertise of your nonprofit.
Start by identifying the risks that your organization is exposed to. This includes everything from a declining reserve ratio to how your staff handles passwords. During this stage make sure that no department be left unaffected by your scrutiny: accounting and finance IT, engineering, donor https://boardroomideas.info/how-to-reap-tangible-business-benefits-from-esg-strategy-development/ relations, human resources, and public relations. Consider what a negative situation might look like for each of these areas, including costs, schedules, projects, and long-term campaigns. Then, consider the probability of each danger and how much damage can be caused if it occurs.