What is risk management? Where can I learn more about it?
According to the Alliance for Nonprofit Management, risk management is defined as follows:
[...] a discipline for dealing with the possibility that some future event will cause harm. It provides strategies, techniques, and an approach to recognizing and confronting any threat faced by an organization in fulfilling its mission.
For nonprofits, risk management may refer to assessing finances or insurance coverage, but it also may refer to screening volunteers, training employees and reducing liability, to name a few.
Developing a risk management plan is key to ensuring that your organization is not caught off guard by unforeseen events or oversights. Risk management may involve any of the following actions:
- purchasing Directors' and Officers' insurance for your board members
- implementing a volunteer screening process
- developing a disaster plan
See also our related Knowledge Base articles:
- What's the difference between contingency and scenario planning? Where can I learn more about these topics?
- Where can I find information on a board's legal duties?
- Where can I learn more about recruiting and managing volunteers for my nonprofit?
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Explore resources curated by our staff for this topic:
Stanford Social Innovation Review
A Call for Nonprofit Risk Management
Nonprofits have a duty to apply risk management principles—a look at when organizations should adopt a risk management program and how they can begin. July 2016. The author, Ted Bilich, also has a series of free downloadable materials, including a step-by-step guide to risk management, at https://riskalts.com/free-nonprofit-risk-management-materials/. (Registration required to download.)
Alliance of Nonprofits for Insurance,Risk Retention Group (ANI)
Nonprofits Insurance Alliance Group provides liability insurance coverages, as well as helpful risk management tools, all tailored for 501(c)(3) nonprofits.
Nonprofits Assistance Fund
Assessment of Recession Risk and Preparedness for Nonprofit Organizations [PDF]
Use this tool for a quick assessment of risk in four essential areas for nonprofit organizations. The rating and guidance provided will help to start discussions, set priorities, and focus attention as nonprofits develop plans to weather the recession. This assessment is a starting point developed to indicate the level of urgency and priority. It cannot take the place of a comprehensive organizational review or in-depth analysis of financial trends and forecasts.
Planned Giving Design Center
Nonprofit Enterprise Risk Management: Best Practices and Case Studies
Non-Profits face many risk management issues. This articles provides a thorough overview of some of the risks and appropriate management responses to those risks. March 2015.
Nonprofit Insurance Coverage: You Need More Than a Directors and Officers Policy
Discusses what kinds of insurance a nonprofit needs and who or what it should cover. Links to a longer article and webinar. March 2014.
Public Entity Risk Institute
The Public Entity Risk Institute (PERI) is a dynamic, forward-thinking organization that serves as a resource to enhance the practice of risk management throughout organizations and communities. Serving public entities, small businesses, and nonprofit organizations, PERI provides relevant and high quality enterprise risk management information, training, data, and data analysis.
Free Management Library
Risk management often focuses on matters of insurance. However, there are several other major considerations when assessing areas of risk in your business. Read the following sections in this overall topic, too.
The Nonprofit Risk Book: Finding and Managing Risk in Nonprofits and NGOs
Find: Amazon | Free eBook