As the guardians of charitable organizations the board members of nonprofit organizations must take steps to evaluate and minimize risk. A risk assessment can help you to evaluate and rank the risks your organization faces and their probability of occurrence and their impact on the operations. You can create risk logs or scenario planning to prioritize your risks, and then make an informed decision on how to reduce, prevent, or eliminate them.

Nonprofits have unique challenges in assessing and managing risk. Nonprofits have unique challenges when it is about assessing and managing risks. For-profit https://boardroomideas.info/how-to-reap-tangible-business-benefits-from-esg-strategy-development/ companies have similar concerns regarding employee training and liability reduction, however nonprofits also need to protect the money and time of donors. This means that the risks of data breaches, financial problems, and political instability are as real for nonprofits as they are for businesses that are for profit.

This article outlines a 3-step process that will assist your nonprofit in transitioning from reactive to proactive, protecting your mission over the long term. Regardless of your nonprofit's size or expertise, the essential steps are the same.

Start by identifying all of the potential risks your organization is confronting. This includes everything from a shrinking reserve ratio to the way your staff handles passwords. At this point make sure that no department go unnoticed: accounting and finance, IT, donor relations, engineering human resources, public relationships. Consider what a negative situation would look like in each of these areas, including the cost, schedules, project and long-term campaigns. Next, determine the likelihood of each potential risk and how much damage could be caused if it occurs.