A risk is defined as any uncertainty about a future event that threatens your non profit’s ability to accomplish its mission. Non profit risk management is a method for handling the possibility of future harm. It provides strategies, techniques, and an approach to recognizing and confronting any threat faced by an organization in fulfilling its mission. Non profit risk management considers:
- What can go wrong?
- What will we do both to prevent it, or how will we deal with the aftermath?
- How will we pay for the outcome of an incident?
For non profits, risk management considers issues such as:
- Screening volunteers
- Checking motor vehicle records of all staff and volunteer drivers
- Developing orientation, employment practices, and training materials
- Negotiating bank credit, and purchasing property and liability insurance
Creating a non profit risk management program
For non profits, practicing risk management is living the commitment to prevent harm. Additionally, non profit risk management addresses insurable risks such as the loss of tax-exempt status, public good will, and continuing donor support. When creating a non profit risk management program you should first consider the purpose of the program (i.e. reduce insurance costs, reduce staff injuries, etc.). This purpose will give you a basis on which to evaluate results and determine the program's effectiveness. You should also assign responsibility for developing and administering the non profit risk management plan. This may be an individual or a group.
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