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
- assessing the financial risks of your organization
- 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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