As the guardians of charitable organizations, nonprofit board members should be proactive in evaluating and minimize the risk. A risk assessment helps you identify and rank the risk of your organization, based on how likely they are to occur and the impact on operations. You can create risk logs or scenario planning to rank your risks and make informed decisions on the best way to prevent, reduce 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 safeguarding donors’ contributions of both money and time. This means that the risks of data breaches, budget shortages, as well as political turmoil are as real for nonprofits as they are for businesses that are for profit.
This article offers a three-step process that will help your organization move from reactive to proactive, safeguarding your mission over the long-term. The basic steps are the exact same regardless of the size or experience of your nonprofit.
Begin by identifying the virtual data room technology risk that your nonprofit faces. This includes everything from a shrinking reserve ratio to the way your staff handles passwords. At this point, don’t let any department go unnoticed: accounting and finance IT, engineering, donor relations human resources, public relations. Consider how a negative incident could affect each of these areas. This includes scheduling, costs, and projects, as well as long-term campaigns. Then, consider the probability of each potential risk and the amount of damage that could be caused if this happens.