It takes decades to build a strong reputation, and mere minutes to ruin one. Nowhere is that more important than with nonprofits. You have limited resources and no safety net. A single slip-up can spell disaster. Effective risk management is not just a good idea. It is essential.
Simply put, you need risk management for your nonprofit. Insurance is important, but it’s not enough. (For more info, see sidebar.) Most nonprofit leaders diligently and selflessly serve their organizations’ missions. But even the best face numerous challenges: funding pressures, staffing stresses, uncertainties raised by serving needy and risky populations, encroachment from for-profit competitors, and volunteer management issues.
- Energize team members to identify threats and opportunities
- Capture cost savings by simplifying processes and eliminating wasteful practices
- Document procedures so that your institutional knowledge does not depend on the memory of key employees
- Reduce the chance of catastrophic losses, which can reduce insurance costs
- Spot opportunities that grow into new initiatives.