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Nonprofit risk management often focuses on operational issues — physical dangers and potential legal exposures. One hotbed of nonprofit risk, however, includes the development function. If your nonprofit does not bring in sufficient revenues, it will not thrive. If it treats donor data negligently, it may lose reputation by experiencing a data breach. As a result, we asked the popular AI program ChatGPT to note common development risks. 

The Nonprofit Risk Management Prompt

We seeded ChatGPT with the following prompt about nonprofit risk management:

Acting as a journalist, describe common risks that nonprofits face relating to development.

ChatGPT’s Answer

As a language model AI, I don’t have personal experiences, but here’s a list of common planning risks that nonprofits face based on my training data:

  1. Dependence on a single funding source: Nonprofits may be overly dependent on a single funding source, such as government grants or large donations from a single individual, which can result in reduced stability and sustainability.
  2. Difficulty in securing funding: Nonprofits may struggle to secure adequate funding from diverse sources, which can limit their ability to achieve their mission and goals.
  3. Inadequate fundraising strategies: Nonprofits may not have well-defined or effective fundraising strategies, which can result in reduced support from donors and limited ability to achieve their mission.
  4. Limited donor engagement: Nonprofits may struggle to engage donors, resulting in reduced support and limited ability to achieve their mission.
  5. Inadequate stewardship of donations: Nonprofits may not have adequate systems in place to steward donations, including recognition, reporting, and impact tracking, which can result in reduced support from donors.
  6. Limited planned giving programs: Nonprofits may not have robust planned giving programs, which can result in reduced support from donors over the long-term.
  7. Difficulty retaining donors: Nonprofits may struggle to retain donors, which can result in reduced support and limited ability to achieve their mission.
  8. Difficulty in demonstrating impact: Nonprofits may struggle to demonstrate the impact of their work, which can result in reduced support from donors and limited ability to achieve their mission.

    Notes and Questions Based on This Answer

    How many of these development issues affect your nonprofit?  

    What other development risks should be on your radar? In my book, Managing Your Nonprofit for Resilience, I provide 30 other questions to ask about development.

    If you are thinking about how to incorporate AI into your risk management planning to help address some of these risks, reach out to me here at Risk Alternatives for suggestions, including resources for getting better results when using AI. Alternatively, you can create a ChatGPT account for yourself to begin exploring how AI could impact your organization.

    (As previously noted, all of the art for this series on common nonprofit risks was generated by Midjourney, another AI program. I asked that program to generate images about compliance risks in the style of Vincent Van Gogh.)