The reverberations of an incident may damage irreparably a nonprofit's chances of survival, including its ability to recruit volunteers, maintain public credibility, and reach prospective clients. Overall, nonprofits have a far more difficult time in the wake of revelations concerning client and staff injury or financial mismanagement. Sometimes, it may take an agency several years to rebuild. In other instances, the loss of public support may signal the end of the organization. Simply speaking, a risk is any uncertainty about a future event that threatens your organization's ability to accomplish its mission.
Nonprofit assets fall into the following categories.
Developing a risk management program Large organizations may have a risk management department responsible for answering the three basic questions. In addition, the department may manage litigation, coordinate product and plant safety programs, and undertake the complex analyses required to set monetary reserves for future claims. In many nonprofit organizations, a volunteer Risk Management Committee working in partnership with the executive director and finance officer oversees the risk management function. For small to mid-size nonprofits, risk management need not be an expensive or highly technical process requiring vast resources. Instead, incorporating risk management into your operation is simply anticipating events, planning a response, and, wherever possible, providing adequate financing if something does go wrong.