Hallmarks of a Risk-Aware Nonprofit

Hallmark #4: Is Bold But Smart

Tools

  • Click here for a sample charter for a risk management committee or task force that includes the responsibility for evaluating proposed new programs and activities.
  • Add two simple questions to any planning meeting for a proposed new activity or program: (1) “What downside risks will arise from this activity? (2) What strategies will we put in place to reduce the likelihood that these downside risks will materialize or mitigate any losses that result?
  • Add the following to the agendas of board committee and staff meetings: “New/ Emerging Programs or Activities: What goals? What upside risks? What downside risks? What strategies to increase the chance that upside risks will occur? What strategies to mitigate downside risks?”
  • Add the following to the agenda for a staff meeting: Brief the management team on the concept that often risks take organizations by surprise when they stem from changes in how programs or services are delivered. Explain the importance of revisiting the risks associated with an activity and the organization’s responses to those risks—especially when the activity or program has changed.
  • Provide the board with basic risk management information specifically related to their role as board members. Click here for information on the affordable booklet, Pillars of Accountability.
  • Use a free internet survey tool, such as www.surveyemonkey.com to gather input from key stakeholder groups about perceived and actual risks connected with existing and/or planned activities.
    • The results should yield better data to assist with a determination of whether the expansion or changes to a program will actually increase, or modify the risk profile of that program/activity, or whether the sense that certain risks will increase in only unfounded public perception.
    • As an added bonus, gathering information from a wide variety of stakeholders, the questionnaire may yield information about actual risks that had not previously been brought to the nonprofit’s attention.
    • Sample questions could include:
      • “Please indicate which of the following risks you think could occur in connections with ABC Nonprofit’s programs (check all that apply):” [include some risks the organization has identified already and be sure to include an “other” option that can be explained with a narrative response.]
      • “Are you aware that any of the risks listed above have ever actually occurred at ABC Nonprofit” (yes) (no) If yes, please check all that apply.” [include same choices from above.]
      • “ABC Nonprofit is considering expanding its programs to include [describe]. Do you think that doing so will increase the downside risk that any of the following will occur? (yes) (no). If you answered ‘yes’, please check any risks are likely to occur, in your opinion, should ABC Nonprofit expand its services as described. [include same choices as above].
  • Is your board bold enough to suspend operations? Sometimes that is the most prudent step to take. If your board is wondering, “should we shut our doors?” share this article published by Blue Avocado: “Thinking about the Unthinkable: Maybe We Should Shut Down”
  • Click here for a Checklist that can be used to assess risks that arise when a program or activity is expanding or changing.