Hallmarks of a Risk-Aware Nonprofit

Hallmark #2: Heralds A Risk Management Champion

The nature of risk in a nonprofit environment is that many sets of eyes are needed to identify risks, and many hands are needed on deck to address them. Most nonprofits are unable to afford to hire a risk management professional to lead the organization’s efforts. Luckily, hiring outside help is not essential. Instead, what is essential is the presence of a person in a leadership position who both believes in the importance of sound risk management and is effective in motivating others.

A nonprofit that heralds a risk management champion is well ahead of its peers because the champion carries the standard so that others are motivated to identify risks and come up with creative solutions to address those risks. A nonprofit’s risk management champion could hold virtually any leadership position as long as the champion is involved in the organization on a day-to-day basis. The champion’s role is not tied to the position; rather, the champion can be whoever has the commitment and passion to advocate on behalf of sound risk management practices throughout the organization. Some nonprofits may actually give the risk management champion a title that reflects that role, but the official title of the champion is of little consequence because the champion is not responsible for executing the risk-management plan. Instead, the champion raises awareness about risk and motivates people throughout the organization to take interest and action, helping them to appreciate the importance of risk management.

A nonprofit that heralds a risk management champion knows that sounding the horn and riding out in front is more effective than pushing paper down the hall.

The Process

To manifest this Hallmark your nonprofit will:

  1. Identify an existing risk management champion, and publicly acknowledge him/her as the champion.
  2. If your nonprofit does not already have one, cultivate a risk management champion in your nonprofit.
  3. Reward your risk management champion.
  4. Make everyone aware of the champion’s role.
  5. Allow the champion opportunities to develop his or her risk management knowledge.