Hallmarks of a Risk-Aware Nonprofit

Hallmark #4: Is Bold But Smart

The Challenge

Mission fulfillment in the nonprofit world requires bold as well as smart risk-taking. Organizations that take bold steps can make great strides to serve people and communities. Yet no organization wants to be caught unprepared for events that could jeopardize mission fulfillment. Every nonprofit should identify the smart steps necessary to provide a measure of protection, security and assurance to accompany bold risk-taking.

Both board and staff need to be bold and smart. Board members will not feel smart about taking risks unless they are knowledgeable about risk management in general as well as specific risks that their decisions may engender. When a nonprofit is bold but smart, board members receive regular opportunities to learn about risks and protections against risk—so they feel better about being bold!

Nonprofits that are bold but smart about taking risks ensure that the resources available to the organization—people, property, income and goodwill—are dedicated to accomplishing the organization’s mission and placed at risk only because of a bold plan to further the organization’s mission.

The Process

To demonstrate that your nonprofit is bold but smart, your nonprofit will:

  1. Engage the board regularly in discussions about risks that the nonprofit faces and risks the nonprofit is taking currently.
  2. Identify and address the risks associated with any new activity at the earliest planning stages of the activity.
  3. Make certain that the nonprofit’s risk management champion or a member of the risk management committee is involved at the planning stages of any new venture or program the nonprofit is considering.
  4. Provide opportunities for staff and board to learn about risk management in ways that are directly applicable to their roles within the organization.
  5. Revisit the risks associated with ongoing programs and activities when some aspect of the program or activity is changing (e.g., expansion or contraction of services, client base etc.)
  6. Encourage input from key stakeholder groups about perceived and actual risks.
  7. Anticipate community concerns and proactively seek to understand and address community perceptions.
  8. Recognize the need to modify a course of action when risk becomes unacceptable.
  9. Invest in the organization’s brand identity and build good will around that identity.
  10. Adopt risk management strategies that are specifically intended to protect good will.
  11. Engage the risk management champion or an existing risk management committee during the early planning stages of program expansion or contraction.