“How can we empower team members across our organization to take appropriate risks that advance our mission and strategic goals?” This is the question that nonprofit leaders and board members ask when it’s time to develop and apply risk appetite.
Why Risk Appetite?
Setting your nonprofit’s risk appetite will guide an organization-wide approach to risk-taking that aligns with your strategic goals and aims to advance your nonprofit’s mission. Ultimately, staff leadership and the board must develop a shared vision for appropriate risk-taking, and communicate that vision to staff members. Staff across the organization can then interpret and apply the organization’s formalized risk appetite whenever they make decisions or vet opportunities to take risk.
When nonprofit leaders fail to address risk appetite, team members are more likely to engage in misaligned risk-taking and risk management activities, which can threaten progress toward strategic objectives.
Living by your organization’s risk appetite is a form of high-level mission stewardship, with goals including:
- Aligning risk-taking and risk management with the nonprofit’s mission and strategic priorities
- Distributing accountability for risk-aware decision-making, while offering decision-making guidance to staff across the organization
- Empowering staff to take more risk–particularly higher-risk, mission-advancing ventures–by teaching them to interpret and apply leadership’s vision for risk appetite when making day-to-day decisions
Engage NRMC for a Risk Appetite Workshop & Coaching
The NRMC team can facilitate the development of a formal risk appetite for your organization, through a highly interactive workshop for staff leaders and board members. You’ll explore questions like: “are we taking the appropriate level and type of risk across the organization, in order to advance our objectives?” This holistic risk mindset invites a compelling, birds-eye view of strategic risks and opportunities, compared to the age-old risk management question: “is a particular risk being managed as desired?”
Our risk appetite workshop (~half-day session) includes:
- an educational presentation that informs your team about the concept of risk appetite
- a hands-on activity in which your team will learn to develop a risk appetite position, by considering thought-provoking and controversial opportunities to advance the mission of a hypothetical nonprofit or NGO
- a facilitated discussion to develop a real, formalized risk appetite statement for your organization
- an activity that refines the working risk appetite statement by exploring the way your own team members will be asked to interpret and apply risk appetite when they make decisions
Following the risk appetite workshop, the NRMC team will provide coaching to you as you communicate your risk appetite to staff organization-wide. Coaching includes:
- Guidance to formalize and roll-out the adopted risk appetite statement
- Delivery of train-the-trainer materials, which your staff leaders can use to teach staff teams about risk appetite
- Suggested exercises for monitoring the appropriate application of the adopted risk appetite as team members make decisions over time
- Guidance for refreshing your approach to risk appetite in the years to come