Risk Management

Every nonprofit must try to maximize the good it does while also understanding and managing its risks. Balancing these can be a challenge because of the passion that nonprofit leaders – both board and staff – feel for the organization and its mission.

Risk management is not easy but a few things can help a lot: creating a risk tolerance statement, scenario planning, benchmarking and self-rating, setting explicit financial stability targets, creating continuity plans (i.e. living wills) etc. Nonprofits must ensure that well thought through risk management processes are in place. Trustees must recognize that risk management is inherent in their duties of care, obedience, and loyalty. Nonprofits serious about risk management may find the following resources helpful.

New York City Contract Delays: The Facts Volume 2

Closing the Gap: A True Cost Analysis of Early Childhood Education in New York City

The Financial Health of Nonprofits in Hawaii

New York City Contract Delays: The Facts

The Financial Risks of US Nonprofits and How to Manage Them

The Financial Health of the United States Nonprofit Sector

A National Imperative: Joining Forces to Strengthen Human Services in America

The Financial Health of Philadelphia-Area Nonprofits 

Risk Management For Nonprofits (SeaChange’s thinking on this topic)

Understanding Overhead: A Governance Challenge for Nonprofit Trustees (An addendum to the SeaChange’s risk report)

New York Nonprofits in the Aftermath of FEGS: A Call to Action (Self-reflection on the part of NYC Human Services Sector)

Charity governance, finance and resilience: 15 questions trustees should ask

Audit Committees and Audit Quality

Ahead of the Curve Report

Open Road Alliance (a funder that wants to put risk on the agenda)

Open Road Tool Kit

OMB Circular A-122: Cost Principles for Non-Profit Organizations

Res-Care Form 10-K (Food for thought from the for-profit sector, particularly pages 10-44)

Assessing Financial Vulnerability in Nonprofits (Very wonky but great data)

The Mission-Infused Nonprofit CFO: Aligning Mission and Finance for Success

Risk Alternatives

Nonprofit Risk Management Center

SSIR Call for Better Nonprofit Risk Management

Loss Leaders: Growth and Financial Health

Nonprofit Quarterly – Foundation Support for Nonprofit Balance Sheets