Nonprofit Risk Management
Steps of Nonprofit Risk Management
- Identification of problems: This refers to identification of areas of operation where problems might crop up due to unforeseen events. It is this uncertain event, which we refer to as risk. Normally risks adversely affect the functioning of an organization. So risk management essentially provides the organization with a back up plan.
- Formulation of plans: This deals with the preparation of an action plan .It is done with a view to mitigate the difficulties arising out of risk situations.
- Determination of compensation package in case of an eventuality: Here we try to determine what the ideal compensation package will be, in case of an eventuality.
Risk Management Issues Concerning Nonprofit Organizations
- Screening of the organization's volunteers
- Keeping a tab on the records of driving licenses of both staff and volunteer drivers
- Developing training and orientation modules for volunteers
- Developing guidelines for employees
- Financial negotiations at the time of taking a bank loan
- Purchase of property
- Taking insurance of liabilities
Reasons for Adoption of Nonprofit Risk Management
For non-profit organizations risk management is essentially a preventive measure. It is put in place to avoid any unnecessary future hassle arising out of risk factors. Nonprofit risk management provides the organization with an action plan. Nonprofit risk management formulates various strategies and prescribes various techniques to be followed by the organization. It is wise to plan in advance for possible future disruptions and create a back up policy for the same. This helps in the smooth running of the organization. Attainment of long term set goals also becomes easy.