There are many ways to go after your non-profit goals, but as a non-profit, you face many challenges. There’s always some amount of stake associated with everything you do. Identifying where you’re weak and which bases you’ve neglected to cover might be challenging. That’s where we can help. Non-profit organizations and for-profit enterprises place a high value on risk management.
What do we mean by “risk management”?
Risk management identifies, assesses, and controls risks arising from operational activities and business processes. It includes actions to minimize the risks’ adverse effects and maximize the positive outcomes.
Risk management is essential because it helps you:
– Make decisions with confidence
– Focus on your organization’s mission
– Allocate resources efficiently
– Comply with laws and regulations
– Protect your people, property, and reputation
So how do you go about implementing risk management in your non-profit? Here are a few key steps:
1) Assess your risks: The first step is to identify which areas of your operation pose the most significant risks. Next, you’ll need to gather data from various sources, including your staff, clients, and vendors.
2) Create a risk management plan: Once you’ve identified the most significant risk areas, you can develop a plan to address them. A risk-management plan should incorporate short- and long-term mitigation measures.
3) Implement risk management controls: Once you have a plan, it’s time to implement it. This will involve implementing various controls to mitigate risks. Some standard risk management controls include insurance, security measures, training programs, and policies and procedures.
4) Monitor and adjust: Risk management is an ongoing process. As such, you monitor your risks regularly, and changing your plan as needed is essential.
By following these steps, you can develop a robust risk management program for your non-profit. Doing so will help you make better decisions, protect your people and property, and focus on your mission.
Why is it necessary?
Non-profits and for-profit firms encounter many of the same risks, but there are important distinctions between the two. While for-profits do not have to protect donors’ time and money, non-profits do. The obligation to safeguard contributors’ contributions of time and money is complicated to manage in a tight financial climate. Numerous factors may lead to concerns for a non-profit. I’ll go through a few examples.
Fundraising scams: It’s conceivable that people could utilize your brand and logo to establish a fraudulent event or cause, keeping the money for themselves. This harms not only you but also your contributors. Their money would be lost; they expected to give it to a reputable organization. Losing your donors’ trust might lead to financial responsibility and liability for the losses of your contributors.
Theft: Both non-profits and for-profits are afraid of being stolen from. It could be by anyone―clients, vendors, or employees. For any organization, large or small, losing any amount of money is a big deal, and it can significantly impact their ability to function daily.
Meeting and exceeding government standards: Non-profits risk losing their tax-exempt status if they don’t follow the regulations set by the IRS. To keep their exemption, non-profits have to show that funds are being used for a charitable cause and not for personal, financial, or political gain. Risk management can help organizations avoid any potential problems.
Data protection: Non-profits need to prioritize cybersecurity. According to the November 2018 “State of Nonprofit Cybersecurity” study, more than half of non-profits surveyed (55 percent) have established policies to guide their cybersecurity strategy. However, nearly 39 percent don’t have any policy, and 6 percent said they didn’t know if they did or not. Data breaches are a genuine concern for businesses today, and having some form of protection is essential to keep your donor data safe. Your organization must have minimal security to protect its donor data from online dangers.
Risk management is also essential since it aids organizations in understanding the threats and possibilities they face and prioritizing issues. Organizations can then use their resources and information to create a strategy. It’s also helpful in determining where your organization is positioned in terms of performance and long-term viability.
The rising demand for cybersecurity
You don’t want to think of cybercrime as a “what if” possibility because you may believe you don’t need to prepare for it since it’s such an unlikely event. However, trust us when we say that the danger is genuine. Therefore, it’s past time to get serious about cybersecurity. If any one of these activities are done by your company, now is the moment to begin putting together safeguards:
Perhaps you run a non-profit and want to process donations, or maybe you need to handle event registrations.
It’s critical to shift personal identifiable information from its current location into a secure document that can’t be readily accessed. “Personally identifiable information” may refer to employee files or personally sensitive data about your contributors.
Collecting data on the behaviors of contributors, patrons, subscription recipients, and volunteers.
Many non-profits keep information that is safeguarded by law confidential. However, if this data is stolen, it affects the people whose information was taken and the non-profit itself since it may be held responsible for the breach.
Where to start:
Begin by conducting a risk assessment. Keep track of all the information your non-profit organization collects and ensure that you know where it’s being stored. Next, you and your team must understand the context in which you’re operating by gathering current strategic plans and mission statements. This will allow for a productive and cohesive work environment by ensuring everyone is aware of the organization’s current standing and goals. The previous section’s emphasis on establishing the new organization’s goals and timeline will make it simpler to set objectives and plan how you want your company to end up. Developing an effective risk management strategy isn’t something that can be completed in one meeting. It takes time to create something that works well for you.
In summary, here’s what you need to do: first, identify the risks; then, prioritize the issues; and finally, respond to the problems. After that, you can assess your approach and make improvements as needed.
Whether you’re a startup organization or a leading corporation, CommunityForce provides fully customizable, all-in-one online grant management solutions to maximize your efficiency, simplify complex processes, and improve collaboration so you can focus on increasing your impact. We’ve helped organizations streamline their entire process no matter the size and scope of their giving.