Nonprofit Insurance Program

Risk Management Tools: The Proper Use

By Alexa Connelly
October 28, 2016

Nonprofit organizations offer unique services to the communities they serve based on their mission, vision, and overall goals. In addition, they face different types of risks based on their services. Nonprofit directors spend a significant amount of time leading, planning, and marketing their organization daily. Their busy schedule pulls them in many different directions & often time leaving them with no time to review and update their risk management tools.

The Importance

Risk management is easy to move to the back burner  who really wants to talk about the bad things that might happen? Risk management tools are vital to the continued success of your Nonprofit. Tools, policies, and procedures help you minimize potential risks and establish a reaction plan in the event something goes wrong.


Follow these six steps to effective implementation and use of risk management tools in your nonprofit.

  1. Create a committee. Most Nonprofit director’s schedules are jam packed with plenty of responsibilities already. Don’t stress yourself by adding another project as a priority. Pick a group of volunteers to make up a risk management committee. Assign them risk management tasks and have them provide a monthly report for your review and feedback.
  2. Identify a need. Have the committee review your services, procedures, and daily operations to identify potential risks.
  3. Review & update. Match your existing risk management tools to your list to identify a need for new or updated tools. Ask the committee members to review new tools, educate themselves on the proper use, and provide you with a description of its purpose.
  4. Train your team. Schedule a training session with your volunteers to educate them on the purpose, use, and benefits of the new or updated risk management tool. Limit the training to cover one specific tool. Trainings can be conducted in person or via video recordings.
  5. Test their knowledge. Test volunteers understanding afterward with a quiz or set up a scenario for them to put the tool in action.
  6. Review effectiveness. Your risk management committee is also responsible for reviewing and measuring risk management tool effectiveness. Review new tools 90 days after implementation to identify any needed improvements. Review all risk management tools on a yearly basis to maintain safety in your nonprofit organization.

Nonprofit organizations are valuable to the communities they serve. Don’t risk being there for them by ignoring the importance of risk management tools. Take time to understand, review, and educate your volunteer team consistently on the proper risk management.

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