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The importance of risk management for charities and non-profit boards

When you’re responsible for a charity or non-profit organisation, risk management is much more than a box ticking exercise.


Identifying and managing the possible and probable risks that your organisation may face over its working life is a key part of effective governance.


The diverse nature of the sector means all charities face some level of risk and exposure, but the essential question is whether yours can continue to meet the needs of beneficiaries now and in the future.


For example, in this period of economic uncertainty, financial risks include:

  • Termination of funding from other bodies
  • The future of contracts
  • Fundraising from the general public
  • Fluctuations in investments
  • An unforeseen rise in demand for services


As a trustee, your approach to risk management should be thorough, and cover all bases of your operation. Doing this ensures four things:

  1.  Significant risks are known and monitored, so you can make informed decisions and take timely action
  2. You can take opportunities and develop them with the confidence that any risks will be managed
  3.  Forward and strategic planning are improved
  4. The charity’s aims are achieved more successfully


How you can manage risk more effectively

Identifying and managing risks in-house isn’t always easy. Critical success factors begin with buy in from the top, integrating risk with strategy and performance.


You should consider appointing a risk management owner/champion who takes overall responsibility for the assessment, quantification and monitoring of risks, as well as maintaining a risk management plan – a living document to be revisited and reassessed regularly.


Want expert assistance from experienced external risk consultants? Our experts have a proven strategy for risk management and will work alongside your leadership team to put it into action.


Get in touch with Mark at or 01225 904704 today for a chat about refreshing your approach to risk.

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