No doubt, running a non-profit organisation is rewarding, but it’s not without risks. You might focus on helping the community and raising funds. But there are always challenges that could harm your work.
However, public liability insurance for non profit organisations protects your volunteers, staff, and community. It covers legal costs and claims if an incident occurs.
If you want your non-profit to grow and survive for the long term, you need to manage risks wisely. In this article, you will learn risk management techniques to protect your non-profit organization from any disaster.
Let’s have a look!
Identify Your Risks Early
The first step in risk management is knowing what could go wrong. You need to make of list of possible risks with the help of your team.
You prepare a list like:
- Financial risks
- Operational risks
- Legal risks
When you understand your risks, you can prepare for them instead of being surprised. Remember one important thing: you can tackle the problems only if you know them very well.
Create Clear Policies
Policies are your organisation’s rules. They guide how you handle money, how you treat people, and how you make decisions.
Your team might act differently without clear policies. This thing creates confusion and leads to disasters. When you write down your policy, you can set clear expectations and reduce the risks.
Need Good Financial Controls
As you know, financial problems can destroy a non-profit. You should not hand over full control to a single person over your finances. Instead, you can use a system where at least two people approve large payments. Plus, you need to keep accurate records of each transaction. You should also check your account to make sure everything is correct. This way, you can prevent fraud and errors.
Train Your Staff and Volunteers
Your staff is your asset. But they can be a risk if they don’t know the rules. You should train staff and volunteers on safety, ethics, and legal requirements. This reduces the mistakes and accidents. By staff training, you ensure that they maintain your reputation.
Must Have Insurance
Remember, accidents can still happen even if you manage risks well. But if you have insurance, you can protect your non-profit from large financial losses. But you should buy insurance according to your needs. You may need public liability insurance, volunteer insurance, property insurance, or cyber insurance. It’s better to be prepared than to face a huge bill you can’t pay.
Comply with Laws and Regulations
Rules are for everyone and everything. Every non-profit must follow certain rules, such as tax laws, fundraising laws, and workplace safety laws. If you ignore these, you can lose your non-profit status. You should keep up to date with the regulations that apply to you. If you don’t know the laws, it is better to seek advice from experts.
Review Risks Regularly
Risks change over time. What was a big risk last year might not be a problem now, and new risks can appear. You should review your risk plan at least once a year and update it when needed. This keeps your organisation ready for whatever comes next.
Learn from Other Organizations
You don’t have to figure out risk management alone. You can learn from other non-profits. For this, you need to attend training workshops and read case studies. As you know, not all organizations are successful; if some are successful, they have a proper history. You should study how they handle the challenges. If you want to make this process easy, you can set a benchmark. Simply, pick the big organizations and study them, and make them a role model.
Manage Partnerships Carefully
If you work with other organizations, you should choose the right partners. Before picking any partner, you should look at their history. This way, you can know everything about the partner you’re going to choose. Remember, a bad partner can damage your reputation. Plus, you can also face legal problems due to your partner. Besides, you also need to set clear agreements and make sure they share your values.
Plan for Leadership Changes
Leaders sometimes leave unexpectedly. Without a plan, this can confuse and slow down your work. You should have a succession plan that names who will take over key roles if needed. This keeps your organisation stable during changes.
Final Thoughts
Risk management is not about avoiding all risks; it’s about being ready for them. When you take the time to identify risks and create strong policies, you protect your non-profit. You also build trust with donors, volunteers, and the community, because they know you’re responsible and reliable. Running a non-profit is challenging, but with smart risk management, you can handle future problems.
Lynn Martelli is an editor at Readability. She received her MFA in Creative Writing from Antioch University and has worked as an editor for over 10 years. Lynn has edited a wide variety of books, including fiction, non-fiction, memoirs, and more. In her free time, Lynn enjoys reading, writing, and spending time with her family and friends.
