Risk Management: Remember to Review and Update Your Organization’s Plan!

Risk management can play a critical role in a nonprofit's success or failure. A good risk management plan ensures that the organization will have enough assets to carry out its mission, while also ensuring that the group's actions will not harm the client population it is trying to serve, the general public, or its own employees and volunteers.Without such a plan, organizations are vulnerable to events that could impose significant costs or entirely shut down their operations.

But risk management should not begin and end with the creation of a risk management plan.To ensure that your organization is properly prepared for and protected against risk, you should conduct an annual review and update of your plan to ensure that it addresses recent changes in your nonprofit, such as a shift or increase in the types of activities your group engages in or the purchase of a piece of property or another significant acquisition, as well as changes from outside your organization, such as new state or federal laws that affect nonprofits.

With many nonprofits gearing up for a busy spring and summer, now is the time to do it. You should meet with your insurance broker to make sure your insurance coverage is up to date. You should also take time to review your policies and procedures to make sure your organization is following best practices.

For more information on creating and reviewing your organization's risk management plan, read A Nonprofit's Guide to Risk Management and Insurance.