Risk management as a process:
- Seeks to prevent or minimize the financial impact of actual and potential losses
- Preserves the assets of the nonprofit in a responsible ways
- Manages uncertainty, whether that uncertainty produces results better or worse than expected
When documented:
- Provides basis for and explanation of all decisions
- Enhances any defence of those decisions, if needed
- Reference and resource for future decision making
- Record of all proceedings
- Communication of decisions to all stakeholders
- Increased trust between decision makers and stakeholders
Risk Management decisions enable:
- Achievement of nonprofit mission and objectives
- Management of the uncertainty and consequences of future events
- A continuous, proactive and systematic process to understand, manage and communicate risk
- Establish the most cost-effective procedures to ensure funds are available to pay for the consequences of a loss
