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Nonprofit Risk Management Center A source for tools, advice and training to control risks ... so you can focus on your nonprofit's mission

August 15, 2007

The Risk Management Process

Measures to address risk should be practical and within the reach of the organization. Every nonprofit, from the largest to the smallest, can and should take time to look into the future and predict both downside and upside risks. In fact risk management is extremely important for small nonprofits with limited resources to draw on when things turn out differently than they expect. It is up to each nonprofit to select the strategies and approaches that is can afford and reasonably accomplish.

The risk management process as taught by the Nonprofit Risk Management Center consists of five important steps. When followed judiciously, the steps become part of the nonprofit’s decision-making process and become stronger with each use. The steps are listed here and then applied to a sports and recreation program as an example.

  1. Establish the context. Examine the mission, history and culture of your nonprofit to gauge how the risk management program should be structured to increase the potential of its success. Given the organization’s resources and needs, consider how broad in scope the risk management effort will be. Focus on a specific area (i.e., client safety) or specific functions (i.e., governance or operations).
  2. Appraise risks. Identify exposures to events that cause different outcomes than those expected. Begin with listing a wide range of risks and then separate between concerns requiring immediate attention and those that pose negligible threats to the nonprofit’s mission and survival.
  3. Decide what to do and communicate the decision. Evaluate alternative methods for addressing the nonprofit’s exposures to risk and select the most practical, affordable and effective approach for each targeted risk exposure.
  4. Act on your decision. Implement the strategies that the risk management team selected.
  5. Follow up and adjust. Monitor the results. How is the policy working? Is there a reduction in accidents, injuries, near-misses? Is production or service improved? Strategies that are not working as expected should be adjusted to meet the needs of the nonprofit and new strategies should be adopted to fill any gaps.

Sports and Recreation Application

Risk is inherent in any sports or recreation program. To remove the potential of risk or injury completely would change the fundamental nature of the sport. To change the way coaches, officials and administrators access risk often makes the difference between safety and injury. In sports and recreation, the risk management process may play out as follows:

  1. Establish the context. Consider the venue in which your sports program operates. Look at resources, the nature of activities offered, the nonprofit’s past history with accidents and loss, its perspectives on risk taking, the experiences and skill of participants and their ability to handle issues that arise.
  2. Appraise risks. Review the places that damage or injury can occur to people, property or the nonprofit’s reputation. Evaluate possible policies, procedures, personnel selection, training, supervision and equipment to protect participants from injury.
  3. Decide what to do and communicate the decision. Select one or more of the possible options. Communicate changes in to coaches, administrators, event/game officials, athletes and parents/guardians to ensure consistent use and application.
  4. Act on your decision. Purchase additional or updated equipment and show players how to use it safely. Train staff to use playing area checklists (pre and post game) that you create. Start using the selected rule change(s).
  5. Follow up and adjust. Monitor the results. Include periodic review (before and after the game) of playing surfaces, sports equipment and personal protective equipment to ensure that they remain in good condition for use. Note accident, injury and near-misses. Have these incidents declined based on implemented changes in policy or procedures? If not, return to step one and re-analyze the situation to develop new strategies.


SafeKIDS Wordwide — USA, www.usa.safekids.org, safety tips.

“Play by the Rules or Leave, Keeping Violence Out of Your Program,” free article

Playing to Win: A Risk Management Guide for Nonprofit Sports and Recreation Programs — Table of Contents, Nonprofit Risk Management Center, Washington, DC, www.nonprofitrisk.org

“Risk Management for Sports and Recreation Programs,” #14 from the Risk Management Classroom online series — risk management training on your desktop for your staff and volunteers. Description and pricing

“Take Children Safely Out to the Ballgame,” free article

“Water Dehydration” free fact sheet, Workplace Safety Is No Accident: An Employer's Online Toolkit to Protect Employees and Volunteers, Nonprofit Risk Management Center, Washington, DC

September 5

Managing Risks in Residential Treatment
2-3 pm EDT

Risks arising from residential treatment encompass facility risks, the specific population residing at the property and employees caring for the population. Policies and procedures, and effective hiring, training and supervision play a part in successful risk management.

Register people responsible for human resources, facility maintenance and safety, and supervisors to:

  • Look at the big picture and learn how to support each other’s efforts in providing a safe environment.
  • Identify the most likely risks and take steps to make them less likely to occur.
  • Review policies and procedures common to residential treatment in preparation for assessing or writing your own.

October 24-26

2007 Summit for the Nonprofit Sector

This 2.5-day event offers a unique training, educational and networking opportunity for leadership of the nonprofit sector. Here’s a sample of what’s in store for you.

Wednesday, Oct. 25

Serving Vulnerable Populations: Critical Risks and State-of-the-Art Responses

Nonprofits serving children, the elderly and persons with disabilities strive to deliver vital services without in causing harm. Yet, all nonprofits working with vulnerable clients need more than good intentions; they need a plan to prevent harm and to respond to harm should it occur despite the nonprofit’s precautionary efforts. How an organization reacts to accusations plays a major role in the cost and consequences of any subsequent claims filed by alleged victims. This session provides a frank discussion of what an organization must do (and must not do) when designing abuse prevention activities and responding to allegations of abuse.

READ about more Risk Management Sessions.

REGISTER for the conference online.

RESERVE your choice of rooms at the Marriott Winston-Salem for the 2007 Summit for the Nonprofit Sector, being held Oct. 24-26 in collaboration with the North Carolina Center for Nonprofits, a state association and one of the Center’s 10 satellite offices, and NCGives.

© 2007 Nonprofit Risk Management Center

(c) 2007 Nonprofit Risk Management Center