Risk Management and Strategic Planning are Inter-Related: Strategic planning is a useful exercise in providing guidance in fulfilling a mission. Unfortunately, most strategic plans fail to consider risks and have no visible articulated connection to the organization’s strategy. Risk management and strategy-setting are not separate and distinct activities. Nonprofits must take certain risks to achieve their mission. Boards are showing a growing interest in developing a more robust risk management protocol in which senior management and the board together identify major risks and establish a process for mitigating them.
Engaging the Board and Financial Oversight Committee: Risk management should be a collaborative process between the board or its financial oversight committee, and senior management. Insight into clearly articulated and quantified risks eliminates second guessing and the “we never saw this coming” syndrome.
Don’t Ignore Opportunities for Strategic Investment: All organizations have wish lists – those strategic investments of capital that might ensure continuing or enhanced relevance to its constituents. They are unbudgeted and unplanned and represent a sort of “if we only had the funding” expenditure for such things as technology and human capital. A meaningful reserves strategy incorporates not only identified risks, but also future investment opportunities such as new programs, upgrades to infrastructure, public relations campaigns, or other advocacy efforts.
Reserves strategy is an outcome of an effective risk management protocol. In an advisory capacity, we work with you in identifying and quantifying potential risks and future opportunities. We integrate them into clear-cut reserves strategy that harmonizes with your organization’ s strategic goals; enabling more effective and efficient mission execution.