Why Non-Profits Should Regularly Assess Risk
Did you know that your organization may be at risk? Organizations face a myriad of unexpected situations that can either promote their success or leave them vulnerable. Non-profit organizations are no exception and should employ risk management strategies to judge the likelihood, severity and effects of potential liabilities.
If your organization would like to mitigate its risks, you should consider seeking the aid of an experienced attorney that can help you conduct an efficient, detailed risk assessment. Even if a staff member is capable of performing the risk assessment, allowing outside legal counsel to evaluate risk will reduce any potential bias and provide knowledgeable advice from a legal perspective.
An effective risk assessment should:
- Identify, analyze, and prioritize all legal or ethical misconduct and compliance risks specific to the operations and culture of the nonprofit organization;
- Provide a foundation for compliance with training and ethics programs;
- Develop or improve risk mitigation and monitoring strategies;
- Identify areas where further analysis and review is required;
- Identify methods that can evaluate the success of risk management strategies; and
- Create a benchmark for continual risk assessment.
The risks most commonly addressed in such an assessment are the misuse of assets, internal or external fraud, inadequate monitoring of investments, violation of legal requirements, and damage to an organization’s reputation. Once these risks have been identified within an organization, the assessment will rank their potential occurrence and enable the organization to prioritize and monitor those risks through regular risk assessments.
Though regular risk assessment may seem tedious, it is a vital aspect of every successful non-profit. Contact an experienced attorney at the Northern Virginia office of Simms Showers for help with assessing and managing your organization’s legal risks.
Disclaimer: This memorandum is provided for general information purposes only and is not a substitute for legal advice particular to your situation. No recipients of this memo should act or refrain from acting solely on the basis of this memorandum without seeking professional legal counsel. Simms Showers LLP expressly disclaims all liability relating to actions taken or not taken based solely on the content of this memorandum. Please contact Robert Showers for specific legal advice on this issue for your needs. Simms Showers LLP © 2014
