Risk Management: A Primer

Risk is the likelihood that an event will occur that will cause an undesirable effect. Risk management refers to steps taken to try to prevent that event from happening or from causing damage.

Perception of risk is relative and subjective. It lives in the eye of the beholder. As a process that is used to protect what you care about, in the philanthropic sector, risk management traditionally focuses on protecting assets and reputation. One thing it has traditionally not been used for is a deliberate process to protect impact. Because ‘risk management’ doesn’t mean one thing, it is important to define what you mean and what you are talking about when using this term.

This guide includes the four most common uses of the term ‘risk management’ in the philanthropic sector:

  • Legal Compliance
  • Financial Best Practices
  • Safety & Security
  • Ensuring Impact

More Tools Resources

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Open Road Resource
Risk Management: A Primer
The guide offers philanthropy practitioners a handy guide to diverse perspectives on “risk management” and highlights a range of practical tools available to funders and nonprofits.
Open Road Resource
Risk in Philanthropy: A Framework for Evaluation
This brief framework is designed to provide grantmakers and NGOs with tools to conceptualize and describe risk and its implications within the scope of their philanthropic work.
Open Road Resource
Foundations Don’t Know What They’re Risking
Critical gaps exist in philanthropy’s definitions of and approach to risk management. This article describes the scope of the problem and a framework for philanthropists to adopt risk-management practices that better equip the sector to address the challenges of our time.
Open Road Resource
Contingency Strategies, Mitigation Strategies
How to Build Effective Funder-Grantee Relationships
One of the most fundamental aspects of risk management lies within the funder-grantee relationship itself. Use this tool to build transparency and trust between funders and nonprofits.