Tips for Nonprofit Risk Management
Building and maintaining a comprehensive set of plans can feel daunting, especially for nonprofit leaders balancing many priorities. From a Theory of Change and Strategic Plan to a Financial Plan, Succession Plan, and Disaster Recovery and Business Continuity Plan, the list is extensive. However, with a clear framework, approach, and mindset, these plans can become powerful tools for guiding your organization’s growth and impact.
Shift from a Scarcity Mindset to an Abundance Mindset
A key aspect of effective risk management is shifting from a scarcity mindset to an abundance mindset. When in crisis, it’s easy to react from a place of fear and anxiety about not having enough. This scarcity mindset limits creativity at a time when the organization needs it most. Scarcity is self-reinforcing; as organizations become risk-averse, they miss opportunities, further reinforcing risk aversion. Building psychological safety within your team is crucial for maintaining an open and curious environment where risks are seen as opportunities for growth and improvement. This mindset shift is essential for fostering innovation and adaptability.
Utilize Design Thinking
Design thinking is a human-centered, creative approach to problem-solving that emphasizes understanding the needs of your stakeholders, generating innovative ideas, and iterating solutions through testing and feedback. This approach is particularly well-suited for risk management because it encourages you to develop plans that are strategic, responsive, and tailored to the specific needs of your organization and the community you serve. By incorporating design thinking into your risk management strategy, you can engage your team, empower creative problem-solving, and build dynamic plans that are responsive to both internal and external needs.
For example, Art Institute of Chicago has successfully navigated complex challenges by adopting innovative approaches to preserving its vast collection and ensuring the safety of its visitors and staff. Their strategy aligns with design thinking principles by focusing on the needs of stakeholders (visitors and staff), generating innovative solutions for preservation and safety, and iterating on these solutions to address complex challenges.
Similarly, Action for Healthy Kids in Illinois has effectively addressed health and wellness challenges in schools by using a holistic, inclusive approach that engages both families and educators.
These examples highlight the importance of a strategic, adaptable approach to planning and risk management.
Final Thoughts
By embracing design thinking and shifting your mindset, you can transform the daunting task of managing risks into an opportunity for growth and innovation, ensuring your nonprofit remains resilient and focused on its mission.
Are you ready to tackle your nonprofit’s approach to risk management?
At Mission + Strategy, we believe that embracing design thinking can turn challenges into opportunities for growth and innovation. Let us help you build dynamic, responsive plans that empower your team and enhance your impact. Reach out to us today to explore how we can support your journey towards a resilient and thriving organization. Contact us now to get started!
Together, we are stronger.
If you’re interested in risk management planning or need support in balancing your mission and business strategies, we’re here to help.
Mission + Strategy is an invested thought partner to your nonprofit organization. Through our Strategic Advising, Mergers & Partnerships, and Shared Back Office service solutions, we help nonprofits achieve alignment between their mission and business strategies.
