Managing Your Nonprofit for Resilience

APPENDIX 4Fundamental Risk Management Elements (FRaMEs)

MANY NONPROFITS DO not yet have formal risk management programs. Still, most nonprofits use some forms of risk management every day. This book refers to these practices and documents as fundamental risk management elements (FRaMEs). If you are like most nonprofits, you probably use some of these FRaMEs, but you may be interested in whether you have them all and whether you are getting full value out of each tool. So what are these FRaMEs? They include the following.

Official Documents and Policies

• Articles of incorporation. A nonprofit's articles of incorporation are filed in its state of incorporation. This document lists the initial purpose of the organization and its original board of directors. The risk management function of articles of incorporation are simple: periodically, the organization should review its articles to confirm that its current mission and programs conform to its articles. If the nonprofit finds any inconsistencies, the organization should either file revised articles of incorporation or modify its practices to constrain its behavior according to the articles.
• Bylaws. Bylaws set forth how a nonprofit board of directors will perform its functions, including whether and how it delegates authority to staff. A nonprofit should periodically confirm that its board continues to perform consistent with its bylaws. It should also periodically explore whether any bylaws should be modified to enhance work ...