Managing Your Nonprofit for Resilience

3Perform a Risk Inventory

YOUR NONPROFIT ORGANIZATION may have great plans, but if you do not have a realistic understanding of your risks, those plans are merely hopes and dreams. Because of this simple truth, the first step in Lean Risk Management should be a risk inventory: a thorough identification of potential threats and opportunities facing the organization. This chapter and the next will explain how.

You Cannot Figure Out How or Where to Go Until You Know Where You Are Now

A risk inventory is a guided brainstorming exercise to spot potential positive and negative issues within your nonprofit and po‐tential external forces that could affect performance. The benefits of a risk inventory can be substantial:

• Clarity. In any organization with more than a few team members, no single person knows everything about the business. Because the risk inventory gathers viewpoints of many participants, it may provide senior management with insight into challenges and opportunities that they may never have seen. Team members within an organization may also gain greater awareness of what others are working on, the challenges others face, and choices faced by senior management.
• Dialogue and consensus. The risk inventory process fosters a greater appreciation for different functions within the nonprofit. Team members may find unexpected consensus: many of them may list the same issues within the same functions. Furthermore, when team members disagree about risks, a risk inventory creates ...