Financial Risks
Virtually every nonprofit faces financial risks as well as financial stress.1 More specifically almost every nonprofit faces difficulty or constraints in raising the funds required in order to achieve their goals and objectives. Generally, financial risk for a nonprofit is a negative risk, or a one-way risk. Rarely is the risk that the nonprofit has too much in the way of financial resources. Ironically, when this pleasant surprise does occur it likely might be a curse in disguise as feuds about how to spend the windfall may arise as new priorities become possible.
By definition, a nonprofit firm is not designed to operate at a profit, nor is it set-up to hoard excess financial resources for a future need. Thus, financial ...
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