Nonprofits and the value of risk management

Nonprofits have different missions and may have different objective functions. This is, in part, why individual nonprofits exist. This chapter provides background to the theory underlying risk management. Second, a brief overview of the risk management process is provided. Third, the strategic benefits of risk management are discussed. In addition to minimizing the cost of risk, the proper use of risk management can provide new opportunities or preserve opportunities in the event of a serious problem. Fourth, two short case studies of non-profits using various risk management techniques are provided. Finally, the last section provides conclusions and directions for future research.