What is Risk?
Risk is the chance of something happening that negatively affects your organisation or its goals.
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Risk management
Risk is the chance of something happening that negatively affects your organisation or its goals.
Can You Avoid Risk?
Often, no. Risk is part of all organisations, not just nonprofits. However, you can implement controls to lower the chances of risks occurring and lessen their impact if they do.
Why Risk Management Matters
Risk management isn’t just about preventing issues. It helps you spot threats and seize opportunities to manage them. For charities and community organisations, proactive risk planning builds resilience and boosts impact. Managing risk is also a key part of the Charity Regulator’s Code of Governance.
Common Risks for Nonprofits
The Charity Regulator’s guide to managing risk highlights seven key risk categories:
- Governance – e.g., high board turnover
- Strategic – e.g., failing to track progress against your strategy
- Compliance (legal or regulatory) – e.g., not meeting Charity Law requirements
- Operational – e.g., project delays due to capacity or resource issues
- Financial – e.g., weak financial controls
- Environmental (external operating environment, not climate risks)
- Reputational – e.g., negative media exposure
You might also consider additional categories like Human Resources or Technology.
What is a Risk Register?
A Risk Register is a document that lists each risk your organisation faces and how you manage those risks. It generally includes:
- Risk category
- Description of each risk
- Likelihood of occurrence
- Potential impact
- Controls and mitigations
- Person(s) responsible for managing each risk
Many registers use a rating system, scoring likelihood and impact from 1 to 3 for an overall risk rating. Our template risk register is available to members in the Tools & Resources section below.
How to Manage Risk
Embedding Risk Culture
Embedding risk awareness in your operations is a positive sign. It ensures everyone is looking out for potential issues at both governance and operational levels. Here are some steps to help:
- Embed risk awareness in daily operations.
- Conduct risk assessments for new activities or projects.
- Train staff and volunteers on risk processes and responsibilities.
- Ensure systems are in place for anyone to raise concerns.
Tools & Resources
- Download the ‘Reducing the Risk’ Toolkit for detailed guidance.
- Download the Charity Regulator’s guide to managing risk.
- Explore The Wheel’s Risk Management Policy for reference.
- Download The Wheel’s template risk register.
- Check out The Wheel’s webinar archive.