BI recently finalised a Donor Risk Assessment for the Swedish organisation Vi Skogen. The assignment focused particularly on reputational risks with input to the organisation’s Resource Mobilisation Strategy. Reputational risks are by definition difficult to identify and predict. But with a robust risk management system in place, also these risks may be mitigate, management or even avoided.
Reputational risks are risks that may cause damage to the organization’s image and brand name that results in future harm or losses to financial capital, social capital and/or ability to realise organisational objectives.
Partnerships and funding from donors are associated with risks that may cause disruption, deteriorate relations with other investors or donors, generate negative press coverage, and fire up social media. Association with donors with questionable backgrounds, malpractices, or misaligned values can cause severe damage to an organisation’s reputation and jeopardize its social and brand capital. This in turn can have direct negative consequences for operations and future resource mobilisation efforts.
That said, it is impossible and impractical to safeguard against every risk that can be associated with fundraising and resource mobilisation. A coherent resource mobilisation strategy in combination with purposeful risk assessment processes and routines are typically developed to efficiently assess and prevent significant risks while still effectively mobilise funds. Risk management and mitigation routines are put in place to ensure preparedness should unfavourable scenarios unfold.
The fundamental point of departure for assessing risk is the relationship between risk, likelihood, and consequences. In more detail, risk assessment can be explained as the process of identifying and analysing potential future events that may negatively impact the organization, the likelihood of those risks, and the scope and type of impact those risks might have. An effective risk assessment should assess how much of each type of risk an organization is able to tolerate.
A robust risk assessment system of this kind can proactively address potential negative impacts and reduce risk exposure. And help you protect your organisation’s operations and brand.