To sustainably fund its mission, your nonprofit needs to not only encourage engagement from its supporters, but also cultivate their loyalty. Donor loyalty is built on trust, so it’s vital to instill confidence in how you’re managing your organization to make a positive impact, especially when it comes to finance. 

While developing procedures for everyday recordkeeping and regular reporting is important, effective nonprofit financial management also involves planning for the unexpected. This is where risk management plans come in. 

In this guide, we’ll walk through four steps for creating a financial risk management plan that can help see your organization through challenges that may come your way. Some of these actions can also strengthen your day-to-day procedures, helping you demonstrate that you’re using donors’ contributions as promised for a good cause. Let’s dive in!