Risk Management Framework for Not-for-Profit and Charity Organisations

---

A risk management framework defines how risk is identified, assessed, managed and overseen across an organisation.

For not-for-profits and charities, a framework must do more than satisfy documentation requirements, it must support Board accountability, regulatory expectations and safeguarding obligations.

A framework that exists only on paper does not reduce risk.

Many NFPs technically “have” a framework, yet Boards still lack confidence.

Common failure points include:

• Risk registers disconnected from strategy
• No clear ownership of material risks
• Risk appetite that does not guide decisions
• Safeguarding treated as a standalone issue
• Reporting that describes activity, not exposure

The result is false assurance. 

 An effective framework clearly defines:

• Board risk oversight responsibilities
• Management ownership of specific risks
• Delegations and escalation thresholds

Boards remain accountable even when management executes.

Risk appetite articulates:

• The level of risk the organisation is willing to accept
• Where there is no tolerance (e.g. safeguarding)
• Decision boundaries for management

Without appetite, risk ratings are subjective and inconsistent. 

Risks must reflect:

• Strategic objectives
• Regulatory and funding obligations
• Safeguarding and duty of care exposure
• Cultural and capability risks

Operational risks sit within this context not instead of it. 

Effective assessment:

• Focuses on consequence and impact, not volume
• Highlights interdependencies
• Differentiates between inherent and residual risk

Boards need visibility of where the organisation is exposed, not just what controls exist.

For organisations serving vulnerable people, safeguarding must be:

• Embedded into enterprise risk
• Supported by escalation triggers
• Actively assured

Safeguarding is a core governance risk, not a compliance add-on.

Good reporting answers:

• What is outside appetite?
• What has changed?
• Where are controls failing?
• What requires Board attention now?

Traffic lights without narrative are insufficient.

Assurance provides confidence that:

• Controls are operating
• Risk ratings are accurate
• Issues are identified early

Assurance must align to material risks, not convenience.

AIRM Consulting designs and uplifts governance led risk management frameworks for not-for-profit organisations and charities.

We support Boards and executives to:

• Clarify risk ownership and accountability
• Embed safeguarding into enterprise risk
• Strengthen reporting and escalation
• Build assurance Boards can rely on