Risk assessment: a case of a non-profit organisation in the environmental sector.

Abstract

In South Africa (SA), non-profit organisations (NPOs) are governed by Codes of Good Practice, and the resulting strong governance, supported by effective risk management, is foundational to these organisations’ ability to anticipate and effectively respond to complex challenges. However, although organisations are expected to set higher standards through self-regulation mechanisms and abide by norms of good governance to improve their own transparency and accountabilities, the management of risks in the non-profit sector has not received adequate attention (Social Development, 2012:27). Effective risk assessment can improve the proper functioning of any organisation. This includes having financial stability, good governance, effective risk response strategies, the ability to make informed decisions, improved planning, and performance, and creating a positive organisational structure. The objective of this study is to give insight into the risk assessment of a non-profit organisation in the environmental sector. To achieve this, the study utilised three research questions: “How can a non-profit organisation identify an effective risk assessment process that can minimise risks?”; “Why is risk assessment important to the non-profit organisation?”; and “What are the challenges of risk assessment that are common among non-profit organisations within the environmental sector?” The research was a case study because a case study approach allows “in-depth explorations of complex issues in their real-life settings” (Crowe, Cresswell, Roberston, Huby, Avery & Sheikh, 2011:1). The research was also exploratory because it sought to understand the limited body of knowledge of risk assessment for the NPOs. Given the exploratory nature of the study, a mixed method design was used to collect primary data. A thematic analysis was used to analyse qualitative data and descriptive analysis to analyse quantitative data. The research was conducted in one of the leading environmental and conservation NPOs in SA. The target population for the study included top management of the organisation. Eighteen participants responded to the semistructured interviews and sixteen responded to the questionnaire. The study used a census technique where all participants who were willing to participate in the study were selected. The findings of this study suggest that a non-profit organisation is complex, thus, making it face unique challenges of growth, people, capacity, and reactiveness when conducting risk assessment. Despite these organisations carrying a non-profit status, results indicate that non-profit management viewed risk assessment as an important exercise to execute and that it must be a selfassessment controlled internally. The establishment of Risk Audit and Compliance SubCommittee (RAC), Risk Register, Internal Controls, and Risk Awareness are strategic processes implemented to effectively respond to risks.