Creating Your Church’s Risk Management Plan
One of the most essential elements to advancing your God-directed mission is managing the uncertainty and potential for loss along the way. This is risk management.
Risk management matters for churches. Being aware of risk and taking steps to manage it allows you to capture opportunities and stay focused on your mission and loving people like Jesus. Otherwise, you can get stuck on the consequences and fallout of risks left unmanaged.
So where do you start? We use this framework to help our clients manage risks:
Identify
Ask yourself what could possibly go wrong. Be honest. Consider all the things that could cause injury, harm or loss, even those that seem far-fetched for your church.
Create a list of those items. We recommend creating a risk register, which contains the risks identified, quantified and controls to manage the risk. (We can help with this!)
Analyze
As a leadership group, look at each of the risks you listed and ask: “If this risk is not managed, how will it impact our staff, guests, members and the organization?” Add those notes to your risk register. Be specific as to the people and assets that will be impacted.
Estimate the frequency and severity of each risk listed. In your risk register, rank the risk on a scale of 1 to 10 based on how likely it is to happen and the severity of consequences if it did happen.
Evaluate
Is the risk acceptable? Can you create a control to manage it? Consider possible solutions. What options could manage the risk? Try to identify at least two controls for each risk.
With each risk, you have four options:
Avoid the risk (by canceling the activity, eliminating the program, etc.).
Reduce the risk (by implementing controls).
Transfer the risk (through outsourcing or insuring).
Retain the risk (accept it and budget for it).
TREAT
Assess your highest-rated risks and create a plan that will help you manage them. (While that sounds easy when laid out in a single sentence, there is a LOT that goes into assessment and plan creation. We’ve done this with a lot of organizations and can help you, too.)
Implement the solution. Communicate with all stakeholders about the control(s) you have/are putting in place, and gather feedback on potential impacts.
MONITOR
With your new controls in place, you’ll want to re-visit your risks and controls on a regular basis to determine what’s working and what needs more adjustment. When you find something that’s not working (or identify a new risk), you’ll use this same framework to fine-tune until you’re confident the system will hold.
If your church is growing, you'll need to add new risk areas, assets and people that could be impacted, and new controls. Risk management is a continuous process.
What questions do you have? What scares or excites you about this framework? We’re here to help.
Maurine Holt is a risk management consultant who is naturally curious and genuinely authentic. She finds joy in spending time with her three kids and helping churches navigate the waters of risk in pursuit of their mission.
