Managing financial oversight: An infographic and guide for leaders

For nonprofits, adaptability and resilience are key to success. With donor patterns changing quickly, cyberthreats continuing to impact and any number of other emerging challenges, strong financial oversight and proactive risk management are essential tools for safeguarding the mission. By embracing strategic insights and innovative solutions, leaders can confidently navigate uncertainty and build a foundation for long-term sustainability and impact.

Our latest infographic, "Navigating financial oversight and risk," outlines key insights and actionable strategies for enhancing your organization's resilience.

Why financial oversight and risk management are crucial for nonprofits

The current climate presents significant hurdles for nonprofits. Our recent findings reveal:

• 74% of nonprofits report job vacancies, directly straining their financial oversight capacity.
• 68% plan to cut programs or services in the next 1–2 years due to mounting financial pressures.
• 41.6% cite inadequate finances/resources as a top challenge, while 46.5% report rising operating expenses as their biggest concern.

Maya Tussing, Partner and Co-Founder, Fairlight Advisors points out, “Nonprofits have this double-bind. They are often helping low-income or disadvantaged communities at a time when the economy is in a bad way. They rely on funding from donors and governments, which are probably pulling back at the same time as the community is struggling. How does a nonprofit survive when it is going through the same challenges as the community they're trying to serve?”

This underscores the urgent need for strong financial governance. Without effective oversight, organizations risk compromising their ability to deliver on their vital missions and serve their communities.

Nonprofit risk continues to evolve

Beyond financial pressures, nonprofits face more and more complex risks. Alarmingly, only 30% of nonprofits have a strong culture of risk awareness and preparedness. This gap leaves many vulnerable to significant disruptions.

Key risks dominating the nonprofit sector in 2025 include:

• Cybersecurity: Identified as the #1 risk, driven by increased digital reliance and sophisticated AI-powered threats.
• Economic uncertainty and inflation: These continue to disrupt long-term financial planning, making stable budgeting and forecasting a constant challenge.

Proactive identification and mitigation of these risks are paramount to protecting your organization's assets, reputation and operational continuity. Board members must fully understand fiduciary responsibility, the organization’s financials and risks that threaten the mission.

Heather Rich, Executive Director, American Board of Genetic Counseling, says, "The board has a key role in reviewing financial documents, budgeting, monitoring the financial health of the organization and ensuring that they are very active in making plans to handle when the organization faces challenges or uncertainties. It is the board's fiduciary responsibility to make sure that they have an understanding and the oversight of both the financials and any risks that may incur."

Click here to download the infographic in PDF format.

Actionable steps to strengthen oversight

Here are practical steps your nonprofit can take:

1. Foster a culture of risk awareness: Regularly assess and discuss potential risks across all levels of the organization, ensuring everyone understands their role in mitigation.
2. Prioritize cybersecurity: Implement robust cybersecurity measures, conduct regular audits and provide ongoing training to protect sensitive data and systems.
3. Develop resilient financial planning: Create flexible budgets and long-term financial strategies that account for economic fluctuations and inflation.
4. Leverage technology for governance: Adopt secure board management software to centralize financial documents, streamline approvals and enhance communication around risk.
5. Regularly review and update policies: Ensure your financial oversight and risk management policies are current, comprehensive and effectively communicated to all stakeholders.

Effective financial oversight and risk management are the bedrock of a resilient nonprofit. By understanding the challenges, embracing technology and implementing actionable strategies, your organization can navigate complexities with confidence, ensuring its vital mission continues to thrive.

“When we think about risk management, it's not just talking about risk, but it's about making decisions on how we are going to react. When board members come to board meetings more prepared and with access to more information and more comprehensive insights, they're going to make better decisions. BoardEffect is a must-have because it helps you make better decisions.” Ellen Glasgow, General Manager, Mission Driven Organizations, Diligent

Enhancing financial oversight and risk management with technology

Leveraging technology is no longer optional — it's essential. Solutions like BoardEffect can significantly streamline governance and risk management workflows.

Key features that can empower your nonprofit include:

1. A centralized location for all board work — accessible anywhere, anytime
2. One place for repeatable training on risk and financial literacy
3. Streamline agenda management to ensure financial oversight is on the agenda
4. Enterprise-grade security to keep confidential financial materials safe
5. Private workrooms for team and finance committee discussions

By centralizing information and automating processes, technology frees up valuable time and resources, allowing your board to focus on strategic oversight rather than administrative burdens.

To explore how BoardEffect can help streamline your financial governance and risk management, reach out today for more information. Let’s empower your board to lead with confidence and purpose.