Article
Increase funding success: The role of risk assessments in grant management
Feb. 11, 2025 · Authored by Michael Miranda-Moore, Megan Otto
As organizations engage with various funding sources, effective risk assessments in grant management have become essential, particularly when regranting funds to subrecipients. Not only are risk assessments a requirement for federal funding, but they also serve as a valuable tool for optimizing all types of funding.
Various organizations — including not-for-profits, for-profits, government entities, and others — benefit directly from conducting thorough risk assessments. These assessments are crucial for ensuring compliance with funding requirements and enhancing the overall success of funded projects and initiatives, especially when funds are passed down to subrecipients.
Learn how to improve funding success by understanding how risk assessments support compliance activities and how your organization can leverage risk assessments effectively.
Why risk assessments matter
Understanding and implementing risk assessments is crucial for the following reasons:
Informed funding decisions
Risk assessments provide organizations with valuable insights into the financial stability and operational capacity of potential grantees and subrecipients. This information enables funders to make informed decisions, thereby reducing the likelihood of project failures.
Cultivating accountability
By conducting risk assessments, organizations can establish clear expectations and monitoring protocols for their grantees. This fosters a culture of accountability, allowing funds to be used effectively and for the intended purposes.
Building stronger partnerships
Organizations that prioritize risk assessments demonstrate a commitment to supporting their grantees. By identifying potential risks early on, funders can provide the necessary resources and technical assistance to help grantees succeed.
Ensuring sustainable impact
Effective risk management contributes to the long-term sustainability of funded projects. By empowering grantees with the capacity to manage funds responsibly, organizations can enhance the impact of their funding and foster positive outcomes in the communities they serve.