CED Risk Assessment & Management 2

Question 1

A nonprofit executive director discovers that a key grant funder represents 60% of the organization's annual budget. Which risk management strategy is most appropriate?

Accepted Answer

Mitigate the risk by actively diversifying funding sources

Answer

Diversifying funding sources reduces concentration risk and decreases dependency on any single funder.

Question 2

What is the primary purpose of a SWOT analysis in the context of organizational risk management?

Accepted Answer

To identify internal and external factors that may affect organizational objectives

Answer

SWOT analysis identifies Strengths, Weaknesses, Opportunities, and Threats to inform strategic and risk planning.

Question 3

An organization's risk register should be reviewed and updated at minimum:

Accepted Answer

Annually, or whenever significant organizational changes occur

Answer

Risk registers should be reviewed at least annually and after significant changes to keep risk information current and actionable.

Question 4

Which of the following best describes residual risk?

Accepted Answer

The risk remaining after mitigation measures have been applied

Answer

Residual risk is the level of risk that remains after controls, mitigation strategies, or other risk responses have been implemented.

Question 5

A CED is preparing for a potential cyberattack on the organization's donor database. Which response plan element is MOST critical to establish in advance?

Accepted Answer

Clear roles, communication protocols, and a data recovery procedure

Answer

Effective incident response requires pre-defined roles, communication chains, and recovery steps to minimize damage and restore operations quickly.

(CED) Certified Executive Director Practice Test

(CED) Certified Executive Director Practice Test

CED Risk Assessment & Management 2