How Non-Profits Can Maintain a Holistic View of Financial Crime Risk

Why a holistic view matters Tips for evaluating financial crime risks holistically 1. Build detailed donor profiles 2. Evaluate counterparty relationships 3. Map and analyze the flow of funds 4. Incorporate context and relationships 6. Strengthening holistic risk management with data 7. Embedding a holistic approach across the organization The bottom line: protecting your mission with a holistic view Is your NPO equipped to evaluate financial crime risks holistically?

Non-Profit Organizations (NPOs) operate in a dynamic and increasingly complex risk environment. From vetting donors to ensuring compliance with anti-money laundering (AML) regulations, NPOs must evaluate risks that could compromise their mission and reputation. However, focusing on isolated risks is no longer sufficient. To effectively prevent financial crimes, NPOs need a holistic view of financial crime risk—one that integrates donor profiles, counterparties, and the flow of funds into a comprehensive framework. 

Here are practical tips to help NPOs evaluate financial crime risks comprehensively, ensuring compliance while protecting their operations and integrity. 

Why a holistic view matters

Financial crime risks rarely exist in silos. A seemingly low-risk donor could be linked to high-risk jurisdictions, sanctioned entities, or questionable sources of funds. Without a full understanding of these interconnections, NPOs risk overlooking critical vulnerabilities. 

A holistic approach enables NPOs to: 

• Uncover hidden risks by analyzing relationships and patterns. 

• Ensure compliance with global regulations, such as AML and sanctions laws. 

• Build trust with donors, stakeholders, and regulatory bodies. 

Tips for evaluating financial crime risks holistically 

To effectively manage financial crime risks, NPOs must assess the full picture—considering donors, counterparties, fund flows, and relationships together while continuously monitoring for changes. 

1. Build detailed donor profiles 

Understanding your donors is the cornerstone of effective risk management. Go beyond basic identity checks by collecting and analyzing comprehensive donor information:

• Source of funds: Verify where donations are coming from and ensure they align with legal and ethical standards. 

• Geographical risks: Assess whether donors or their funds are linked to high-risk jurisdictions or sanctioned regions. 

• Reputation: Screen donors against adverse media and sanctions databases to identify any potential red flags. 

TIP: Use automated screening tools to continuously monitor donor profiles for changes in risk status. 

2. Evaluate counterparty relationships 

Donors are not the only stakeholders to consider. Counterparties, such as vendors, intermediaries, or partner organizations, can also pose risks. Evaluate their: 

• Connections: Are they linked to sanctioned entities or involved in predicate crimes? 

• Jurisdictional risks: Are they operating in or connected to high-risk regions? 

• Behavior patterns: Look for unusual activity, such as sudden changes in transaction volumes or purposes. 

TIP: Establish a due diligence process for counterparties, including regular audits and ongoing monitoring.

3. Map and analyze the flow of funds 

The movement of funds is often where financial crimes are most evident. To maintain a holistic view, NPOs should:

• Track funds end-to-end: Understand how donations flow from donors to beneficiaries, including all intermediaries. 

• Identify anomalies: Look for irregularities, such as funds routed through unexpected jurisdictions or accounts. 

• Monitor for misuse: Ensure funds are being used for their intended purposes and not diverted for illicit activities. 

TIP: Leverage data analytics tools to detect patterns that may indicate financial crime risks, such as structuring or layering of transactions.

4. Incorporate context and relationships 

Risks often emerge when individual factors are considered together. For example, a donor who appears low-risk may pose a higher risk when linked to a high-risk counterparty or jurisdiction. To address this: 

• Analyze interactions: Evaluate how donor profiles, counterparties, and fund flows interact. 

• Use network analysis: Map relationships between donors, intermediaries, and beneficiaries to uncover hidden connections. 

• Contextualize risks: Consider external factors, such as geopolitical events or regulatory changes, that could impact risk levels. 

TIP: Use risk management software capable of relationship mapping to visualize interconnected risks.

5. Implement continuous monitoring 

Risk is not static—it evolves as donor relationships, external conditions, and organizational priorities change. To stay ahead, NPOs must adopt continuous monitoring practices:

• Real-time alerts: Use tools to receive immediate notifications of changes in donor or counterparty risk profiles. 

• Periodic reviews: Regularly reassess risks to account for new information or evolving circumstances. 

• Emerging threats: Stay informed about new financial crime typologies and adapt risk frameworks accordingly. 

TIP: Establish a perpetual risk assessment framework that integrates real-time data and periodic evaluations. 

6. Strengthening holistic risk management with data 

Maintaining a holistic view of financial crime risk depends on high-quality data. Here’s how NPOs can ensure their data supports comprehensive risk evaluations: 

• Data quality: Ensure data is accurate, complete, and timely to avoid blind spots. 

• Data governance: Establish policies for managing and securing data to ensure consistency and reliability. 

• Data integration: Centralize data from different departments to enable cross-functional analysis. 

TIP: Analyze data quality on a regular basis to ensure effectiveness within your risk management framework.

7. Embedding a holistic approach across the organization 

A holistic view of financial crime risk must permeate every level of the organization: 

• Strategic level: Align risk management practices with the organization’s mission and long-term goals. 

• Tactical level: Ensure departmental strategies, such as fundraising or compliance, operate within established risk parameters. 

• Operational level: Train staff on day-to-day risk management practices, such as identifying red flags or escalating suspicious activity. 

TIP: Foster collaboration between departments to break down silos and encourage information sharing. 

The bottom line: protecting your mission with a holistic view 

Financial crime risk is complex, interconnected, and ever-changing. For NPOs, maintaining a holistic view is essential to protecting their mission, reputation, and compliance obligations. By building comprehensive donor profiles, evaluating counterparties, analyzing fund flows, and leveraging high-quality data, NPOs can confidently navigate the risks they face. 

In doing so, they not only safeguard their operations but also strengthen trust with donors, stakeholders, and beneficiaries—ensuring they can continue making a positive impact on the world. 

Is your NPO equipped to evaluate financial crime risks holistically? 

Start by assessing your current risk management practices and identifying gaps in your approach. With the right tools and strategies, you can build a resilient framework that keeps your mission on track. Our latest whitepaper, “Financial Crime Risk Management for Non-Profits: Understanding Risk Appetite, Assessment, and Prevention,” can help guide you through the process.