From NGO Handbook
This article was based on an article prepared for the NGO Handbook by Jennifer L. Tavis, titled, "Impact Assessments and Risk Evaluation.
Risk assessment is the methodical collection and ranking of risks according to severity of consequences and probability of occurrence, and then the creation of a plan to mitigate identified risks. It is used with specific technical meanings in a number of contexts, from finance to medicine, but certain common elements can be identified across the board.
In all cases, risk can be defined as the potential for negative eventualities, including loss, injury, and damage. Assessing risk involves taking into account not only the severity of the negative eventuality but also its probability. There are mathematical formulas for assessing risk, but these can only be used if all of the data you are trying to analyze is quantitative, which is rarely the case outside of the world of finance.
In an NGO context, risk assessment is generally going to be based more on facts and opinions than on numbers.