The risks of money laundering and terrorism financing are major threats to nonprofit organizations, as their unique characteristics make them vulnerable to exploitation. Risk management is important in identifying vulnerabilities and mitigating risks so that nonprofit organizations are not exploited for illicit activities. The risks faced include strategic, financial, and compliance, which can be exacerbated by poor strategic planning, inappropriate financial management, and lack of compliance practices. It is important to protect nonprofit organizations from money laundering and terrorist financing without hindering legitimate charitable activities or restricting access to resources. Good governance, strong financial management, including internal controls and risk management procedures, is the best approach to preventing abuse. Thorough due diligence of parties involved with a nonprofit organization is also important. Administrators of non-profit organizations should be informed about steps to prevent money laundering and terrorist financing and actions to take if they suspect abuse.