What term describes the probability and magnitude of loss or disaster?

The term that describes the probability and magnitude of loss or disaster is "risk." In the context of budgeting and finance, risk refers to the potential for experiencing losses or adverse effects due to uncertain events. This concept is crucial in financial planning because it helps organizations understand the likelihood of various scenarios impacting their operations and the severity of those impacts.

In capital and operating budgeting, identifying and managing risk enables entities to allocate resources more effectively, implement mitigation strategies, and prepare for possible financial shortfalls. This foresight is essential for making informed decisions that safeguard an organization's financial health and operational resilience.

The other terms do not encapsulate this definition as closely. "Driver" typically refers to factors that influence or change outcomes but does not inherently convey risk. "Vulnerability" relates to susceptibility to harm but does not involve the probability aspect of potential loss or disaster. "Expenditure" refers to the action of spending funds, which is separate from assessing risk. Hence, the best fit for the description provided in the question is "risk."