What are the key risks the charity sector is facing?

Expert speaks on why it won't be a case of leaping from the 'risk of the moment' to the next one

What are the key risks the charity sector is facing?

Risk Management News

By Paul Lucas

Positivity – that’s the keyword for the charity sector this year with the emphasis firmly on creating enhanced cultures within organizations.

After a difficult 2018, that saw issues surrounding the #MeToo Movement thrust firmly into the spotlight, Alyson Pepperill, CFIRM, clients and projects director, UK retail at Gallagher and chair of the IRM charities special interest group, believes that many firms will focus on approaching ‘business as usual’ risks in an orderly fashion – rather than leaping from one ‘risk of the moment’ to the next.

But what are these key risks?

“Managing regulatory risk will remain a key focus area with the numbers of regulators and the level of scrutiny growing,” she said. “In a recent KPMG survey of 98 larger charities’ reports and accounts the number of charities citing managing regulatory risk as a key risk in the trustee statement doubled from the same review undertaken a year earlier.”

Cyber may not be quite ‘business as usual’ given that it has only been thrust into the spotlight relatively recently, but it is likely to be a key stress point in 2019 much as it was last year.

“Cyber… is expected to remain in pole position until at least 2021,” she said. “This is probably not too surprising, given the real push within charities to become more agile in using digital communications with customers and supporters. Part of the issue is the sheer scale of risks that are bunched into ‘cyber’ as well as the increasing sophistication of those looking to commit cyber-crime, plus the inevitable accidental and malicious data breaches by employees and volunteers.”

The fear from these risks is that charities could see their reputation suffer – and that in turn could have a knock-on impact on sustainability and income, especially as there remains a need to achieve more with less resources. For this, risk management will step forward to the front line – and planning ahead will be crucial.

“In a fast-changing world some of the donations will inevitably need to be spent to ensure organisational resilience and retention of the best people – that isn’t always accepted,” she explained. “Public and media expectations for the sector remain high – perhaps unreasonably so - and the need to have a clear and easily deployed crisis management plan is vital.”

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