New regulation also on charities’ radar as GDPR and cyber-crime both make top five, while the impact of Brexit only just sneaks into top 10
A new survey has revealed what charities think are the biggest risks facing their sector heading into 2018. The research, conducted by specialist insurer Ecclesiastical, found that while the continued pressure on funding is top of the list (84%), the impact of potential government changes is second on the list of risks (72%).
This is perhaps unsurprising given that 2017 saw the introduction of the Fundraising Regulator, further funding cuts and tax changes such as the rate of Insurance Premium Tax (IPT) increasing to 12%. Ecclesiastical has been working with the Charity Finance Group since January 2017 to raise awareness of the impact of continuing IPT increases on charities. The insurer urged the Chancellor to consider making charities exempt ahead of the Budget in November.
The poll also revealed that new regulation is a growing concern, with General Data Protection Regulation (GDPR) being introduced in May 2018 fourth on the list at 65%, just behind reputational risk at 66%. The impact of Brexit weighed in at number 10 – a concern for 44% of charities. Top 10 risks (charities who said they were concerned or very concerned):
David Britton, charity director at Ecclesiastical, said: “This is a time of transformation with charities becoming ever more innovative in their fundraising and exploring new models and ways to engage. This, coupled with new regulation and increasing threats such as cyber-crime, means that charities are facing and taking more risks than ever before.
“New Philanthropy Capital’s (NPC) recent ‘State of the Sector’ research, which was supported by Ecclesiastical, revealed that more than half of charities said they are taking more risks than three years ago. “The important thing to remember is that good risk management and governance coupled with the right level of professional expertise can help charities to embrace new opportunities and mitigate the financial risks they are dealing with in a difficult and ever-changing economic climate.”