October 2010

Times are hard, but for the charity sector things could get a lot worse. Cuts, due to reduced government spending and an increase in competition for contracts are expected to total £5bn over the next few years. Added to this pressure is the expectation of central government that charitable organisations and voluntary groups can pick up the slack left by the cuts to other services previously provided by local government.

That said, recent research suggests that the charity folk are a buoyant lot, so much so that despite 77% of charities feeling the impact of the recession, a recent report from PKF showed that 80% felt that they had a clear, agreed and documented vision going forward.

When questioned further, almost half of the charities surveyed felt that the recession has prompted them to think more strategically. This indicates that an increasing number of charities are taking on board the importance of planning for different scenarios and that they are starting to face risk head on.

But there is still a long way to go. In the PKF report 95% of charities said that risk management should be used for strategy and priority setting, project and option appraisal, operational plans, investment decisions and reserves policy. This is great news, but with just under 70% admitting to not having a fully embedded risk management strategy, it does beg the question how effective the use of it might be in these areas.

The PKF report also highlighted a number of tips and tricks for conducting risk assessments

Some suggestions from the surveyed charities include:

● Communicate the risk management strategy clearly to staff

● Involve trustees at all stages of the risk management process

● Take action before you are forced to

To download a copy of the PKF report please visit their website

 

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