CHARITY TRUSTEES AND MANAGERS HEAR ABOUT IMPORTANCE OF EFFECTIVE RISK MANAGEMENT

Charities face a massive variety of risks  in their everyday operation, and need to take positive action to mitigate those risks: that was the message taken away by representatives from more than 20 Norfolk charities at the latest in a series of Charity Masterclasses being presented by Lovewell Blake.

From cybercrime to financial fraud, loss of staff and volunteers to loss of funding, governance issues to adverse publicity – there is a plethora of perils facing those responsible for managing charities.

The masterclass provided trustees and managers with a checklist of potential risks, identified effective risk management strategies, and explored the new dangers posed by cyber fraud and digital crime. 

Action Fraud reports that in 2022 charity frauds are up 44% on 2021, with one in eight charities falling victim to cybercrime in the past 12 months – and yet fewer than one in four charities has a formal cyber security policy in place.

Lovewell Blake charity finance specialists Stef Smith, Kyle Smith and Rebecca Frost stressed that risk management is a dynamic process and not a one-off event.

“Identifying and managing the possible and probable risks that a charity may face over its working life is a key part of effective governance for charities of all sizes and complexity,” said Stef Smith.

“By managing risk effectively, trustees can help ensure that significant risks are identified and monitored, and that the charity can make the most of opportunities with the confidence that any risks will be managed. 

“Ultimately this leads to improved forward and strategic planning, and a more successful achievement of the charity’s aims.”

The masterclass identified five key categories of risk: governance, operational, financial, external and legal compliance.  Delegates were introduced to a four-stage strategy to manage those risks, with the headings ‘Transfer, Avoid, Mitigate and Accept’.

“It is vital to draw up a plan with the aim of bringing risk down to an acceptable level, striking a balance between risk management and cost effectiveness,” said Stef Smith.  “Good risk management is about enabling organisations to take opportunities and to meet urgent need, as well as preventing disasters.”

The masterclass was the fourth in a series of free masterclasses being presented by Lovewell Blake’s specialist Charity Team.  More events are being planned for 2023; any charity trustees or managers wanting to be informed on the 2023 programme can register their interest by emailing t.cox@lovewell-blake.co.uk.