The Charity Commission has updated its more than decade old guidance on financial risks to include advice on latest concerns, including the management of crypto donations and assets.

Also included in the update of the guidance, which was first published in 2012, is advice around risks around handling mobile payments.

Risks around crypto donations and assets, such as non-fungible tokens that use blockchain technology to create digital products such as art, include vulnerability to theft by hackers and potential sudden changes in value.

Difficulty in tracing donors due to the anonymised blockchain technology used is another concern raised, as is a lack of protection from agencies, such as the Financial Services Compensation Scheme.

“As more and more charities move to operate online and newer technologies are developed, such as the use of cryptocurrencies, trustees will need to navigate risks that might not have been previously considered,” said the regulator’s assistant director of policy Sam Jackson.

“We have updated our guidance to reflect the digital age we all live in and worked hard to ensure it is clear and simple to use.

“We know there are many internal and external risks to consider which is why we have also updated our helpful checklist so that trustees can have informed discussions about the measures they need in order to best protect their charity’s assets and donations entrusted to them by the public.”

We’ve updated our guidance on internal financial controls for charities.

The new sections cover issues including:

➡️ using mobile payment systems
➡️ accepting hospitality
➡️ accepting donations of crypto assets

Read more: https://t.co/P00NselokE pic.twitter.com/Op3HQesNMA

— Charity Commission (@ChtyCommission) April 26, 2023

The update has been carried out from feedback from a sample of 1,000 charities. Nine out of ten said they would recommend the new guidance to other trustees and 93% felt confident that they know what internal financial controles they needed for their charity.

Last week government figures revealed that a quarter of charities had experienced a cyber attack over the last 12 months, although the proportion of those impacted had reduced among small charities.

Charity Commission chief executive Helen Stephenson added: “Our guidance stresses the risks involved in the use of crypto currency and advises trustees to exercise caution.”

Share Story: