Most charities do not have policies and procedures in place in areas such as financial reporting and reporting serious incidents, a study is claiming

The warning has emerged following research based on analysis of more than 151,000 registered charities carried out by financial firm Sorbus.

This is suggesting that three in four charities do not have policies and procedures around financial reserves and controls, risk management, serious incident reporting and concerning trustee conflicts of interest and expenses.

However, the Charity Commission points out that many of these charities looked at are not required to submit such information, so it would be incorrect to assume that the proportion stated by Sorbus involves missing data or a failure on their part to adhere to charity regulation.

The regulator also points out that only around 100,000 charities are required to submit such information.

Sorbus claims more than half of the charities looked at do not have policies in place on managing financial reserves and just under three in five do not have them for internal risk management, managing trustee conflicts of interest and serious incident reporting.

Meanwhile, more than three in five do not have policies in place around trustee expenses and just under half do have them in place for internal financial controls.

Charities working with vulnerable people are also advised to have safeguarding policies and procedures in place.

Sorbus' study claims that three in ten charities working with children, older people and those with disabilities do not have a safeguarding policy “exposing these groups to unacceptable risks”.

The firm is calling on charities to ensure they have robust governance arrangements in place.

“Failure to implement proper governance not only limits a charity's impact but can also expose it, and its trustees, to serious legal, financial, and reputational risks," it says.

It warns that already “high profile governance scandals have severely damaged the reputation of individual charities, their founders and the broader charitable sector”.

It points out that since January 2024 the Charity Commission has published 28 statutory inquiries into charities, with one or more trustees disqualified in 16 of these. In ten cases charities were removed from the register.

Sorbus specifically highlights the example of Captain Tom’s Foundation, the charity set up in the name of pandemic fundraiser the late Captain Tom Moore by his daughter and son-in-law.

The Charity Commission said last year that the charity’s former trustee and chief executive Hannah Ingram-Moore, and her husband and former trustee Colin Ingram-Moore had a “pattern of behaviour, which saw them “repeatedly benefitting personally” from the Foundation.

This included direct and indirect benefit from the couple’s private companies’ links to the late record-breaking fundraiser’s charity.

Earlier this month the first major revision of the Charity Governance Code was published. This included a greater focus on ensuring trustees promote inclusivity.

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