The Charity Commission has published its Charity Sector Risk Assessment 2026, highlighting the key risks currently facing charities across England and Wales. Whilst many of the themes will be familiar to trustees, the report provides a useful insight into the issues attracting increasing regulatory attention.
At Hazlewoods, our charities specialists have reviewed the assessment and set out below the key themes we believe trustees should be focusing on.
Financial resilience remains a key challenge
Whilst the Commission reports that overall charity income has increased, many organisations continue to face financial pressures, particularly smaller charities operating with limited reserves and tighter margins. The regulator has also seen an increase in cases involving financial difficulties and insolvency. It is the Trustees duty to manage the charity’s resources responsibly, and some of the cases highlighted by the commission include criticism of the Trustees for not being robust enough in their forecasting and assessment of the charity’s position.
Our view: Trustees should continue to prioritise financial forecasting, cashflow management and reserve planning. The organisations best placed to navigate uncertainty are typically those with timely management information and a clear understanding of their future funding requirements.
Governance remains firmly in the spotlight
The Commission continues to see an increase in cases involving concerns over private benefit, conflicts of interest and the misuse of charitable structures. It has made it clear that trustees must be able to demonstrate that charitable resources are being applied for public benefit and that robust governance arrangements remain central to protecting charitable assets and maintaining public trust.
Our view: Charities should take the opportunity to review their governance arrangements, ensuring conflicts are appropriately declared, trustee decisions are well documented and financial controls remain fit for purpose. Good governance is often the first line of defence against a wide range of risks. Regular oversight of transactions and clear records of key decisions can also help demonstrate that a charity’s resources are being used in furtherance of its charitable purposes.
Fraud risks continue to evolve
The assessment highlights growing concerns around fraud, financial crime and increasingly complex investigations involving multiple agencies. The Commission also references the wider rise in fraud and cybercrime risks affecting organisations across the UK.
Our view: Fraud prevention should not be viewed solely as a concern for larger charities. Trustees of organisations of all sizes should regularly review internal controls, payment authorisation processes and cyber security arrangements to ensure they remain effective.
Safeguarding must remain a priority
Safeguarding continues to be a significant area of focus for the Commission, with concerns regularly arising through both serious incident reporting and regulatory casework. The report emphasises the importance of protecting not only beneficiaries, but also staff and volunteers.
Our view: Effective safeguarding goes beyond having a policy in place. Trustees should ensure safeguarding responsibilities are embedded within the charity’s culture, governance framework and decision-making processes.
What should trustees do now?
Many of the risks identified within the assessment are not new. However, the report serves as a timely reminder of the issues that continue to create challenges across the sector and attract regulatory scrutiny.
Trustees may wish to use the publication as an opportunity to revisit their risk register, challenge existing assumptions and consider whether current controls remain appropriate for their charity’s activities and risk profile.
Further useful resources include the Charity Governance Code, which was refreshed in 2025 and sets out eight universal principles of governance for charities to consider, and the Charity Commission 5-minute guides for Trustees.
How can we help?
Reviewing risks regularly is an important part of effective charity governance. If you would like to discuss any of the themes raised in the Charity Sector Risk Assessment 2026, or would like support reviewing your charity’s governance, financial resilience or risk management framework, please get in touch with your usual Hazlewoods contact or a member of our Charities team.
For more information on how we can help, head over to our Charities page.
