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Charity Sector Risk Assessment | What trustees need to know 2026
01 Sep 2026
The Charity Commission has published its second annual Charity Sector Risk Assessment, drawing on thousands of accounts, hundreds of compliance investigations and thousands of serious incident reports. It sets out the pressures the sector is under and the risks trustees should be watching for. This update walks through the key findings and what they mean in practice.
1. Financial Resilience
Charities collectively spent £100 billion in 2024 and brought in £102 billion, both up by around 5.5% on the year before. That’s the first time in three years that income growth has kept pace with spending, and the sector-level margin grew from £700 million to £1 billion. Smaller charities are still feeling the squeeze hardest.
41% of charities had expenditure that exceeded income in 2024, and a quarter of charities with income under £10,000 only just broke even.
The Commission also flagged a 27.7% rise in casework linked to insolvency and financial difficulty (235 cases, up from 184), and a 36% jump in charities voluntarily removing themselves from the register because they’re no longer functioning. Government contracts and grants to the sector both grew, but larger charities remain far more likely to win them than smaller ones.
What trustees can do
- Plan the year ahead with income forecasts aligned to operating costs
- Make sure financial reporting is regular and detailed enough to support decision-making
- Review forecasts often enough to catch variances early
- Consider joint ventures, collaborative bids or shared back-office functions where they’d help
2. Risks to Public Benefit
A charity must operate for the public benefit, not for the private benefit of those associated with it. Most charities are run without any issues arising, but the Commission has seen a sustained rise in cases where charitable status is being deliberately abused.
Individuals: private benefit and fraud
Cases involving charitable status being abused for private benefit have nearly doubled in two years, rising from 211 in 2023-24 to 374 in 2025-26. Two drivers stand out: AI-assisted registration applications making it easier for bad actors to apply (fewer than half of all applications are now approved), and the use of less transparent payment methods such as vouchers and money service businesses.
Less than 45% of applications for charitable status were approved by the Commission in the past year, reflecting the scrutiny now applied at registration.
Structural vulnerabilities: regulatory gaps
The Commission regulates charity governance, but not always the quality of the services charities deliver. Where there’s no sector-specific regulator, or that regulator lacks powers or resources, beneficiaries can be left exposed and bad actors can exploit the gap.
Social housing
Several statutory inquiries are open into supported housing charities, covering around 5,000 properties. One Merseyside case, involving over 250 properties, has been referred to the Serious Fraud Office.
Care services
The Commission oversees governance and safeguarding for charities providing care, mental health advice and helplines, but not the quality of specialist care itself, leaving limited routes for redress if standards fall short.
Out-of-school settings
Some independent schools run by charities are evading Department for Education registration by claiming to be part-time. The Commission also sees non-charitable organisations, including CICs, being mistaken for charities.
What trustees can do
- Ensure no single person can access charity funds or assets without oversight
- Review financial and asset transactions regularly, including bank payments
- Check any payments to trustees are lawful, recorded and properly approved
- Know your charity’s purposes and how each one delivers public benefit
- Understand which other regulators oversee your area of service delivery
3. Governance and Safeguarding
Governance
Cases about poor trustee decision-making fell by a third in 2024-25 (313 cases, down from 458). Disputes within charities rose sharply, however, up 57% to 909 cases, often involving trustee elections, financial transparency or property. The Commission links this partly to financial pressure and wider social tension. Many charities also continue to find it hard to
recruit enough trustees.
Safeguarding
Around a quarter of all concerns raised with the Commission relate to safeguarding. This year’s casework has highlighted the need for particular care in handling allegations involving individuals in positions of trust or influence, including spiritual leadership. Safeguarding duties extend beyond beneficiaries to volunteers and staff, and any incident must be referred to the relevant agency for investigation.
4. Social Tensions and the Wider Environment
Charities have always operated in contested policy debates, but some are now facing sustained hostility rather than ordinary challenge and criticism. Charities supporting refugees, young people, homeless people and faith communities have reported security threats, intimidation and online disinformation, diverting time and resources from their
charitable purpose.
The past year saw distressing antisemitic attacks on Jewish charities, including the violent attack at Heaton Park Synagogue in October, alongside reports of threats against mosques and other places of worship.
The Commission says it will support trustees who make good-faith decisions in response to this environment, including on security spending and office relocations, and will continue to back charities’ right to campaign and engage in political activity where it supports their purpose and is in their best interests.
5. Charities Operating Overseas and Geopolitical Risk
Charities operating overseas
Charities working internationally, particularly in the Middle East, are reporting increased risk to staff and greater financial sensitivity to global events and to decisions on overseas development budgets. Some organisations report an escalation in violence against humanitarian workers, both in the Middle East and elsewhere.
Geopolitical turbulence and hostile foreign states
The Commission is progressing casework connected to the Israel-Hamas conflict, most commonly involving allegations of support for Hamas or antisemitic speech, and has opened a class inquiry into charities operating in illegal Israeli settlements in Palestine. It’s also tracking concerns about Iranian influence in the sector. During 2025-26, the Commission’s terrorism and state-threats team made 656 disclosures to police and other agencies, issued 7 disqualification orders and 29 official warnings. The Commission is working with government on new powers under the Protecting What Matters strategy, including trustee ID verification, digitised accounts, and stronger powers to suspend trustees or shut down charities involved in extremism.
6. Emerging Technology and Cyber Risk
Digital technology and AI can bring real efficiencies for charities, but cyber risk is rising alongside the opportunity.
30%
of charities reported experiencing a cyber attack in the past year, with phishing the most common and disruptive type, and ransomware attacks on the rise.
Trustees remain responsible for the safeguards, oversight and risk management around any use of AI in their charity, even where it’s helping with efficiency, accessibility or impact.
Relevant Commission guidance
- Safeguarding and protecting people for charities and trustees
- Protect your charity from fraud
- Protect your charity from cyber crime
- Charities: due diligence, monitoring and verifying the end use of charitable funds
- Risk management and decision making
This update summarises the Charity Commission for England and Wales’ Charity Sector Risk Assessment 2026. It is not a substitute for the full report, which trustees are encouraged to read alongside their own charity’s risk register.
