Looking ahead to key risks for charities in 2023
Over the past few years, the charity sector has faced a number of challenges, including the global pandemic, economic instability and political uncertainty. Each of these challenges have caused disrupted operations and stretched resources, as many charities have struggled to keep up with the changing market conditions. In a bid to ensure the future stability of charities across the country, we have looked ahead to key risk for charities in the coming year.
Keep reading for our advice on charities and risk management in 2023.
We predict the key risks will be…
Risk One: Decreased Funding
The cost-of-living crisis is currently being reported as one of the most severe economic threats, and will undoubtedly cause long-term damage to the charity sector.
The economic uncertainty caused by the cost-of-living crisis means that the funding your charity receives will almost certainly plummet, as everyday people become unable to donate and the government becomes unwilling to invest. A decrease in public funding has already been noted in previous years, as the public has grown more sceptical of giving their money away to charities due to concerns about how their donations are used. Not only has this damaged the trust and reputation of those in the charity sector, but a decrease in public support only confirms the idea that funding for the sector is likely to plummet.
Risk Two: Increased Competition
A further concern the charity sector faces is an increase in competition. Due to the rapid rate that charities are being established, there has been a knock-on effect of higher competition for funding, resulting in more charities struggling to secure funding to meet their organisational objectives. This is expected to be a particularly challenging year for smaller organisations, who will have to compete with the larger brands for public support.
Risk Three: Digital technology
Digital technology is affecting many industries both positively and negatively, and charity is no exception. Whilst it has undoubtedly transformed the way charity organisations operate, with online donations and virtual events, it has also brought a whole host of new risks to the sector. Just last year, the Charity Commission revealed that one in eight charities had experienced a cyber-attack in the last 12 months. As digital technology continues to advance, it is expected that this number will rise in the coming year. With the potential to compromise services, funds and data, it is important your charity remains vigilant to these risks.
