Survey Shows Many Charities Struggling To Cope

29th September 2004

29 September 2004: The issue of reduced income is the overwhelming concern for charities in the coming year, according to "Managing risk - reducing your risk exposure" - the third annual survey of senior managers and charity trustees in the UK, by PKF accountants and business advisors and the Charity Finance Directors' Group (CFDG).

Regulatory or funder requirements, changes in government policy, pension issues and insurance issues are also causing great concern, with two thirds of respondents worried about the Charities Bill and new SORP.

The survey found that risk management is in place to some degree for 97% of charities, up marginally from 95% last year. 31% of respondents either always refer to risk management results in making decisions or use risk management as an integral part of day to day activities. This is a slight increase from 29% last year.

Worryingly, one in ten charities are facing at least one major risk that they have little or no control over.

The 2004 survey was carried out in May and June 2004 and, like the 2002 and 2003 surveys, charities from across the UK were questioned (308 in total), giving a broad cross section of views on the risks facing the sector and how risk management is operating.

Charles Cox, partner and head of charities at PKF, said: "There are significant changes taking place in the sector at present with the Charities Bill, Standard Information Return, changes to accounting and Gift Aid rules, and increases in pension costs. The results to the survey suggest that charities are struggling to cope.
"The benefit that charities are getting from risk management has continued to increase with over 97% of charities having some form of risk management in place and more than 95% of charities feeling they are getting at least some benefit from it. It does seem, however, that although charities are good at identifying the threats to them, they are less effective at addressing them."

Highlights from this year's risk management survey:
· Almost 75% of respondents see staffing and skills as a significant risk to their organisation.
· Reduced income, particularly fundraising income and specific grants, is seen as a significant risk by almost 80% of respondents.
· 50% of respondents identified strategic direction as a significant risk to their organisation.
· IT failure is seen as a significant risk by over 70% of respondents. 15% have no up-to-date anti-virus software, 30% have no up-to-date firewall and 10% do not make regular backups of their data.
· 73% of respondents identified reputation as a significant risk to their organisation.
· 37% identified ineffective management as a significant risk to their organisation.
· Two thirds of respondents identified fire/flood or major incident as a significant risk to their organisation. However 18% of these did not have insurance against these risks.
· The risks facing most organisations are broadly similar with 65% of organisations facing the same major risks and 90% having two or fewer changes in risks.
· More than 10% of respondents had at least one major risk over which they had little or no control.

For copies of the 2004 PKF charities risk survey please contact Janette O'Byrne on 020 7065 0318 or email janette.obyrne@uk.pkf.com or download a PDF copy - download (1.5MB)

-Ends-

Further information:

Imelda Michalczyk, PR Manager Tel: 0207 065 0141
Frances Dukeson, PR Assistant Tel: 0207 065 0376

Notes to Editors:

1. PKF is one of the UK's leading firms of accountants and business advisors and specialises in advising the management of developing private and public businesses. The firm has more than 1,500 partners and staff operating in 25 offices around the country. Principal services include assurance and advisory; consultancy; corporate finance; corporate recovery and insolvency; forensic; and taxation. The firm has particular expertise in advising sectors such as small and medium-sized companies; charities; hotels and leisure; medical; professional partnerships; public sector; and technology. The firm's web site is .

2. PKF also offers financial services through its FSA authorised company, PKF Financial Planning Limited.

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