Risk Management for Charities: Creating an Effective Risk Register
Are you a charity trustee concerned about potential threats to your organization's mission? A well-structured risk register could be the strategic tool you need to safeguard your charity's future.
Why Your Charity Needs a Risk Register
Risk management isn't just good practice—it's essential for charity sustainability. A properly maintained risk register allows you to:
- Proactively identify and address potential threats before they escalate
- Meet legal requirements set by the Charity Commission
- Protect your organization's reputation and financial stability
- Make informed strategic decisions based on a clear understanding of your risk landscape
The Charity Commission mandates that all UK charities, regardless of size, regularly review and assess risks they face. Trustees must demonstrate a comprehensive approach to risk management covering all aspects of their charity's work and organizational culture.
Key Elements of an Effective Risk Register
A comprehensive risk register includes:
1. Risk Identification - Categorizing potential risks (strategic, financial, operational, reputational, legal/compliance, governance, IT/cyber, and people-related)
2. Risk Analysis - Assessing likelihood and potential impact
3. Risk Evaluation - Prioritizing risks based on severity
4. Risk Mitigation - Documenting specific actions to manage identified risks
5. Risk Ownership - Assigning responsibility for monitoring each risk
6. Regular Review - Ensuring the register remains current and relevant
Creating Your Charity's Risk Register: A Step-by-Step Approach
Start building your risk register with these practical steps:
1. Define your Risk Policy - Determine your charity's risk appetite and tolerance levels
2. Identify all potential Risks** - Consider every aspect of your operations and activities
3. Assess each Risk - Evaluate likelihood and potential impact
4. Plan appropriate Responses - Decide whether to avoid, mitigate, transfer, or accept each risk
5. Assign clear Ownership - Designate responsibility for monitoring and managing each risk
6. Establish regular review procedures - Treat your risk register as a living document
Maintaining Your Risk Register for Long-Term Success
A risk register isn't a one-time document but a strategic tool that requires regular attention. By making risk assessment part of your regular governance routine, you'll ensure your charity remains resilient in the face of challenges.
Your risk register should also inform insurance decisions, helping you secure appropriate coverage for significant risks your organization faces.
With a well-maintained risk register, your charity will be better equipped to navigate uncertainties and focus on what matters most—fulfilling your mission and making a positive impact.
To find our more read our Charity Risk Management whitepaper here, or start your free trial of Governance360, including our inbuilt risk register tool here.
