Protect your charity from financial risk
Ensuring proper financial security is critical function for your charity. In fact, a recent report conducted by the Charity Commission revealed that almost 70 per cent of charities identified fraud as a major organisational risk. And rightly so—fraud is estimated to cost the sector nearly £1.3 billion every year.
The report also identified the following as the most common forms of charity fraud in the past two years:
- Mandate or CEO fraud (18 per cent)
- Abuse of position (12 per cent)
- Cash theft (11 per cent)
Although 85 per cent of charities think they are doing everything they can to prevent fraud, almost half don’t actually have any fraud protection measures in place.
Don't put your charity at risk. Consider these tips to limit your fraud risks:
- Prevent internal issues—Manage internal fraud concerns by requesting background checks for all new employees and volunteers. In addition, be sure to implement a whistleblowing policy that encourages staff to report suspicious behaviour. Make sure you stay on top of internal security.
- Prioritise cyber-security—Provide staff with routine training on how to recognise and mitigate cyber threats (eg phishing). Have a cyber incident response plan in place to limit the impact of a cyberattack.
- Maintain proper cash management—Restrict access to your charity’s finances with proper security measures (e.g. key card access points, CCTV and alarm systems). Conduct regular cash audits. Have robust sign-off procedures in place to countersign financial transactions.
Make sure your charity has the right insurance cover in place. It's not just about protecting people and property—in this day and age, cybersecurity is an increasing consideration.
For solutions to protect your charity against fraud, get in touch with our specialist care and charity insurance team on 01625 348029. We can talk you through the different insurance covers available to help counteract cybercrime and financial crime in your charity.