New research by Charity Finance Group (CFG) and The Risk Collaborative (TRC) provides one of the clearest pictures to date of how charities across England and Wales are managing risk in practice.
Working alongside the Charity Commission to support their refresh of the regulator’s risk management guidance (CC26), the research report – Rethinking Risk: Recommendations for a CC26 refresh – comes at a pivotal time in the update of the guidance.
The report’s publication comes one year on from when the Commission’s CEO David Holdsworth announced a refresh of the guidance at CFG’s Annual Conference 2025.
Earlier this year, 309 charity leaders and risk management experts responded to a survey on risk management, and more than 45 charity leaders took part in a series of roundtables.
The findings revealed that charities are actively managing risk – often ‘as a habit of mind’, as one charity leader described it – and in ways that reflect their size, purpose and context.
From compliance tool to decision-making aid
The research found that, like a lot of risk guidance and programmes, CC26 has been more influential on producing outputs like risk registers and less on improving the quality of decision-making.
Just over half (55%) of those respondents who said they use a risk register said its role in decision-making is limited, stating that decisions are made through a separate process that rarely references what’s on the register.
To reflect the diverse approaches and needs of the charity sector, and to ensure the refreshed guidance is practically accessible for all charities, the report’s authors recommend that refreshed risk management guidance serves as an aid to decision-making. They also recommend adopting a more modern definition of risk.
The authors point out that the refreshed CC26 guidance must be made more visible and useable, so that every charity can explore their own unique risk profile, regardless of their size.
Raising awareness around funder relationships and risk approaches
The authors recommend the new CC26 guidance should include the concept of ‘risk sharing’ between funders and recipient organisations.
More than three-quarters (76%) of grant-funded respondents report that funder risk requirements are increasing, yet less than half (49%) report having regular and constructive conversations with funders about risk thresholds and approaches.
The authors highlight how the funder relationship can present a structural barrier to genuine risk management. During the research, one CEO wrote: ‘The fear of failure from larger grant-awarding bodies is distorting their risk appetite such that it is negatively impacting the sector.’
Caron Bradshaw OBE, Growth and Sector Solutions Lead at CFG and co-author of the report, comments:
“As a sector, we are navigating increasing demand, tighter funding and greater complexity. In that context, supporting trustees and leaders to understand and respond to risk effectively is more important than ever.
“The Charity Commission’s refresh of CC26 is a valuable opportunity to ensure guidance reflects the realities charities are facing and supports confident, well-informed decision-making.
“What came through clearly in our research is that the mindset of charity leaders is paramount and tools such as heatmaps and risk registers play a supporting role in decision-making. We would like to see CC26 repositioned so that it supports a practical shift towards maximising opportunity, not just minimising harm.
“CFG was pleased to be asked to convene this work, in partnership with The Risk Collaborative, by the Charity Commission. By bringing together voices from across the sector, we see this as the start of an ongoing conversation about what good risk management looks like in practice, and how we can continue to support charities with practical tools, insight and guidance to navigate uncertainty.”
Nigel Kippax, the report’s co-author, and charity governance and risk expert, adds:
“We believe that revised sector guidance can help charity leaders to be more confident in taking bold decisions, thereby seizing opportunities and realising the potential of their charities to deliver social impact.”
Sabrina Segal, Director of The Risk Collaborative and the report’s lead author, comments:
“We are delighted to have had this opportunity to help shape and support the important refresh of CC26. We were thrilled that so many charity sector leaders and experts engaged with the research, and we thank them for sharing their time and energy with us.
“Between them, they confirmed what we already suspected – that risk management is already an important, daily part of what they do and how they think. They also showed us that risk complexity varies hugely by context and that it’s not just about the organisation’s size or income.
“This diversity is the right starting point when thinking about how risk management guidance can be refreshed in a way that makes it accessible and relevant for all. It also informs the future development of new risk management decision-making guidance and frameworks.
“Time and again, charity leaders told us that they want support that allows them to ‘choose their own adventure’ and that guidance should provide a flexible framework, rather than a list of hard and fast tools and approaches.
“We hope that the findings and recommendations in this report not only help to inform the Commission’s work of refreshing CC26, but will serve as a catalyst for richer conversations on risk management and best practice in the charity sector.”
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Media contacts:
Emma Abbott, Head of Communications and Content, CFG
Glyn Sheldon, Communications Coordinator, CFG
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