Governance risks
• inappropriate organisational structure
• trustee body lacks relevant skills or commitment
• conflicts of interest
Examples
Control
The David Hill Charitable Trust (DHCT) is a small charity which has general aims. The Trustees are family members who uphold high moral standards. The size of the charity and personal knowledge and integrity of the family members means that the Trustees will always consider their actions to ensure that they benefit the charity and its objectives.
Operational risks
Examples
• lack of beneficiary welfare or safety
• poor contract pricing
• poor staff recruitment and training
• doubt about security of assets
Control
The charity does not intervene directly in activities but makes grants and other money available. The Trustees use their judgement to ensure that the grants are appropriate and beneficial and consider any potential negative results from such a grant before making the donation
Financial risks
Examples
• inaccurate and/or insufficient financial information
• inadequate reserves and cash flow
• dependency on limited income sources
• inadequate investment management policies
• insufficient insurance cover
Control
The charity only makes donations from cash held in the bank account. It does not borrow.
External risks
Examples
• poor public perception and reputation
• demographic changes such as an increase in the size of beneficiary group
• turbulent economic or political environment
• changing government policy
Control
The charity does not seek an external presence acting quietly.
Beneficiaries are chosen on a case by case basis from time to time with no ongoing commitment which means that the Charity can respond to changing circumstances appropriately
Compliance with law and regulation
Examples
• acting in breach of trust
• poor knowledge of the legal responsibilities of an employer
• poor knowledge of regulatory requirements of particular activities (eg fund-raising, running of care facilities, operating vehicles)
Control
The integrity and moral compass of the Trustees prevents acting against the best interests of the charity.
There are no employees so there is no employment risk. The activities of the charity are purely donations and therefore there are no direct health and safety or other physical activity risks.
Beneficiaries are chosen on a case by case basis from time to time with no ongoing commitment which means that the Charity can respond to changing circumstances appropriately
David Hill, Trustee
December 2019