Reputational Risk of Charities

In our latest blog, Charities Manager, Jenna Fair, looks at reputational risk for charities and how you should be preparing to protect your charity:

Has your charity considered reputational risk?  Is it on your risk register? Do you have a plan of action in case something happens?

The circumstances which could give rise to negative publicity and reputational damage will depend on what your charity does, but it can have a serious impact on any charity and its relationship with beneficiaries, donors, funders, volunteers and staff.

Being prepared, starts with understanding the factors that could give rise to a risk. Charities should not only consider the risk factors but also the likelihood of the situation occurring and the impact it would have.  This allows you to focus on risks with high likelihood and impact rather than those with low likelihood and impact.

Once you understand the potential risks you can consider what can be done to mitigate them and also what you would do if they happened. Documenting all of this, reviewing it periodically and updating it for changes is also important.

It won’t always be possible to prevent problematic situations from arising but the way you respond to the situation will be key in managing the reputational risk.  Communication will be key (and in some cases may be a legal requirement) and should help to ensure that misinformation does not exacerbate the problem. Reputation, accountability and transparency are interlinked, and trying to suppress information or make it difficult to access may be seen as misleading.

As always, the key is to be prepared.  When challenging situations arise, prior consideration and planning will enable management and Trustees to make informed decisions quickly, ensuring maximum damage limitation and proper discharge of responsibilities.

This blog is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not be used as a substitute for taking professional advice in any specific situation. Wylie & Bisset LLP (and its subsidiary Wylie & Bisset (Audit) Limited) will accept no responsibility for any actions taken or not taken on the basis of this blog. If you would like further advice or would like to discuss any of the issues raised in the blog then please get in touch with your regular Wylie & Bisset contact or use the contact form on our website.

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