Charity Commission report: what is the risk landscape in 2026?

The risk assessment is intended as a high-level sector overview rather than a checklist for individual charities. The Commission emphasises that risks will vary according to a charity’s size, activities and circumstances, and encourages trustees to reflect the findings in their own risk registers.

If you work with charities, or serve as a trustee, the assessment provides a useful prompt to revisit financial controls, forecasting, governance and risk management. It also shows how some risks identified in the Commission’s 2025 assessment have developed.

Financial resilience remains one of the Commission’s two headline risks. The latest annual-return data, for financial years ending in 2024, shows that charity income rose by 5.6% to £102bn, while expenditure rose by 5.4% to £100bn. The sector-level margin was an improvement on 2023 but remained below pre-pandemic levels. 41% of charities reported expenditure exceeding income. This represents a small improvement from the position described in the 2025 assessment, when nearly 43% of charities reported expenditure exceeding income.

However, the 2026 report gives greater emphasis to signs of financial fragility emerging through regulatory casework. Cases relating to insolvency and financial difficulties increased by 28% between October 2024 and September 2025, while voluntary removals from the register increased by 36%.

For trustees and their advisers, the message is therefore not simply that sector finances have improved. Forecasting, liquidity and reserves remain important, particularly where income is dependent on grants, government contracts or discretionary giving. The Commission notes concerns about contracts being delivered within fixed budgets and without full cost recovery, alongside changes in donor behaviour. It recommends regular, sufficiently detailed financial reporting, forecasts that are actively updated and early action where income or expenditure begins to diverge from expectations.

The other headline risk is the abuse of charitable status for private benefit. This has become more prominent since the 2025 assessment. Cases concerning potential abuse increased by 38% in 2024-25 and by a further 29% in 2025-26, reaching 374 cases. The Commission identifies new technology, including AI-assisted registration applications, and less transparent financial transaction methods as factors contributing to the risk.

The practical implications for charities include maintaining appropriate segregation of duties, reviewing transactions and ensuring that conflicts of interest are properly managed and any trustee payments are authorised and documented. These are familiar areas of good financial governance, but the latest figures underline the importance of demonstrating that controls operate in practice.

The 2026 assessment also introduces a stronger focus on structural vulnerabilities. The Commission highlights situations where charities operate alongside other regulatory regimes, or where no effective sector-specific regulator exists. Supported housing, care services and some out-of-school settings are particular areas of concern. The Commission also reports almost 500 disclosures to external agencies during 2025-26, an 8% increase on the previous year, in connection with complex casework including allegations of significant fraud.

Governance trends are mixed. Cases concerning trustee decision-making or breaches of Commission guidance fell by 32% in 2024-25. However, disputes within charities rose by 57%, and the Commission continues to identify difficulties in recruiting sufficient trustees. This reinforces the value of clear decision-making processes, appropriate financial information for boards and constructive challenge within trustee meetings.

The 2026 assessment expands the range of issues that trustees may need to consider. Safeguarding remains a significant issue, with around a quarter of concerns raised with the Commission relating to safeguarding. The report particularly highlights allegations involving people in positions of power or influence.

Social tensions, geopolitical turbulence and hostile foreign-state activity also receive greater prominence than in the previous year. Some charities report being diverted from their charitable purposes by security threats, intimidation, online misinformation and hostility. Charities working overseas may face heightened safeguarding and financial risks, while the Commission says it has live inquiries and compliance cases concerning potential foreign-state influence.

Cyber risk has also become more concrete. The Commission reports that 30% of charities experienced a cyber-attack in the past year, with phishing the most common form, alongside an increase in ransomware. AI offers potential efficiency benefits, but trustees remain responsible for appropriate safeguards, oversight and risk management.

Overall, the 2026 assessment is less a change of direction than an expansion and deepening of the Commission’s 2025 picture. Financial resilience and public benefit remain at its core, but the latest evidence points to increasing complexity around fraud, regulation, technology, social tensions and geopolitics.