The Charity Commission has issued new guidance calling on charities to check their financial controls protect against risks, including those from newer technology such as cryptoasset.
The updated guidance – known as CC8 – explains the role strong internal financial controls play in ensuring trustees can safeguard their charity’s resources.
The Charity Commission said the restructured guidance is clearer and more concise, covering issues that were not in existence or widely relevant to the sector when first drafted.
The guidance also includes an updated checklist to help the charity sector – which generates an income of £80 billion a year in England and Wales – put it into practice.
This comes as the Department for Science, Innovation and Technology last week published research which found 24% of charities experienced a cyberattack in the last 12 months.
New sections of the regulator’s guidance cover issues including using mobile payments systems – such as Google Pay and Apple Pay – and considering donations of cryptoassets, such as cryptocurrency and NFTs.
Risks from cryptoassets highlighted include vulnerability to theft by hackers; potential sudden changes in value; difficulty in tracing donors; and a lack of protection from agencies such as the Financial Services Compensation Scheme (FSCS) or the Financial Conduct Authority (FCA) if something goes wrong.
The regulator has also refreshed existing advice on more traditional risks, such as when fundraising and holding public collections; making payments to related parties; and operating internationally; and added a section on accepting hospitality.
Sam Jackson, Assistant Director of Policy at the Charity Commission said:
“As more and more charities move to operate online and newer technologies are developed, such as the use of cryptocurrencies, trustees will need to navigate risks that might not have been previously considered. We have updated our guidance to reflect the digital age we all live in and worked hard to ensure it is clear and simple to use.
We know there are many internal and external risks to consider which is why we have also updated our helpful checklist so that trustees can have informed discussions about the measures they need in order to best protect their charity’s assets and donations entrusted to them by the public.”
