Charities face attacks from “bad actors” using increasingly complex methods, the Charity Commission has warned.
Structural vulnerabilities in the regulation of some charity services and overlaps between different regulators are being exploited, according to a new report by the regulator.
The Charity Commission’s second annual Charity Sector Risk Assessment highlights a sustained increase in concerns raised about charitable status being abused for private benefit, with a 29% increase in 2025-26 (374 cases) following a 38% increase in 2024-25 (291 cases, up from 211 in 2023-24).
The Commission reports an increase in “particularly complex case work”, often involving charities operating in fields where there are multiple regulators, or where the boundaries of regulatory remits are not clearly drawn.
“The vast majority of charities are well run, making a positive difference to lives and communities every day”, said Paul Latham, director of communication and policy at the Charity Commission.
“However, our assessment highlights the growing scale and complexity of risks they face, including from those seeking to exploit charity status for personal benefit, and from a lack of regulatory clarity which potentially leaves service users exposed to poor services or harm.
“While proportionally relatively few charities are directly affected by such threats, their impact can be significant, for the individual charities, the Commission’s resources, and public trust and confidence in charities.”
The growing complexity has seen the charity regulator formally pass information to other agencies – including HRMC, the police, and local authorities – 500 times in the last year, up 8% on the previous 12 months.
Similarly, while the quality of some charities’ services is clearly regulated – such as educational charities regulated by Ofsted and care services regulated by Care Quality Commission – the Commission warns that some charities provide sensitive services to vulnerable groups in areas that do not have subject-expert regulation, including charities providing out of school settings and certain housing services.
In some cases, the regulator is concerned that users may have little opportunity for redress if the quality of the services they receive is inadequate.
Latham explained: “We have taken action in specific cases where we can, while also alerting and ensuring relevant government departments and other responsible bodies are aware of these gaps. We will continue working with our partners in government and across the sector to find shared solutions.”
The Commission urges trustees to undertake sufficient due diligence before entering new service delivery arrangements and to look at best practice in their field. The regulator has carried out a risk assessment which draws on a range of sources, including charity accounts and trustee annual reports, reports of serious incidents, and intelligence referrals from other agencies, with the aim of helping trustees to undertake their own assessments and put risk-avoidance plans in place.
“Overall, our review of the risks facing the sector underlines the huge contribution that voluntary trustees, who carry ultimate responsibility for charities, make to our society and communities”, Latham said. “Their role is often complex and demanding, but they provide society with a great, and often underappreciated, service.”
