Charity Commission urges charities to act on early warnings

The Charity Commission’s annual updates over the summer have highlighted an area of growing risk for charities. 

Its annual report and accounts in July highlighted the increasing demands on the Commission’s resources, with some response times dropping. Notably, the Commission was only able to respond to requests for permission or advice by charities within 30 working days in 80% of cases, down from 86% in the previous year. 

In the Commission’s Charity Sector Risk Assessment 2026, it identified financial resilience as the main risk for the sector, and urged trustees to plan ahead - and to identify and act on early warning indicators. 

When charities run into financial difficulties, we are seeing the Commission increasingly willing to scrutinise decisions trustees took when the problems first arose. 

In particular, with limited resources at its disposal, the Commission is taking a harder line on urgent requests for regulatory support, for instance to authorise a merger where a charity is in financial distress. The regulator is increasingly expecting the charity to have considered whether Commission authority is needed at all, or whether there are alternatives. For instance, it might expect a board to explore appointing additional unconflicted trustees if it is facing a conflict of issue problem, rather than asking the Commission to authorise the conflict. 

And if the trustees do conclude that they need the Commission's help, it expects them to engage with it as early as possible. The Commission seems prepared to consider a failure to act in a timely way as a potential indicator of mismanagement. 

The message for charities facing financial difficulties is clear – take professional advice at an early stage, make sure you can demonstrate good decision-making which reflects the Commission’s guidance, and engage with the regulator as soon as it is apparent that its help is needed.