Navigating change: Risks and roadmaps for charities in 2025

It is no exaggeration to say that charities in England and Wales are operating in among the most testing environments in recent memory. The Charity Commission’s recently published Charity Sector Risk Assessment 2025 pulls back the curtain on the pressures, threats and emerging challenges the sector faces, and issues a call to action for more proactive governance, resilience planning and clarity of purpose.

Financial resilience under strain

The Commission warns that financial health is deteriorating across the sector. Nearly half of charities reported spending more than they received in 2023, while the number of cases involving financial distress has almost doubled. Rising costs, falling real-terms income from government contracts, and increasing demand for services mean that many organisations are drawing down reserves faster than they can replace them.

For trustees, this underlines the importance of strong financial management, robust forecasting, and clear plans for sustainability.

Protecting public benefit and reputation

The second spotlight risk relates to charities delivering their public benefit. The Commission has seen a rise in cases of private benefit, sham applications, and governance weaknesses — particularly among small boards with limited checks and balances. Misuse, whether intentional or accidental, undermines trust not just in individual organisations but across the sector.

Other emerging challenges

Beyond these two headline risks, the report also highlights fraud, safeguarding, social tensions and technological change as areas that demand trustee attention.

What this means for charities

The message is clear: charities must act now to strengthen their resilience. Boards should ensure they have the right skills around the table, stress-test their finances, and review risk registers regularly. Above all, transparency and good governance remain central to maintaining public trust.

Speak to our charity team

At Bishop Fleming, we work with charities of all sizes to strengthen governance, manage risks and plan sustainably. If you would like to discuss the implications of the Commission’s risk assessment for your organisation, please get in touch with our charity team.