SALAMAT Charity Organisation
Risk Management Measures
Risk is the uncertainty surrounding events and their outcomes that may have a significant impact, either enhancing or inhibiting a charity from achieving its charitable purposes. It should be considered within the wider environment in which the charity operates; financial climate, society and its attitudes, the natural environment and changes in the law, technology and knowledge. It may help to categories risks, for example as:
Understanding how small charities identify, assess and mitigate risks can make a real difference to their longevity and sustainability as it highlights the extent to which different types of risk are dealt with in these organizations.
Recent report by L Weymouth find that Small charities are ‘sleepwalking’ into a risk management crisis. According to this research, which was undertaken by the University of Suffolk’s Institute for Social and Economic Research, almost half of small charities (47%) are only ‘partially’ confident in their capacity to identify and assess risk, while more than half (54%) feel ‘less than fully confident’ in their ability to manage risk.SALAMAT adopting a simple risk management measures in the medical missions going to Sudan. This is basic requirement to comply with the charity commission rules and to maintain its reputation.
Areas of risk management SALAMAT cover in the charity work
- Recruiting volunteers
- Damage to reputation
- A decline in funding and donations
- Data loss
1. Recruiting Volunteers
To avoid problems for the charity further down the line, simple risk management measures are part of every volunteer recruitment process in SALAMAT, even when recruiting for the most basic of roles.
1.1. Promoting the role
SALAMAT understand It is important to provide an accurate description of the responsibilities expect the volunteer to take on – key details such as the location, time commitments required and any specific areas of ownership (e.g. event coordination, finance, or fundraiser) are made clear.
1.2. Background checks
For charity works in care, with children or vulnerable people, SALAMAT always be sure that appropriate background checks are made on the candidate. e.g. DBS checks. Because the reputational damage that can be caused by recruiting someone that has a questionable background can destroy the public’s confidence in a charity.
1.3. Inductions and training
Before starting any activity SALAMAT hold an induction to run through health and safety procedures, introduce the volunteer to other charity staff members and hold training (if necessary) helps volunteer integration and can prevent issues further down the line.
If recruiting volunteers for the first time, SALAMAT check if he has adequate insurance. Employer’s liability insurance and travel insurance, in most cases, covers the costs of defending the organisation against allegations of illness or injury caused to a volunteer – for example, if they were to slip on a wet floor and injure themselves. A claim like this could cost your charity thousands of pounds to defend and settle, and without insurance cover, this could pose a serious financial risk.
1.5. Ongoing volunteer risk management
After recruiting volunteers, SALAMAT continue risk management, because it’s important to put measures in place to reduce both the likelihood of something going wrong and the impact if it did.
1.6. Damage to reputation
The common scenario her is financial issues. All trustee of SALAMAT pay their expenses from pockets. SALAMAT understand that unlawful payments can result in personal liability for the trustee, as well as a breakdown in public confidence in the charity. SALAMAT observe that all vital accounts are kept up to date, submitted to the commission on time and records of trustees’ expenses are transparent.
1.7. A decline in funding and donations
SALAMAT understand very well that accidents can happen, and charitable status isn’t enough to stop someone from making a claim against our charity. For that reason SALAMAT striving to make adequate insurance cover in any areas could spell financial ruin for the charity if something unexpected were to happen, not to mention possible action against trustees for failing to ensure the charity is fully protected. We make sure that individuals of the trustee, executives and volunteers have adequate medical, health and travel insurance according to UK regulations. The group who joint in Sudan have their own arrangements and we don’t have a control over that.
1.8. Loss of data
SALAMAT understand that data security is a real risk for charities of all sizes. Human error can be the greatest danger in respect of data loss; a lost memory stick or laptop could put significant amounts of confidential information at risk. All the data is kept in the charity laptop. Sometime we use video camera to document our activities. Some photos and videos from activity are transferred to the charity page on the internet.
SALAMT knows that Fraud is a huge risk for us as small charities and can come in various forms, both internally and externally, as they are often seen as an easy target due to the high levels of cash handled and the potential lack of scrutiny within their financial department. Examples of internal fraud include misuse of charity money and false invoicing, while external fraud can range from unauthorised fundraising to credit card and email scams. The repercussions of fraud can result in not only financial loss but also damage to reputation and a lack of public confidence.
2. A three-step guide to risk management for trustees
In SALAMAT the responsibility of managing and controlling a charity means a trustee’s involvement in the risk-management process is essential, Poor risk management reflects badly on both trustees and their charity and leaves them in a position of vulnerability (and potentially facing allegations of negligence) when something inevitably goes wrong.
SALAMAT working on the following these three steps and also be sure trustees can create a simple but effective risk-management strategy that will minimise the chances of something going wrong during their tenure.
Step 2.1. Allocate responsibilities to individuals
Different charities face different risks depending on their finances and the complexity, size and nature of the activities undertaken. By allocating risk-management responsibilities to an individual in each department, the charity can benefit from their specialist knowledge of systems and processes, and of their weaknesses, to identify the risks facing them.
Step 2.2 Identify the risks
SALAMAT continuously maintain a safe environment for visitors and staff to work in. A trustee also consider what needs to be done if a serious event does take place. This could be anything from a major computer malfunction that breaches confidential service-user data, to a physical disaster such as a flood or fire.
The diagram below details some of the risks and the knock-on effects they can have on the charity’s operations. Once risks are identified, they should be assessed for their likelihood and impact (this is a collaborative process between the risk manager and trustee) and a decision taken on the processes to control and document them; a simple example is an accident book to record injuries suffered by volunteers and service users.
Step 2.3. Insuring against the unforeseen
SALAMAT understand that insurance plays a big part when evaluating risk assessment; some risks are insurable but others are not. For example, insurance is available for injury claims at public events, but not for ‘trade risks’ such as lack of ticket sales due to inadequate promotion. Some areas of insurance which SALAMAT work on and trying to cover are the following
- Professional indemnity insurance can protect against allegations of negligent advice.
- Trustee liability insurance can protect against allegations of wrongdoing by trustees.
- Public liability insurance can cover against injuries and illness suffered by members of the public.
- Employers’ liability insurancecan protect against injuries and illness suffered by employees (and usually volunteers).
- Fidelity cover can protect against loss of money or goods arising from fraudulent acts by employees.
3. The Charity Commission and risk management
SAAMAT appreciate that the Charity Commission offers excellent guidance on the basic strategies and principles that can be applied to help trustees manage their risks. This help trustees set a risk framework that allows them to identify the major risks that apply, make decisions about how to respond to risks they face and make an appropriate statement regarding risk management in their annual report. Sam Younger, chief executive of the Charity Commission, says: “One of our priorities has to be to raise trustees’ awareness of the financial risks charities face and signpost them to resources that can help them, particularly to avoid fraud.”
Overall responsibility for the management and control of our charity rests with the trustees. Their involvement in risk management is essential, particularly in setting the charity’s risk appetite, providing accountability for the effective risk management and ensuring compliance with trustees’ duties. This should not be interpreted as meaning that trustees undertake each stage of the process themselves, rather that it is their responsibility to ensure that the process is rigorous and implemented.
4. Risk register
The core risk management control document for many organizations is the Risk Register. There are many formats for risk registers and for many something simple like the one below will be amply good enough and we be sure that we start using it from our next mission to Sudan. Importantly the Risk Register in SALAMAT is:
- Owned by the Chief Executive and senior management team;
- Overseen by the trustees, and monitored by the senior staff (all significant risks) and Board of trustees (major risks). format