Key Findings: Charity scandals and widespread governance failures across the third sector are putting trustees, philanthropists and beneficiaries at risk.

A report by Sorbus.org analyses a data set of 151,180 charities and identifies the issues. 

The report by SORBUS.org reveals the following key findings:

• Widespread Shortcomings: A staggering 75% of UK charities fail to implement the six policies and procedures the Charity Commission expects most to have.
• Safeguarding Gaps: Alarmingly, 28% of charities serving vulnerable populations (children, the elderly, and disabled people) lack a safeguarding policy, exposing these groups to unacceptable risks.
• Increased Trustee Liability: Trustees face heightened personal liability for governance failures, with recent statutory inquiries leading to disqualifications and charity removals, underscoring the severe consequences of negligence.
• Philanthropic Scrutiny: Philanthropists are increasingly conducting governance audits before funding decisions, meaning charities with weak governance will struggle to secure vital donations.
• Reputational Damage: High-profile governance scandals have severely damaged the reputation of individual charities, their founders, and the broader charitable sector.

The Data: 

By transferring current data of the charity register into a database, SORBUS.org has conducted a comparison between the responses of UK charities and regulator expectations.

The Source is the Charity Commission for England and Wales (n.d.) The Charity Register. Available at: https://register-of-charities.charitycommission.gov.uk/en/register/full-register-download (Accessed: 30 September 2025).

• The total number charities in England and Wales in 2025 are 185,073. 
• 151,180 charities were included into the analysis. 
• 33,893 charities were excluded from the analysis for not having completed a return in the past 12 months.

Introduction: The Governance Challenge.

Since January 2024, the Charity Commission has published 28 statutory inquiries into charities. The outcomes were significant:

• Sixteen inquiries resulted in the disqualification of one or more trustees.
• Ten inquiries led to charities being removed from the register altogether. 

Poor governance was identified as a root cause in most cases, with failings in financial controls, adherence to governing documents, safeguarding procedures, and management of conflicts of interest.

Analysis of mandatory questions introduced to Charity Commission annual returns offer new insight into governance practices across the entire sector. By transferring the data of the charity register into an accessible database, SORBUS.org has conducted a comparison of the responses of UK charities against regulator expectations. The findings point to widespread governance failures and omissions. 

The headlines of the research:

• Only 25% of UK charities have instated all six of the Charity Commission’s expected policies/procedures. 

• Of the 43,476 charities that provide services to children, the elderly, and disabled people, 12,361 (28%) do not have a safeguarding policy.

These headlines will be concerning to the Charity Commission, to the trustees (whose duty it is to provide effective governance), to the philanthropists and donors that drive charity donations, to the staff and employees of the charities and, above all, to the beneficiaries.

Background: A governance balancing act.

Governance refers to the systems and processes by which organisations are directed, controlled, and held accountable. The charity sector in the UK faces increasing scrutiny around governance practices. The Charity Commission stated, when introducing the third edition of the Charity Governance Code in 2017, “good governance is no longer an optional extra. It is essential to charities’ effectiveness and probably their survival too.” As the Code receives its latest update (made available on 3rd November) and annual return requirements continue to change, trustees must prepare to evaluate their current governance practices against evolving standards.

For charities, good governance is about ensuring that the organisation effectively and responsibly advances its charitable purposes. The Charity Governance Code, created by a steering group of sector participants (with the Charity Commission as an observer), serves as a practical tool to help trustees develop high governance standards. By its own admission, the Code is “aspirational” and intentionally “a stretch for many charities to achieve.” The Code’s aspirational nature creates a challenge: ‘good’ governance cannot simply mean ‘more’ governance. For many smaller charities, full implementation of the Code would be inefficient and costly. Conversely, avoiding governance procedures entirely exposes charities and their trustees to significant risk. Trustees must navigate complex governance expectations while balancing administrative burden against operational effectiveness.

The Compliance Reality: New Research. 

While the Charity Commission has historically taken a relatively “hands-off” approach to promoting governance, focusing instead on ensuring trustees understand their legal duties, recent developments suggest a potential shift toward greater enforcement.

Since January 2023, all charities (except subsidiaries of parent charities) must now report, as part of their annual return, on which of 13 governance policies and procedures they have in place.

Of these 13 policies, the Commission states that it “expects most charities” to have policies and procedures covering items 5, 6, 7, 10, 12, & 13. For ease of reference, we will describe the long list of 13 as “may have” and the condensed list of six as “should have”.

 CHARITY COMMISSION 13 POLICIES 

[note: the descriptions are the authors not the Charity Commissions]

A review of the Charity Commission data on these governance questions reveals a concerning gap between expectations and reality.  

table 1. sample size for analysis

Table 2. shows the number and percentage of sampled charities that have declared as having each policy. The highlighted policies are the “should have” policies that the Charity Commission expects most charities to have. 

table 2. number and percentage of charities that have declared as having each policy

Notably:

• Of 151,180 charities that completed returns in the 12 months prior to September 29, 2025, only 38,174 (25%) declared they have implemented policies and procedures covering all six areas that the Charity Commission expects most charities to have.
• Even more concerning, of 43,476 charities that provide services to children, the elderly, or people with disabilities, 12,361 (28%) do not have a safeguarding policy.

The responses point to a significant discrepancy between regulatory expectations and sector practice. 

Consequences: Poor Governance. 

The consequences of governance failures are both profound and often overlooked within the charity sector. Unlike private businesses, where market forces eventually eliminate ineffective organisations, charities can continue operating in a state of mediocrity almost indefinitely. Failure to implement proper governance not only limits a charity’s impact but can also expose it, and its trustees, to serious legal, financial, and reputational risks.

Since January 2024, the Charity Commission has published 28 statutory inquiries into charities. The outcomes were significant:

• Sixteen inquiries resulted in the disqualification of one or more trustees.
• Ten inquiries led to charities being removed from the register altogether. 

Poor governance was identified as a root cause in most cases, with particular failings in financial controls, adherence to governing documents, safeguarding procedures, and management of conflicts of interest.

Some of these failures have been high profile and received considerable press coverage. This reflects badly and damages the reputation of all involved, from trustees to philanthropists. In recent years the collapse of the Kids Company charity and the scandal relating to Captain Tom’s Foundation have led to the censuring of trustees; the travails at Naomi Campbell’s and Prince Harry’s respective charities have also brought reputational damage to the founders/philanthropists. In these headline cases the failures were dramatic in scale, related to almost all areas of governance and led to either the immediate closure or complete loss of effectiveness of the charity in question. 

Trustees should be aware that governance failures can have personal ramifications. Trustees may be personally liable for losses resulting from their failure to exercise sufficient care and skill in managing the charity’s affairs. The ramifications for Philanthropists range from the failure to achieve the desired beneficial outcomes to reputational damage. 

Reasonableness: Are the Charity Commission policies reasonable?

That 75% of charities do not have the policies in place that the Charity Commission expect most to have, shows the scale of the disconnect, but consideration must be made to the reasonableness of the Charity Commission’s expectations. If they are unreasonable then non-compliance to instate policies that are not compulsory, is less consequential. Trustees may also resist fully implementing managerial procedures devised in public sector bodies or quangos that have a reputation for introducing excessive bureaucracy at the expense of effectiveness.

Ultimately it is for the trustees to answer this question, but we believe that the policies proposed by the Charity Commission are fundamentally reasonable, and the considered application of them should lead to governance improvements in Charities that apply them. Additionally, we believe that the analysis most likely understates the scale of governance deficiencies within the sector due to the inherent difficulty in assessing at scale for each charity, which of the ‘may have’ policies are in fact essential.

Which policies a charity instates must be context specific. If for example a charity is closely associated with children or vulnerable adults then complying with the full list of six “should have” policies is clearly deficient, as it does not include a safeguarding policy, which we would propose is fundamentally necessary. The surprisingly high proportion of this type of charity that we discovered in this research did not have a safeguarding policy (28%) adds further weight to the assumption that the analysis understates the scale of the problem. 

A charity that complies in full with the six “should have” policies and whichever of the “may have” policies is contextually applicable should be comfortable in their approach to governance, at least as far as satisfying the Charity Commission. However, Trustees should consider risks that are not included in the 13 “may have” policies. 

We will publish a fuller paper on this subject, but would also highlight (a non-exhaustive list) some omissions from the 13 “may have” policies. 

• There is no expectation that charities have policies in relation to costs. We believe trustees should examine very carefully the ongoing costs of the charity – are they reasonable in relation to the charity’s objectives, funding and reserves? What is the formal charity position in relation to professional costs? Is a charity that consumes most of the funds it raises on the costs of raising the funds justifiable? Certainly, the knowledge of this outcome would dissuade donors.  
• Data protection is a strict liability business. It is no defence for Trustees to say that they are unpaid and not employees. Data breaches caused by employees or volunteers rebound onto trustees and policies and procedures for managing this risk are necessary.
• Employment. Many charities have full or part time employees and this immediately burdens them with the whole suite of employment law. The likelihood of an employment problem, a dispute, or an adversarial situation, rises when absent policies do not prevent them. A policy in this area would offer significant protection to trustees.

Risks: Who are most affected? 

Governance failures affect philanthropists, charities, charity employees and beneficiaries. Ultimately, and most importantly, if a charity is ineffectually stewarded then it will be delivering sub-optimal outcomes to its beneficiaries. Responsibilities unfulfilled, opportunity costs, money wasted, poor delivery, and worse, all impact a charity’s ability to advance its objectives. In such instances, volunteers are dissuaded, employees are poorly managed and in extreme cases at risk of unemployment.

For trustees, their obligations are clearly defined in law, and trustees are personally liable for losses or damages arising from breaches of their duties. Liability arises if a trustee fails to act in the charity’s best interests, mismanages funds, or fails to comply with legal obligations. This liability can stem from their own actions or omissions and, most concerningly, potentially from the wrongful acts of employees or volunteers. Effective trustee governance mitigates these risks, and trustees should understand their duties, seek professional advice, comply with the trust’s governing document and relevant laws, and manage risks responsibly.

For philanthropists, witnessing the wealth they have worked so hard to create, be squandered by a poorly performing charity is intensely frustrating. Once the funds have been donated the philanthropist has little redress – they can’t get their money back and have no control over the actions of the trustees. Should the governance failures lead to adverse publicity then it negatively affects perceptions of the philanthropists which, in view of their fundamental generosity, is a truly galling outcome. These risks are escalating, and many philanthropists increasingly undertake governance audits of charities before making funding decisions. Subsequently, charities with poor governance practices will struggle increasingly to raise funds in future. 

Conclusion: The Imperative for Robust Governance

The findings presented in this report paint a concerning picture of charity governance in the UK. While the bespoke nature of each charity’s operations makes a one-size-fits-all approach challenging, the concerning disconnect between Charity Commission expectations and actual practices, coupled with the frequency and severity of governance issues identified through statutory inquiries, points to a systemic problem.

The newly updated Charity Governance Code offers a timely opportunity to address these deficiencies. Ultimately, the onus lies with trustees to ensure their charities are governed effectively, adhering to regulatory policies and best practices. Failing to do so risks not only substantial reputational damage for all stakeholders but, more importantly, a profound betrayal of the individuals and causes that charities are established to serve. Robust governance is not merely a regulatory obligation; it is the bedrock of a thriving, trustworthy, and impactful charitable sector.