In an era defined by rapid change and global flux, how are charities in Singapore protecting their assets and resources, ensuring compliance with regulations and guidelines, reducing operational disruptions, and safeguarding their reputation and credibility?
Risk management offers organisations a secure base to manoeuvre uncertainties confidently in an ever-changing global landscape. To understand how charities in Singapore manage risk, the 2024 Risk Management Survey Report for Charities was initiated to document the risk management procedures adopted by them.
The survey offers comprehensive and insightful reflections on charities’ risk management approaches and practices. This extensive coverage allows us to confidently comment on prevalent practices and existing gaps, illuminating areas that have evolved since our last survey in 2016. Including new risk areas, particularly Business Continuity Planning (BCP), Environmental, Social, and Governance (ESG), and climate risks, demonstrates our determination to stay abreast of the shifting nature of risk in today's world. The report analyses strategic, financial, operational, compliance, and IT risks, examining observed changes over the past five years.
Key findings
One heartening takeaway is the evident improvement in risk management practices among charities, evidenced by a notable surge in the adoption of defined risk policies. Yet, despite progress, disparities persist, signaling the imperative for collective attention and continued room for improvement.
Noteworthy is the heightened awareness of various risk categories since 2016, with identified risks aligning closely with those faced by for-profit organisations. This maturation underscores the evolving sophistication of risk management practices within the charitable sector.
Our findings on Business Continuity Planning (BCP), Environment, Social and Governance (ESG), and climate risks serve as a clear call to action, emphasising the urgent need for robust frameworks, resources, and training in these critical domains. As we chart a course forward, our primary focus lies in establishing comprehensive ESG frameworks and fostering enhanced monitoring and reporting practices.
How charities can manage risk effectively
In the midst of global uncertainty, charities and Institutions of a Public Character (IPCs) (collectively referred to as "Charities") need to have a systematic and formalised approach towards risk management. Utilising the comprehensive Enterprise Risk Management (ERM) framework is fundamental to ensuring that risks and threats are managed effectively to minimise any potential impact on operations.
Developed in collaboration with the Charity Council and Singapore Institute of Technology (SIT), our Enterprise Risk Management Toolkit for Charities and Institutions of a Public Character (IPCs) 2024 provides:
- Insights on Singapore Charities' ERM maturity state
- Focus areas for Charities in Singapore
- Lessons learnt from the COVID-19 pandemic
This toolkit takes reference from local and global Risk Management and governance standards, including the following:
- 1S031000: 2018 - Risk management
- COSO Enterprise Risk Management Framework (2017)
- ISO 22301: 2019 - Security and resilience
- 1SO 22313: 2020 - Security and resilience - Business continuity management systems — Guidance on the use of ISO 22301
- Taskforce for Climate-related Financial Disclosures (TCFD)
Statutory regulations and legislations (e.g. Charities Act and regulations and sector specific regulations) should take precedence over the guidance provided within this toolkit as applicable.
This toolkit aims to provide the 'next steps' guidance to Charities:
- Unlocking the values of a mature ERM programme
- Identifying and managing emerging risks
- Responding to risk incidents
- Incorporating climate risk drivers into existing ERM frameworks
The principles and guidance in this toolkit are not meant to be prescriptive or exhaustive in nature. Individual charity should consider the charity's objectives, resources, structure and context when embarking on this continuous ERM journey.
In addition to the toolkit, charities looking to build on their ERM policies can apply for the Charities Capability Fund (CCF) Consultancy Grant. Additionally, board members and staff of Charities can bolster their risk-management capabilities by tapping on the CCF Training Grant to attend relevant courses.
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