Less than a fifth of UK charities have implemented all the necessary risk management measures to protect them from financial threats, according to a survey by accounting and business advisory firm PKF.
The poll reveals that, although more than 90 per cent of charities have made some attempts to install risk policies, risk registers and business continuity plans, fewer than 20 per cent have comprehensive risk cover.
Despite this, 28 per cent consider their risk management strategies to be 'fully embedded'. Half the respondents admitted that their risk policies were only 'part embedded'.
The research, which surveyed 308 charities in England, Scotland and Wales, has been published in PKF's 2006 report Managing Risk - Working With Others.
Richard Weighell, report author and head of PKF's business risk services team, said some charities still didn't understand what was required. "We need an education process to push charities to work out what skills they need to deal with these issues," he said.
"Given that a quarter of charities know they have been victims of fraud in the past three years, no one can afford to be complacent."
Keith Hickey, chief executive of the Charity Finance Directors' Group, said charities were moving in the right direction but that more needed to be done to minimise risk to the sector.
"Smaller charities are often more vulnerable to the range of threats they face," he said.