SINGAPORE - More than half - or 50.9 per cent - of the charities and institutions of a public character (IPCs) here either do not have formal policies or ways to manage risks, or are not sure if such policies exist.
These risks include fraud risk, governance risk and information technology risk, among others.
This is according to findings of a survey done by the Charity Council, KPMG, and the National University of Singapore (NUS) Business School released on Tuesday (June 6). The survey was conducted in September last year.
The survey found that the top risk management challenges charities face are: A lack of experience or expertise in risk management (79.3 per cent), human resources to carry out risk management activities (70.3 per cent), and financial resources to implement risk management practices (59.0 per cent).
Mr Gerard Ee, chairman of the Charity Council, said: "Good risk management is about driving the right values and culture throughout the organisation. In addition, charities need to build the capability to identify, understand and manage risks. It is part and parcel of good stewardship, and serves to protect the interest of the beneficiaries, employees and volunteers."
The survey also found that charities have a zero tolerance for fraud risk, including mismanagement of a charity's funds and resources.
Ms Susan See Tho, a senior lecturer at the NUS Business School's Department of Accounting, noted that the survey showed that charities place financial matters as one of their highest priorities, as opposed to risk governance and information technology risk.
"Hence, more has to be done by charities to set the tone and inculcate a stronger risk governance culture throughout all levels of staff and management," Ms See Tho said.
"Education will play a vital role in enabling charity sector employees to better understand the benefits of risk management, so that they are motivated and empowered in making it a priority in their day-to-day work."
To help charities and IPCs to improve their risk management in their organisations, an Enterprise Risk Management Toolkit was also launched on Tuesday.
The toolkit provides a framework for risk management that can be adapted to meet the needs of different types of charities, especially those with limited resources. The kit, which also offers best practices, will be available online for free.
Training programmes and workshops will also be conducted to help charities to adopt the recommendations in the toolkit.
Charities can tap on the VWOs-Charities Capability Fund, too, which provides grants for training and consultancy needs.