Examples of bad actors using “increasingly complex methods” to attack charities are on the rise, the sector’s regulator has warned.
The Charity Commission, in its second annual risk assessment, outlined a sustained increase of 29% in concerns raised about charitable status being abused for private benefit.
The 2025-26 increase, involving 374 cases, followed a 38% rise the year prior.
Caseloads have risen dramatically from 211 instances in 2023-24.
This comes after the commission’s first review in September 2025, which highlighted challenges to financial resilience as among the most serious risks facing the sector.
In its 2026 assessment, the regulator said its analysis underscored an ongoing financial squeeze in parts of the sector for the third year running.
The commission said it formally passed information to other agencies – including HMRC, police and councils – 500 times in the last year, up 8% on the 12 months prior.
It also highlighted that just two in five charities had expenditures above their incomes.
A quarter of charities with incomes below £10,000 reported only breaking even in 2024, the regulator added.
‘Growing scale and complexity of risks’
Paul Latham, the Charity Commission’s communication and policy director, said charities now face threats on multiple fronts.
“Our assessment highlights the growing scale and complexity of risks they face, including from those seeking to exploit charity status for personal benefit.”
Latham added that a lack of regulatory clarity has potentially left service users exposed to harm.
For example, the Charity Commission revealed that about a quarter of concerns raised in recent years related to safeguarding.
“[In] particular the need for trustees to pay care and attention to handling allegations related to individuals in positions of power or influence, including spiritual influence,” it stated.
Artificial Intelligence (AI) was another risk identified by the charities regulator.
Since the rise of AI, the commission has received more fraudulent applications to register a charity or apply for grants.
Fewer than half (45%) of applications to register a charity were approved in 2025-26, a significant decline from almost three-quarters (72%) in 2016-17.
Some 30% of charities reported experiencing a cyber attack in the past year, the research shows.
Significant increase in disputes
The commission said it had observed a 57% increase in cases involving a dispute with a charity from 579 to 909.
These may relate to problems with trustee elections, financial transparency or land.
This marked a significant change from 2024-25 where it found a fall of 32% in cases related to concerns about trustee decision-making or breaches of its guidance.
“We understand that this increase may be partly due to difficult decisions that charities are having to take in response to financial pressures, as well as wider societal tensions,” the commission stated.
Geopolitical conflicts, such as Israel-Palestine, have contributed to a rise in casework, it added.
Uptick in government contracts
The Charity Commission has reported a 13% increase in the number of charities awarded government contracts in the last three years.
“There has also been a small increase in those receiving government grants, with a total value of £6.75bn,” it added.
Those benefits were mainly reaped by large charities, however, as charities with incomes above £500,000 were more likely to receive government funding.
