If reputational risks are made a reality, there can be serious consequences. Trust can be eroded and reputation damaged, but knock-on effects can further threaten an organisation’s reputation.
This could be the withdrawal of funding from donors and funders who lose confidence in the charity’s ability to manage its affairs effectively. This, in turn, can lead to financial difficulties for the charity, making it harder to carry out its programmes and initiatives.
Reputational risks can also result in increased scrutiny from regulators, media outlets, and the general public. It can also result in staff morale and talent loss, as employees may become disillusioned and leave the organisation.
In some cases, reputational or associated risks can result in legal cases, which can be costly and time-consuming for charities to defend. In addition, legal action can result in further negative media coverage, leading to even more significant reputational damage. Ultimately, the consequences of realised reputational risks can significantly impact a charity’s ability to deliver on its mission and achieve its goals. This is why charity leaders must identify, manage and protect their organisation’s reputation.
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