Cyber threats to UK charities are increasing at an alarming rate. In 2024, 32% of charities reported experiencing cyber security breaches, with this figure surging to 66% for larger charities (those with an income over £500,000). The most common threat? Phishing attacks, which have affected 83% of charities in the past year.
Nonprofits face distinctive cybersecurity challenges. Limited budgets often mean fewer dedicated security resources, while reliance on third-party platforms can introduce vulnerabilities. Meanwhile, charities handle sensitive donor and beneficiary data, making them key targets for cybercriminals. A security breach can lead to financial loss, compliance violations, and severe reputational damage.
This is where cyber security audits play a critical role. A thorough audit helps identify vulnerabilities, ensure regulatory compliance, and safeguard your charity’s critical data.
In this guide, we’ll explore:
- How a Cyber Security Audit Works – What’s involved and why it’s essential.
- Compliance Requirements for Nonprofits – Key regulations charities must adhere to.
- Best Practices to Strengthen Security – Actionable steps to improve your nonprofit’s cyber resilience.
By the end, you’ll recognise why a cyber security audit is not just a precaution it’s a necessity for protecting your charity’s mission
What is a Cyber Security Audit?
A Cyber Security Audit is a structured assessment of an organisation’s IT systems, policies, and practices to identify security vulnerabilities and ensure compliance with industry standards. For nonprofits handling sensitive donor and beneficiary data, these audits are essential in safeguarding information, preventing breaches, and maintaining donor trust.
Security auditing and compliance help charities meet necessary security standards, ensuring they follow cyber security best practices for nonprofits. A complete audit evaluates an organisation’s security posture, identifying weaknesses that could be exploited by cybercriminals. By addressing these vulnerabilities proactively, charities can mitigate risks and enhance their resilience against attacks.
There are several types of security audits, each serving a distinct purpose:
- Internal Audits – Conducted by an in-house IT team or security officer, these audits assess existing security controls and ensure policies are followed. While internal audits are effective for ongoing monitoring, they may lack objectivity and in-house expertise to conduct a thorough analysis.
- External Audits – Performed by third-party cyber security professionals, these provide an unbiased assessment of an organisation’s security posture. External auditors use industry-standard frameworks to underline risks that internal teams might overlook.
- Compliance Audits – These focus on whether an organisation meets specific regulatory requirements, such as GDPR (General Data Protection Regulation) and Cyber Essentials certification. Compliance audits ensure that nonprofits adhere to legal and ethical responsibilities when handling sensitive data.
Why Cyber Security Audits Matter for Nonprofits
The importance of cyber security for charities cannot be overstated; cyber security audits play a critical role in keeping nonprofits protected from developing threats. With the latest cybercriminal trends constantly shifting, nonprofits must proactively assess their security posture to stay ahead of potential attacks.
Nonprofits are prime targets for cybercriminals due to several risk factors. Some of the top reasons for charity cyberattacks include:
- Handling sensitive donor and beneficiary data – Charities store personal and financial information that is extremely valuable to cybercriminals.
- Limited IT budgets and cyber security resources – Many nonprofits lack dedicated cyber security teams, making them more exposed.
- Reliance on third-party platforms and online transactions – Digital fundraising platforms and cloud-based platforms can introduce security gaps if not accurately managed.
Key Benefits of a Cyber Security Audit for Nonprofits
A cyber security audit is more than just a technical assessment, it’s a practical step toward protecting your nonprofit’s mission, reputation, and stakeholders. By detecting vulnerabilities and strengthening security measures, charities can ensure long-term resilience against cyber threats. Here are the key benefits of conducting a cyber security audit:
Protecting Donor & Beneficiary Data
Nonprofits handle vast amounts of personal and financial data, making them leading targets for cybercriminals. A security audit helps prevent data breaches, identity theft, and financial fraud by ensuring robust security controls are in place to protect sensitive information.
Ensuring Compliance
Charities must comply with data protection laws and standards such as GDPR and Cyber Essentials. Failing to meet these requirements can result in legal penalties, reputational damage, and loss of donor trust. A security audit ensures your nonprofit affiliates with all necessary data protection guidelines, reducing compliance risks.
Enhancing Donor & Stakeholder Confidence
Trust is essential for nonprofits. Demonstrating a commitment to cyber security best practices reassures donors, grant providers, and stakeholders that their data is safe. A robust security system can also help attract funding, as many funders now assess an organisation’s cyber resilience before making contributions.
Reducing Cyber Risk and Identifying Vulnerabilities
A cyber security audit proactively identifies weaknesses in IT infrastructure, access controls, and staff security awareness. By addressing these risks early, charities can prevent cyber incidents such as ransomware attacks, phishing scams, and data leaks before they cause critical harm.
Minimising Operational Disruptions
Cyber attacks can stop fundraising efforts, disrupt service delivery, and damage critical business operations. A comprehensive audit helps prevent these disruptions by ensuring backup systems, incident response plans, and security protocols are in place, keeping the nonprofit running efficiently even in the face of a cyber threat.
Cost Savings in the Long Run
Recovering from a cyber attack is far more expensive than preventing one. The financial impact of a data breach, including regulatory fines, reputational damage, and loss of donor confidence, can be devastating. Investing in recurring cyber security audits helps charities avoid these costs and allocate funds where they’re needed most.
Key Steps in a Cyber Security Audit for Nonprofits
A cyber security audit follows a structured approach to recognise weaknesses, assess risks, and ensure a nonprofit’s IT infrastructure is protected. Here’s a breakdown of the key steps involved in the audit process:
1. Risk Assessment – Identifying Nonprofit-Specific Cyber Security Risks
The first step is to evaluate the unique cyber risks facing your nonprofit. This includes assessing:
- The types of sensitive data stored (e.g., donor details, payment information, beneficiary records).
- The likelihood of threats, such as phishing attacks, ransomware, and insider threats.
- The potential impact of a breach, including financial losses, reputational damage, and legal consequences.
Identifying these risks allows nonprofits to prioritise security measures based on their most pressing vulnerabilities.
2. Vulnerability Assessment: Checking for Weaknesses in Systems and Networks
A vulnerability assessment involves scanning an organisation’s IT environment to distinguish security flaws. This process typically includes:
- Testing network security, servers, and endpoints for outdated software, misconfigurations, or weak passwords.
- Checking cloud-based platforms and third-party integrations for security gaps.
- Reviewing past cyber incidents to ensure weaknesses have been properly addressed.
Regular vulnerability assessments help nonprofits identify and fix security gaps before cybercriminals exploit them.
3. Access Controls Review: Ensuring Only Authorised Personnel Access Sensitive Data
Charities should restrict access to sensitive data to protect donor and beneficiary information. An access controls review ensures:
- Role-based access controls (RBAC) are in place, so staff only have access to the data they need.
- Multi-factor authentication (MFA) is enforced, adding an extra layer of security.
- Former employees, volunteers, or third-party vendors no longer have access to charity systems.
Limiting access to critical systems reduces the risk of internal threats and accidental data leaks.
4. Compliance Audit: Evaluating Adherence to Nonprofit-Specific Data Security Regulations
An important part of a cyber security audit is to ensure nonprofits comply with various data security laws and standards, such as:
- GDPR (General Data Protection Regulation) – Ensuring proper handling of personal data.
- Cyber Essentials – A government-backed certification that strengthens security against cyber threats.
- Fundraising Regulator & Charity Commission Guidelines – Protecting donor data and maintaining public trust.
A compliance audit confirms that security policies and processes align with these regulations, helping nonprofits avoid penalties and reputational damage.
5. Incident Response Planning: Preparing for Potential Cyber Threats
Even with strong security measures, cyber incidents can still happen. A cyber security audit includes reviewing and improving incident response plans, ensuring that:
- Staff know how to recognise and report cyber threats.
- Backup and disaster recovery solutions are in place to minimise downtime.
- A clear communication plan exists to notify stakeholders in the event of a breach.
A well-prepared incident response strategy helps nonprofits recover quickly from cyber attacks and reduce disruption.
6. External Auditing Considerations: When to Bring in Third-Party Experts
While internal security reviews are helpful, an external cyber security audit can provide an unbiased, expert assessment. For even stronger security, nonprofits should consider working with charity cyber security professionals who can provide a solid cyber security approach when:
- They lack in-house IT expertise to conduct a thorough security review.
- They need an independent evaluation of security policies and compliance.
- They require advanced penetration testing to simulate real-world cyber attacks.
Bringing in external experts ensures that nonprofits receive up-to-date insights and best practices, strengthening their overall security posture.
By following these major steps, charities can proactively identify security gaps, ensure compliance, and protect sensitive data, ultimately safeguarding their mission against cyber threats.
When Should Your Nonprofit Conduct a Cyber Security Audit?
Regular cyber security audits are vital for nonprofits to mitigate risks, maintain compliance, and protect sensitive data. However, the occurrence and timing of these audits depend on several factors, including organisational changes, past cyber incidents, and compliance requirements.
A cyber security audit should be carried out:
- Annually – A yearly audit helps review security posture, update policies, and address vulnerabilities before they become significant threats.
- After a Cyber Incident – If your nonprofit experiences a data breach, ransomware attack, or unauthorised access, an audit is crucial to assess the damage, identify weak points, and prevent recurrence.
- Before Implementing New IT Systems – When adopting new software, donor management platforms, payment processing systems, or cloud storage, a security audit ensures that adequate security controls are in place.
- To Meet Compliance or Grant Requirements – Many funding bodies and regulators require nonprofits to demonstrate strong cyber security measures before approving grants or partnerships. Conducting audits as part of compliance ensures ongoing eligibility for funding and builds stakeholder trust.
Internal vs. External Cyber Security Audits: Which is Right for Your Nonprofit?
Both internal and external audits play a significant role in strengthening a nonprofit’s security posture, and the choice also depends on your charity structure and budget. While internal audits provide ongoing security monitoring, external audits offer professional insight and compliance validation.
Both types have pros and cons, which we will review here:
Internal Cyber Security Audit Pros
- Conducted by in-house IT teams or security officers, making it a cost-effective option.
- Regular monitoring of security measures ensures continuous protection.
- Allows for an immediate response to vulnerabilities and system weaknesses.
Internal Cyber Security Audit Cons
- May lack expertise in advanced threat detection and modern cyber threats.
- Could miss compliance gaps without external input.
- Internal bias can lead to overlooked vulnerabilities.
External Cyber Security Audit Pros
- Performed by third-party charity cyber security professionals with specialist knowledge of nonprofit security risks.
- Provides an unbiased, in-depth assessment of vulnerabilities.
- Ensures compliance with GDPR, Cyber Essentials, and other nonprofit security frameworks.
- It can include penetration testing to simulate real-world cyberattacks and expose weaknesses.
External Cyber Security Audit Cons
- Higher costs compared to internal audits. However, there are cyber security grants available for charities that can help offset the expenses.
- Requires good coordination and communication with an external provider. For external cyber security audits, it’s essential to find a good IT provider who will work effortlessly as an extension of your team with minimal disruption.
Which is best for your nonprofit? The most effective approach is a combination of both. Nonprofits should aim to conduct routine internal audits and schedule external audits periodically or when required by funders or regulators.
Final Thoughts on Cyber Security Audits
A cyber security audit is not just a compliance requirement, it’s a critical safeguard for your nonprofit’s mission. By proactively assessing security risks, implementing risk management best practices, and conducting regular audits, charities can:
- Protect sensitive donor and beneficiary data.
- Maintain trust and confidence among stakeholders.
- Ensure compliance with legal and industry standards.
- Prevent costly cyber incidents and disruptions.
Get in Touch
Would your charity like to learn more about cyber security, security audits, and compliance and how Qlic can help? Get in touch with the team at Qlic here.
