25 April 2017
The Charity Commission has announced that more than 50% of charities are failing to adequately explain in their annual account how the charity is meeting its objectives. Further, around a quarter do not meet basic standards for users, and this figure rises for smaller charities.
This is a good reminder that charities should carefully consider the public benefit requirement and how they choose to explain how they have met it. It is a requirement for charities to:
- explain the main activities undertaken to further the charity’s purposes for the public benefit; and
- include in their report a statement confirming whether the trustees have had regard to the Charity Commission’s guidance on public benefit.
One advantage of the public benefit statement is to clarify to readers of the accounts and stakeholders interested in the charity why their work matters, and the difference they are making.
The Charity Commission article highlights the importance of engaging a professional firm, experienced with charity reporting requirements. For the smallest charities, those with annual income of less than £25,000 and which do not generally require any form of external scrutiny, it is perhaps understandable that cost can be a constraint here. For larger charities the reporting requirements can be complex, and it is important that all relevant information is included in the trustees’ annual report, appropriate formats are used, and that disclosures relating to financial information are made.
If you require any assistance with the financial report requirements for charities then please contact your nearest UHY charity specialist, or if you are interested in reading the full Charity Commission article this can be found here.
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