07 September 2018
Every year the Charity Commission scrutinises a sample of charity annual reports to check that they are meeting the public benefit reporting standards and if they meet the needs of those who will read them. They publish their findings on their website.
This year the Commission also reported on research into public trust and confidence in charities (see our Charity Sector blog on 20 July 2018) and found that “ensuring that a reasonable proportion of donations make it to the end cause”, and “making a positive difference to the cause they work for” are key factors driving public trust and confidence in charities.
The Annual Report is one of the main ways of communicating what has been achieved, and how that money has been spent. A summary of the figures can be posted onto your website, easily accessible to those who do not wish to download the whole annual report and accounts from the Charity Commission website.
Highlighting the benefits
Many charities prepare an annual summary report to send out to supporters and potential donors, and this is a great opportunity to highlight who benefits from their donations, and in what way.
Here are the key elements to consider when compiling your Annual Report:
A summary
Include a summary of the charity’s purpose and what it is trying to achieve.
Facts and figures
How much the charity received in donations and grants, and what was achieved with that income. What resources were used and what overall impact did you have?
KPIs
The key performance indicators (KPIs) that the charity uses to measure its achievements, the targets set for that year, and to what extent it has achieved what it set out to do. How many people benefited, what were the outcomes of the actions taken?
Show the split
Demonstrate how much of what was received was actually spent directly on achieving those results and meeting those KPIs. This is a key figure for donors and grant providers.
Visuals
Charts or other visual representations of the KPIs and targets set, measured against the actual statistics for the year. Make the figures as accessible as possible.
A charity needs to show how it secures and maintains the resources that it needs to deliver the public benefit for which it has been set up. This will include both financial and non-financial resources, the latter including (for instance) the recruitment and training of sufficient volunteers to deliver the services to beneficiaries.
Overall impact
Those who read annual reports, or the summaries on your website or sent out/emailed, will want to see charities measuring their activities, outputs and outcomes, and will want to know how much was spent on achieving them. Readers will want to see the overall impact their money has made. This is key to ensuring that charities retain the confidence of donors and grant providers, and will continue to receive the income they need.
The Charity Commission is keen to ensure that all charities demonstrate their public benefit in the most accessible way possible, and trustees should ensure that the annual report does just that.
If you would like to discuss this or any other matter affecting your charity, please contact your local UHY charity specialist.
Alternatively, if you would like to read more charity focused blogs please click here.
