Latest insights from our experts

Posted 2 May 2017
by Leanne Yendell

Are you putting your charity in the best light?



Many small charities in the UK are failing to meet Charity Commission standards in relation to their reporting and accounts, following the Commission’s most recent Accounts Monitoring Review. Nearly half of the reports and accounts reviewed were found to be of “unacceptable quality”. 

And given the annual report and accounts can be an important tool for charities in demonstrating their work and impact to their funders and other stakeholders, charities could be losing out on support and credibility if their report and accounts are non–compliant or poorly presented.

Small charities for this purpose are those which have incomes of less than £25,000 per year and there are currently around 96,539 registered charities of this size in England and Wales. This represents 58% of all charities registered with the Charity Commission.

In June 2016, the Commission reviewed 109 randomly-selected small charities’ annual documentationwith 49 of the selected did not meet ‘basic standards’. This was made up of 10 charities who failed to provide both an annual report and set of accounts, 17 failing to provide either an annual report or accounts and 22 providing both documents but failing to provide key information.

Examples of where key information fell short of expectation were:

1)    The charity sending the Commission  what appeared to be papers from their annual general meeting, rather than an annual report;

2)    Failing to explain the charity’s objectives and/ or the activities that the charity had carried out to achieve them; and

3)    Incomplete accounts that did not include information on their assets and liabilities.

In addition to this finding, the Commission also recently reviewed public benefit compliance across charities with an income over £25,000 per year. Out of a sample of 107 charities, this report found that 54 per cent failed to meet public benefit reporting requirements, with 13 charities failing to describe the difference they made, 21 not including a statement confirming their compliance with public benefit requirements and 24 charities doing neither.

This wasn’t a case of the Commission miraculously choosing the worst of the bunch during its review – the findings clearly suggest that no matter the size of the charity, compliance clearly remains a problem.

What can you do ?

  • Look at the Charity Commission guidance on annual reports and accounts- there is plenty of it, for example, click here.
  • Review your last submission, in line with the guidance. Be honest – do you think it is sufficient? If you don’t, the Commission probably won’t!
  • Consider using the Commission’s templates for annual reports and accounts. These are particularly useful for very small charities who might not have the funds to retain  significant specialist professional support.  For example, see here.
  • Contact our charities team or charity specialist accountants to discuss your concerns.

For further information, you can call us on: 01392 207020 or email: enquiries@tozers.co.uk

 

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About the author

Leanne Yendell

Paralegal

Paralegal in our Company and Commericial team at our Exeter office