Small Charity Accounts and Trustee reporting

Published on 17 September 2018

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We have often stressed the importance of ensuring accounts are accurate in respect of disclosure and use the Trustees’ Report to explain and “sell” the charities activities.

A report published 3 September 2018 by the Charity Commission states that “64% of small Charities provided sets of accounts of acceptable quality”. The review was undertaken to look at both the accounts and the Trustees reports. However, 36% of small charities accounts were not acceptable.

The main three reasons for failing to meet the set standards were, failing to supply adequate accounts or Trustees report, only one of the documents was submitted (usually the accounts) or neither were submitted. Funders will look at your accounts, if they are not correct or not transparent about what you do, they may decline your request.

Does your Trustee report tell the right story?

The report goes on to say “Charities must better communicate to the public through their annual reports and accounts”. The report details that there has been an improvement but comments that “too many Charities are still falling short in this area”. What have you done this year and what has been the impact of this work.

Why is the Trustees report important?

The Trustees report is a fantastic opportunity for a Charity to showcase what it does and how it benefits the public. This will raise awareness of the Charity and give comfort to the stakeholders of the Charity that the funds are being well managed. The Trustees report should also help the Charity be completely transparent as to how it has met its charitable objects.

What should you include in your Trustees report?

The Trustees report should give the reader a good understanding of what the Charity does to benefit the public. Make it interesting and inviting.

The Trustees report must include:

  • The Charity name, registered number and how it is governed
  • Names of the Trustees
  • How the Charity is managed
  • The objectives of the Charity
  • How the Charity has met those objectives and its main achievements
  • How the Charity has met public benefit criteria
  • Details of reserve policies

Public benefit reporting

Small charities have a duty to:

  • Clearly report how the Charity has met its charitable activities focusing on how this benefits the public.
  • Include a statement in the Trustees report to say if the Charity has complied with that duty.

This is your report but it will be read by many – be engaging!

For further information on the above, please speak with Michelle Peters by contacting us here.

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