Public Benefit Reporting – Are you doing enough?
In December 2018 the Charity Commission published a report following a review of a random sample of 105 sets of charity accounts. The accounts were assessed against public expectations and public benefit reporting requirements. The review found that only 52% of the trustees’ annual reports met the requirements for public benefit reporting.
Charities often have different attitudes to their trustees’ annual reports. In some cases the report is drafted towards the end of the accounts preparation process and the minimum amount of information required is included. In other cases charities go in to detail about every activity undertaken in the year such that the reader becomes lost in the level of information, without a clear picture of the overall purpose and objective of the Charity.
The Head of Accountancy Services at the Charity Commission has said that “The trustees’ annual report and accounts are a key way to build confidence among supporters.” They are also an opportunity to tell the story of the charity for the year. Charities are encouraged to do this in a balanced way, detailing both successes and challenges. Positive examples of compliance, identified by the review, included explaining why the trustees believed that the charity’s activities provided public benefit; explaining who had benefited from what the charity had done, whether a particular group of beneficiaries or the wider public; and explaining the impact of what the charity had done, such as examples of how the charity’s services had led to improvements in people’s lives.
For charities with a March year end, now would be a good time to review the requirements and consider the approach to the trustees’ report. Rather than roll forward last year’s report you could start with a blank piece of paper. Instead of being drafted by the Chief Executive, you could ask for contributions from different people within the organisation, including beneficiaries. Although the contents of the report are defined, they are not required to be included in any particular order. You could consider whether the governance information is in the right place or whether it could be moved to the end of the report. This will allow the key messages about what the Charity has achieved to be at the start of the report. Consider whether your report is too short or too long. Is it sufficient to outline the key achievements and activities of the Charity without losing clarity and focus?
There is no single answer to drafting the perfect trustees’ report, as it will depend on the Charity but regularly reviewing the information included to ensure that it meets the requirements, is relevant and tells the story of your charity is a good starting point.
If you would like to discuss the required content of a trustees’ report or require any further information, please do not hesitate to email Nicola Mason or call us on 01772 821 021.