Charities ‘not clear enough with public on how they use their funds’

3 Sep 18

Charities have been reprimanded for failing to use their accounts and annual reports to communicate clearly and transparently with the public.

The sector’s watchdog said, despite some modest improvements, “too many” charities were still falling short in the area of public reporting.

Nigel Davies, head of accountancy services at the Charity Commission, said people wanted to see evidence that charities were using their money to make a difference.

“Public reporting is an opportunity for charities to tell their story and explain to the public what they do and how they use charitable funds,” he said.

“Producing a trustees’ annual report and accounts is not an administrative box-ticking exercise. It is a chance to show how your charity is making an impact and how you are delivering on your core purpose.

“Today’s Charity Commission results show that too many charities are still not meeting very basic standards when it comes to making key information available to the public.”

The watchdog scrutinised a random sample of 106 charities’ accounts and annual reports to determine whether they were meeting reporting standards and whether the documents met readers’ needs.

Just over half (51%) of the sample reviewed demonstrated a clear understanding of public benefit reporting standard – a 5% improvement on last year.

Most included key aspects of public benefit reporting: 71% of the charities reviewed explained who benefited from the charity’s activities, and 62% included a public benefit statement.

Three quarters of larger charities (those with incomes over £25,000), produced reports and accounts of an acceptable quality, complying with the basic benchmark set by the Charity Commission.

However, performance was weaker among smaller charities where only 64% produced annual reports and accounts of acceptable quality.

The regulator has issued guidance to 89 of the charities included in its review to help them improve future performance.

  • Vivienne Russell
    Vivienne Russell is managing editor of Public Finance magazine and

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