A monitoring review published by the Charity Commission, based on a random sample of 106 annual reports, says 51 per cent have a clear understanding of the issue

Too many charities are still “falling short” when telling the general public about the work they do through their annual reports and accounts, according to the Charity Commission.

The commission today published three monitoring reviews of charity’s annual reports and accounts, including one about public benefit reporting in the charity sector, based on a random sample of 106 annual reports and accounts.

The reviews say that 51 per cent of charities have a clear understanding of public benefit reporting, an improvement of five percentage points on the previous year.

The commission found that the majority of accounts – 62 per cent – included public benefit statements and 71 per cent of them clearly explained who benefited from the charity’s work.

Charities have a legal obligation to follow the commission’s guidance on public benefit reporting in their annual accounts and reports.

The commission found that 74 per cent of annual reports and accounts for charities with incomes exceeding £25,000 a year were of an “acceptable quality”, but this figure fell to 64 per cent among smaller charities.

The main reason for which charities were deemed unacceptable on this issue was the failure to include either the annual report or the accounts, according to the commission – with some submitting neither.

Eighty-nine charities included in the reviews received regulatory advice from the commission, the regulator confirmed.

Nigel Davies, head of accountancy services at the Charity Commission, said: “Producing an 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 results show that too many charities are still not meeting very basic standards when it comes to making key information available to the public. I am encouraged to see that an increasing number of trustees recognise the value of public benefit reporting, but there is clearly more work to be done across the sector.”

Source: The Third Sector