The Charity Commission has urged charities to “better communicate” to the public through their annual reports and accounts.

The report comes after the regulator published the results of its latest monitoring reviews of charity trustee’s annual accounts.

While the findings reveal a “modest improvement in the quality of public reporting”, there are still “too many charities” falling short in this area, it says.

The Commission has now asked charity bosses to do more so that the public can understand “exactly what a charity does” and “how their donations are being used”.

In total, the regulator found that just over half (51 per cent) of charities demonstrated a “clear understanding of the public reporting requirement”. This particular section sets out the charity’s activities for the public benefit.

Likewise, just three in five charities included a public benefit statement, while seven in 10 explained who benefitted from the charity’s activities.

The review also found a discrepancy between the quality of large and small charities’ accounts. While 74 per cent of large charities met the basic quality benchmark set out by the Charity Commission, just 64 per cent of small charities passed the acceptance test.

Nigel Davies, Head of Accountancy Services at the Charity Commission for England and Wales said: “Our research into trust and confidence in charities shows that the public no longer give charities the benefit of the doubt; they want evidence that charities make a difference when using their money. 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.

“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 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.”

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About our Charities team

About our Charities team

With Mark Sharpley, UK200Group specialist legal sector member, and fellow partners Steve Bramall and Luke Taylor at the helm of an experienced team of charity finance specialists, Smailes Goldie is well positioned to offer advice to the charity and not-for-profit sector. We understand that charities are now facing a more challenging environment than ever before, so it is essential to have a team of accountants who understand the fast changing nature of this sector, which has more regulatory and compliance requirements than most. If you feel that you need advice on any of the issues discussed in this e-bulletin, Smailes Goldie are here to help.

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