The majority of the country’s top 100 charities are not reporting clearly on how much they hold in reserves and why, according to a report by a top auditor for Charity Finance magazine.
Helena Wilkinson of Price Bailey found that while all charities had a reserves statement, ten did not say what their target reserves were, 15 did not explain how their reserves were calculated, and 21 did not compare their actual reserves with their target.
“Overall, transparency about reserves and the basis for charities’ calculations remain poor,” she wrote. “Few charities seem prepared to justify their reserves in detail. Reserves and strategy go hand in hand, so a lack of transparency points to a lack of strategic depth.
“It remains overall an area of poor reporting in most sets of accounts.”
Wilkinson conducted the same research in the previous year and found a similar story. She also criticised charities for reporting “reams of achievements” with little context or comparability to figures from the previous year. And she also criticised a lack of detail in the majority of charities’ reporting of key risks and remuneration policies.