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Sector Focus: Bringing your trustees report to life

04 May 2021 Expert insight

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We are seeing an increasing focus on impact reporting and the messaging presented in charities’ trustees’ reports. This article explores some simple changes that can be implemented in order to change the tone of the financial statements.

The Charities SORP outlines the key areas to be covered in the trustees’ report for all charities, and there are some additional requirements for larger charities, such as fundraising matters to be included. However, there are lots of ways that charities can go beyond the reporting requirements to bring the trustees’ report to life, and there is the opportunity to align the messaging with other marketing tools such as the charity annual review and website. The key starting point is thinking about who you are communicating to, what tone you want to set and what messages are important to the culture and ethos of your charity.

Bringing the financials to life

Not everyone reading your financial statements has a financial background, but there are lots of ways to make the document assessible to them. It could be that you use charts and other infographics to demonstrate how money was raised in the year, and how the money was spent. It can often be hard to filter through the financial performance when looking through the accounts, but providing a summary in a more visual way within the report can add colour and make it easier to align with the objectives, activities, achievements and performance for the year.

People reporting

A new theme we are seeing in the charity sector is how people report on their people, in particular around remuneration. People are fundamental to charities and this is reflected by staff costs often being a significant proportion of total expenditure each year. Although the SORP requires that remuneration of key management personnel is disclosed, along with disclosure of those earning more that £60,000, expanding this section in the trustees’ report will give you the chance to demonstrate the charity’s culture and how you look after your staff and volunteers. Some ideas to consider are:

  • Publishing pay bands for all staff.
  • Gender pay reporting.
  • Disclosing if you are a living wage employer.
  • Diversity and inclusion.
  • Professional skills and training opportunities.
  • Volunteer contributions.

Environment and sustainability

Now more than ever there is a focus on the environment and sustainability. The Financial Reporting Council has recognised this by issuing more guidance over the past few months, and large corporate charities are required to include energy reporting with details on carbon emissions in their trustees’ report. Including a simple sustainability statement will help to demonstrate that the charity is committed to the environment and sustainability.

Impact reporting

There continues to be an increasing focus on impact reporting within the charity sector. Traditional reporting methods look at the inputs and review the outcomes whilst assessing the value of the impact, but there are other ways the impact can be assessed. Here are some other questions to consider:

  • What fundraising events have taken place in the year?
  • What have you done with the resources?
  • How many beneficiaries were helped in the year?
  • What additional services have been offered?
  • How many members of the wider community have benefited from the charity?
  • How is a £1 donation spent in the charity?

It is important to give a balanced view of the good and bad in impact reporting, both for credibility and for authenticity.

Covid-19 reporting

Given the continued coronavirus restrictions, your 2021 trustees’ report should again be commenting on the impact and response to the pandemic. From discussions with many of my own clients, I know they are proud of their response to Covid-19 and this expertise should be highlighted. But, the struggles and constraints of the pandemic should not be forgotten and any reporting should refer to the increased expenditure, risks, uncertainties and impact on the operation of the charity.

Overall, how finances are communicated in the front half of your report is equally as important as the financial statements themselves. The report and accounts should present financial and non-financial information which is clear, coherent, relevant and engaging to its readers. 

 

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