The Charity Commission has been pleading with charities for years to ‘get to grips’ with filing their accounts on time. Now newly-published research has given charities another important reason to meet their compliance deadline, says Lucy Lernelius-Tonks.

Do you work for one of the 14 per cent of charities that failed to file their accounts on time last year? You may not feel it’s much of an issue, but what if I told you that over half of grantmakers are checking your charity’s filing history on the Commission website?

At the Directory of Social Change we have just published our latest research report Accounts Count. This has revealed that not only do 53 per cent of grantmakers check for overdue accounts, but 17 per cent of these would automatically reject an application from a charity who had failed to file on time.

If you are trying to convince someone that you will spend their money wisely it looks terrible if you can’t get your accounts in ten months after the financial year-end. This is what grantmakers have told us: late accounts show poor management and even if they don’t cause an immediate refusal, they are a ‘clear negative’ for the funding bid.

This is something that charities really need to get a handle on. Not only can it affect funding, it also looks appalling to the general public. These people also fund charities, through individual donations, and in public money through the significant tax breaks that charities receive. They deserve to know where their money is going.

Rightly or wrongly the recent media furore surrounding charity CEOs’ salaries has once again turned the spotlight on how charitable funds are being spent. Wherever you stand on this debate it remains true that this information should be published according to the statutory rules. Being transparent and open about funds is one of the pillars of best practice for charities.

This leads me onto the last, but not the least most important reason to file on time: It’s the law! These rules are in place for a reason, to protect and prove charity accountability. The Charity Commission is there to support charities to do the best they can do through proper regulation. As with most of the charitable sector the Commission has suffered massive funding cuts; charities should not be making it even more difficult for them to carry out their regulatory duties. It’s easier than ever to use the Commission’s online services so there really is no excuse!

I may seem harsh, and I am of course aware that there are genuine reasons why some charities are unable to get their accounts in on time. However, research from the Commission shows that 35 per cent of late accounts were in fact prepared and signed on time, but just not submitted. This suggests that they have been sat in someone’s in-tray gathering dust, unable to fulfil their duties to the public!

What’s more, 39 per cent of late filing charities that were companies managed to get their accounts to Companies House on time. Interestingly, Companies House fines organisations who file late. Although I do not think that charities who file late should be fined, it should serve as a warning as this was suggested by Lord Hodgson in his review of the Charities Act. In any case charities are potentially ‘fining’ themselves by damaging their funding opportunities.

So this is my message to charities; when you fail to file on time you are damaging your funds, weakening public trust and neglecting the regulations. No excuses, file on time!