Why is transparency and reporting important for charities?

April 9, 2015 at 09:22

Helena Wilkinson, Partner at Price Bailey WILKINSON Helena 

Charities have seen a lot more focused attention from the media over recent the last year on transparency. This has had a particular focus on remuneration, but has also spanned other aspects including investments, reserves and income streams – particularly government and local authority grants.

Finance leaders in charities need to carefully think about the messages and information that you disclose (and do not disclose) about your organisation.  One key aspect of this communication and interaction with the public is the statutory accounts – which are readily and freely available for most charities off the Charity Commission website. Equally there are other bodies out there, such as Charity Financials that are extracting data from such documents and portraying key data from these as facts for the public to be able to download.

Therefore, although the statutory accounts are historic, they do need your attention and focus. There are lots of various stakeholders who will look at these – from funders, donors, beneficiaries, trustees, staff and the public. Each of these will have a different level of understanding of financial information and some may only focus on the narrative part of the accounts. If someone picked up your accounts and only read the narrative, would they be able to understand your organisation, what you do, how you achieve it and what you are all about? Are you giving a clear, concise and coherent message?

Understanding how your information will be used by others and the impact that it can have on your organisation’s reputation are important challenges for finance professionals working in our constantly evolving sector. In order to achieve this, charities need to look at the key changes arising from SORP 2015 in charity reporting in the Trustees Report, particularly the new emphasis on reporting against your plans and how can you make this work for you. What are the tips to reporting effectively, clearly, concisely and still be accountable? Should you disclose more than required?

Helena will be leading a session at Annual Conference on ‘The future of reporting in the sector’ alongside Nick Kavanagh  of Friendship Works. This will give attendees to learn and share ideas about what makes for good reporting. You can find more details about the conference here.