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Charities continue to fall short on reporting purpose and finances

Many charities are still failing to properly demonstrate that they provide a public benefit, and many do not publish proper accounts, according to the Charity Commission.

In a report released on 20 December, the regulator says just 52 per cent of 105 annual reports for 2016 from charity trustees showed a “clear understanding” of the importance of reporting a public benefit from the charity’s activities. In a second report released on the same day, the commission warns that only 70 per cent of 2016 accounts from these charities “met our basic benchmark”. Both reports check criteria that are legal requirements for charities.

Nigel Davies, head of accountancy services at the Charity Commission, said, “The trustees’ annual report and accounts are a key way to build confidence among supporters, so many charities are clearly missing an opportunity…We also need to see a step-change in trustees’ attitudes to public-benefit reporting. It is disappointing that nearly half of charities fail to explain the activities they undertake and the impact they have.”

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