What makes a good trustees report?

What should be included in the Trustees’ Annual Report?

We are often being asked by charity trustees what the annual report included with the year-end accounts should include. Whilst the Charities SORP refers to what ‘must’ be included, it also refers to what ‘should’ be included as best practice, so it is important to distinguish between the two.

As professional advisors we ensure that the trustees report includes all the ‘musts’ and any figures included agree with the numbers per the accounts. We pride ourselves on working closely with our clients, so we have a great understanding and knowledge of the charities activities, and therefore look to confirm the trustees report is giving a fair representation of the charities past year.

For small charities¹ the trustees report can be much simpler and must therefore include:

• The charity’s name, registration number, address, and trustee names
• The structure and details of how your charity is managed, including how it recruits trustees
• The objectives and activities undertaken in the year
• Any achievements in the year and overall performance, including reporting on its public benefit
• A financial review including any debts and details of your reserves policy (if applicable). We will work with you to ensure this information is accurate.
• Details of any funds held as a custodian trustee if applicable

For larger charities significantly more is required to be disclosed, and if your charity requires a statutory audit there are further elements required to be included.

Specific areas we often flag for trustees to ensure that are explicitly covered within their report are:

1. Public benefit statement
   The purpose of this is to help readers of the report understand why the charity does what it does, i.e. what the charitable purposes of the charity are, and how the activities of the charity have helped carry out those purposes. It is important it is clear that any decisions made by the charity have been taken with the public benefit guidance into account.
2. Fund raising standards information (if an audited entity) – we would be happy to discuss this with you as the information will need to be relevant to your charity.
3. A clear reserves policy statement
   This should set out the required/desired reserves levels, linked to the actual reserves held by the charity, and in particular compare current reserves to target reserves and plans to address any difference between the two.

What makes a great trustees report?

With many charitable clients we see a lot of trustees reports, and whilst the report needs to include the essential elements as detailed above, a great trustee report can include so much more.

One thing we have been mentioning to clients recently, particularly for larger charities, is to think about adding a chairman’s statement at the beginning of the Trustee report. This is a powerful way of communicating the charity’s vision and can help to put a voice to the charity and report.

We see some truly excellent reports with pictures of activities that have taken place during the year, tables and graphs to summarise the accounts, and photographs of people engaging with the charity.

Often involving communication managers or marketing managers can be helpful. More and more users will be looking at the accounts on screen so the visual impact at the beginning of the accounts is vital. There is an increasing need for reports to be more ‘digitally friendly’ and engaging for the reader as more people view them on screens, so this is something to ensure you bear in mind.

How can we help?

If you want further guidance specific to your charity and what needs to be included in your trustees report, get in touch with your current Wenn Townsend contact or email me to discuss further.

Deborah Pluck, Partnership Chair

¹ Income under £500,000 and assets worth less than £3.26m