Bringing your Trustees’ Report to life

The Charities SORP (the 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 to life the Trustees’ Report and there is the opportunity to align the messaging with other marketing tools such as the charity annual report 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.

Reorder the financial statements

How many of your financial statements include the reference and administrative details at the start of the report? Is this really the most important and interesting section? Most likely the answer is no, so why do we see these as an opening rather than making a stronger first impression that captures the essence of the charity? Whilst the SORP is prescriptive in the information it requires; you do not need to follow the format in the same order. For the non-financially minded (and financially minded), a set of financial statements is not going to be the highlight read of the day, so it is key to make sure you have the important and interesting information close to the start, and use this to emphasise the key messages early on in the document.

Chair’s report

Following on from reordering the financial statements, often a Chair’s Report at the start of the financial statements is the perfect way to provide a concise overview of the year, the achievements, the struggles and the future plans. A personalised message will often have a more pertinent impact and can capture the heart of the charity’s messaging.

Bringing the financials to life

Not everyone reading your financial statements has a financial background, but there are lots of ways to bring to life the financial details. It could be 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 bring to life the financial performance and make it easier to align with the objectives, activities, achievements and performance for the year.

Beneficiaries’ stories

Do not underestimate the power of using beneficiaries’ stories, photos or images in the Trustees Report. Hearing directly from the beneficiaries, volunteers and staff can not only bring to life a set of financial statements, but it helps to add the personal touch to portray the key messaging from the charity. Much like you will include videos and photos on your website, using this information can help to clearly demonstrate the impact, achievements and performance.

People reporting

A new theme we are seeing in the charity sector is how people report on their people, in particular around remuneration. The people are fundamental for charities and this is reflected by staff costs 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:

• Pay bands for all staff
• Gender pay reporting
• 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 with climate change being one of the biggest issues we are currently facing. Increasingly we are seeing this focus by charities and no doubt this will continue to grow. 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. I know a lot of trustees are already having these discussions; including a simple sustainability statement will help 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 that are worth considering:

• 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 £1 donation spent in the charity?

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

COVID-19 reporting

Given the continued restrictions your 2021 Trustees’ Report should again be commenting on the impact and response to COVID-19.  We have seen many charities responding quickly to the pandemic and providing new opportunities of support. 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. Despite these positive stories, the struggles and constraints of the pandemic should not be forgotten and any reporting on COVID-19 refer to the increased expenditure, risks, uncertainties and impact on the operation of the Charity.

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.