Blog post: Making the most of the Trustees' report

By Fiona Muldoon

Compliance Manager

Charity Commission for Northern Ireland
 
Under new regulations, introduced in January 2016, all registered charities are now required – amongst other things – to submit a Trustees’ annual report to the Charity Commission for Northern Ireland each year, along with their charity accounts.

For some, this report (also known as an annual report) will be nothing more than a legal requirement – another piece of red tape that must be produced.

However, the Commission would argue that this is actually doing the report a disservice. Yes, it must be prepared and submitted to the regulator – there is no getting away from that. However, if used correctly, the Trustees’ annual report is much more than just another document. It is a vital communications and public relations tool

Here’s why – and how you can use it to its best advantage.

1.   Take stock

Running a charity is a responsible and challenging business. It can be easy, amongst all that paperwork and decision making, to forget about the everyday work going on. Preparing a Trustees’ annual report is an important milestone – a chance to take a step back and reflect on the charity’s achievements, as well as the difficulties and challenges, over the previous year.

2.   Give your charity a round of applause

The Trustees’ annual report is a perfect opportunity to let the world know all the activities, successes and milestones your charity has achieved – and for you, your staff, volunteers and beneficiaries to feel justifiably proud. Running a charity is not always an easy task – take the time to reflect on your successes, to congratulate those who were involved and let the charity regulator and everyone else know how great you are.
 
3.   Painting a picture

Financial accounts alone do not always provide all the information a reader needs to gain a full picture of the charity, and what it has achieved over the course of a year. For example, they can’t easily explain:

• what the charity has done – its outputs
• what the charity has achieved – its outcomes
• what difference the charity has made – its impact and benefits.

Coupled with annual accounts, the report aims to give readers a better understanding of what the numbers mean, both for the charity and its beneficiaries.

4.   The importance of transparency

In today’s world, information is key – and transparency is a vital part of running a charity in which the public has trust and confidence.

Again, the Trustees’ annual report has an important role to play. Not only is it an opportunity to highlight the charity’s activities during the year, but it also provides important administrative information, including:

• where the charity is based
• who the charity trustees are
• information on the structure, governance or management arrangements of the charity 
• activities undertaken by the charity to carry out its purposes for the public benefit.

5.   Keeping it focussed
 
Public benefit is at the heart of what makes an organisation a charity. By reporting on public benefit, charity trustees identify that their charity is effectively doing what it was set up to do and is making a positive difference to its beneficiaries.
 
We’ve had feedback from charities that the requirement to report on public benefit through the Trustees’ annual report has helped them identify where they may have strayed from what the charity was set up to do – so they can get back on track.
 
Reporting on public benefit through the Trustees’ annual report, when done well, can be an effective tool for charity trustees and help them to stay focused, or re-focus, on what the charity is there to achieve (its purposes) when planning activities.

6.   Looking back

The introduction of the new regulations mark the first time registered charities will be required to submit a Trustees’ report, along with other required documentation, to the Commission every year. As time goes on, this will support the charity in building up a library of annual reports, which can be accessed for research, information or communications purposes as and when required. 

The level of detail required in the Trustees’ annual report depends on the size and nature of your charity. There is, however, certain key information that must be included in reports prepared by all charities, irrespective of their size or the nature of the charity.

For more information on preparing a Trustees’ annual report, including what it must contain and what the Commission does with the information you provide, see the Commission’s guidance ARR08 The trustees annual report and public benefit reporting, available here.