30 August 2011

The Importance of Public Benefit in Annual Reports

Since 2008, registered charities have been required to include a report on how the charity is meeting the public benefit requirement in their Trustees’ Annual Report. Registered charities must explain what their charitable aims are and what they have done to carry out these aims, in addition to an explanation of who the intended beneficiaries are and how they have actually benefited in practice.

In order to discover whether charities were meeting this requirement, the Charity Commission commissioned Sheffield Hallam University to carry out independent research.

The research concluded that whilst many charities provided an adequate description of their aims and activities, they were less good at explaining how their beneficiaries actually benefited. Smaller charities in particular struggled with this element. It is acknowledged that reporting requirements may be more difficult for smaller charities that do not have access to the specialist advice available to larger organisations. However, the Charity Commission have produced guidance and example reports to assist trustees in meeting this requirement. These can be accessed here.

Why is Public Benefit Reporting Important?

Public benefit reporting is important, and not only because it is a legal requirement.

Taking the time to consider the charities’ aims, activities and actual impact will benefit the charity itself in the long term. It enables those in charge to reflect on their work and evaluate how successful it has or has not been, allowing for changes to be made. Additionally, it is an opportunity to show supporters and potential donors what the charity has been doing with its donations and how this has impacted the target group. In the current economic climate, it is more important than ever to show the public why they should continue to support the charitable endeavours.

Category: Article