Charity Reporting

As in previous years, the goal of the Charity Reporting workshop was to share good practice in reporting – and to showcase, celebrate and discuss examples from those charities that are leading the way.

An overview of this year’s award

The event was kicked off by Daniel Chan, Director and Katie Turnbull, Senior Manager in PwC’s Charities Team. They summarised the Charities Award judging process and criteria, designed to assess each organisation's commitment to building trust with the public through “open, fair and insightful reporting and communications.” An audience poll to identify the most trusted source of information about a charity saw the annual report ranked top, mirroring PwC’s research among the general public. And the reported information with the biggest effect on trust? A clear purpose and impact strategy, followed by governance and decision-making processes that foster transparency.

Turning to this year’s Building Public Trust Award for Reporting in Charities, the winner was Age UK for the second successive year, with Oxfam and the NSPCC highly commended. Daniel commented that the rising quality of reporting at the top end was making it increasingly difficult to pick out a shortlist, making 2022 the most challenging year so far for the review team. However, he added the lower-ranked reporters had shown very little improvement over the eight years that this award has been presented. “So there's definitely movement at the top end, but not across the board,” he summed up.

A perspective from the winner

The audience then heard some fascinating insights from this year’s winner, in a wide-ranging question-and-answer session with Vicki Thornton, Chief Financial Officer of Age UK. Drawing on her experience, Vicki emphasised the need for charities to think beyond the immediate pressures of the audit and ensure their reporting engages with their stakeholders. Also key is striking the right balance between making the reporting readable and complying with the relevant regulations. “Obviously you have to be compliant, but it's so much about the readability,” she explained. “If someone outside of finance can't understand the reporting, it's not doing its job.” Asked what she was most proud of about Age UK’s award-winning report, she replied: “I think we have genuinely produced a document that older people will relate to. It's about our beneficiaries.”

Questions to Vicki from the audience addressed a broad array of topics, including why Age UK had decided to consolidate its previous two reports into one document, and what steps it takes to understand who reads its reporting. Another attendee asked about how charities can make their communications more accessible to a wider audience. In response, Vicki stressed the importance of signposting. “Most people who read annual reports don't read them cover-to-cover,” she said. “They know what they want in terms of the information they're looking to gather, whether it's the stories, the impact, the financials, the governance arrangements, the principle risks. So [the question is], how can we better signpost those sections so they’re easily accessible?”

Real-world examples of best practice from across the sector

Building on Vicki’s insights, Katie and Daniel then showed and discussed several examples of best practice from various charity reports reviewed for this year’s award. Attributes they singled out included creating a clear linkage between the charitable objectives set out at the beginning of the report and the narrative reporting throughout; making smart use of graphics and layout to communicate the charitable purpose and strategy – including vision, principles, values and impact – on a single page; and setting out the charity’s long-term goals alongside the actions being taken towards achieving them in the current year.

From there, the discussion shifted to the emerging focus areas in this year’s reporting that are likely to continue and grow in the next. These included metrics on diversity and inclusion, including gender and ethnicity pay gaps, and on ESG impacts, primarily environmental. Daniel commented: “One of things that we commonly see is that environmental disclosures are most prominent in charities with the environment as one of their charitable objects. But, I would put it to this audience and to others that environmental disclosures are not just for environmental charities, but actually for the sector as a whole.” There was also a reinforcement of the fact that the ‘S in ESG’ is what charities inherently do, and this represents an opportunity for charities to be an example to organisations beyond the sector. Further evolving areas include clearer explanations of how stakeholder engagement has impacted decisions, and reporting on risks and compliance with the Charity Governance Code. There will likely be a focus on the impact of the external environment on the work of charities in the upcoming reporting cycle, not least around cost of living.

The session closed with a look forward to wider developments, most notably the current charities statement of recommended practice (SORP) development process and review of the FRS102 standard underlying it. A senior executive from a leading charity made an impassioned plea for all charities to participate in the upcoming consultations and make their voices heard. Another forthcoming development highlighted was the move currently underway to develop International Non-Profit Accounting Guidance as part of the IFR4NPO initiative, which may be relevant for charities working internationally.

Transparency and trust are converging

The main themes emerging from the workshop? Summing up, Daniel singled out “care and passion”. He continued: “You're here for a reason. You care about your reporting, your communication, and how you interact with your stakeholders. Let's make that infectious and get more people engaged in this topic.” PwC is committed to providing forums, including our BPTA workshops, to help this to happen. To find out more, please feel free to contact PwC’s reporting team. The future of reporting by charities is taking shape. Together, we can build it.