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Most annual reports fall short on public benefit reporting, Charity Commission finds

By David Ainsworth, Third Sector Online, 5 July 2011

Charity reports

Charity reports

Report suggests many trustees are unaware of public benefit requirements for charities

Nearly nine out of 10 charity annual reports do not comply with the law on public benefit reporting, according to research published yesterday by the Charity Commission.

Public Benefit Reporting by Charities revealed that only 11.5 per cent of charities had published legally compliant public benefit reports.

The study, conducted by Professor Gareth Morgan and the chartered accountant Neil Fletcher, academics at Sheffield Hallam University’s Centre for Voluntary Sector Research, also found that 38 per cent of annual reports were "draft documents" that had not been properly approved by trustees. Nine per cent of charities had not drawn up annual reports at all.

The report said that many trustees had not read public benefit guidance. Some only discovered it existed after being contacted by the researchers.

The research was based on a sample of just over 1,400 charities, divided into four roughly equal income groups: more than £500,000; £100,000 to £500,000; £25,000 to £100,000; and less than £25,000.

The accounts of the first three groups were selected at random from the commission’s website, and those of the fourth group were obtained by writing to the charities.

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