Charities that file their accounts late endanger their chances of securing funding from grant-makers, says new research by the Directory of Social Change.
Seventeen per cent of respondents will immediately refuse an application for funding if a charity's accounts are late. Eighty-three per cent will contact the applicant for an explanation.
One grant-maker interviewed for the report told researchers: "It is prima facie evidence of poor management, which may indicate that the organisation will not manage the grants we make effectively."
Many of the grant-makers says that late accounts would be taken into consideration with the rest of the information in the funding bid, the report says.
The second-largest funder surveyed, the Lloyds TSB Foundation for England and Wales, rejects applications if the charity’s report and accounts are overdue, and this is stated in its eligibility criteria.
Lucy Lernelius-Tonks, the DSC researcher who wrote the report, said: "Fundraisers may not realise how much this is affecting their funding. Filing your accounts on time is a simple way of increasing your chances of success with funders."
She urged grant-makers to tell charities they check accounts filing in their application process. "If you reject an application because of late accounts, tell them or they won’t be able to improve," Lernelius-Tonks added.
Neville Brownlee, head of first contact at the Charity Commission, is quoted in the report as saying trustees should be aware that filing their accounts late reflects badly on the reputation of their charity, can be an obstacle to fundraising and undermines public trust in the sector.
"This is an avoidable problem that the non-compliant charities need to get to grips with," he says.