New research on charitable foundations’ views of charity accounts

The Association of Charitable Foundations (ACF), Scottish Grantmakers (SGM), and Philanthropy Ireland, have jointly published findings of their Survey of Charitable Funders’ Views of Accounts prepared under the Charities SORP.

The survey provides a detailed insight into the ways that charitable foundations use SORP accounts (defined below) submitted by applicants to support their funding decisions. Responses came from a broad range of grantmakers funding to recipient charities of all sizes across all four UK and Ireland charity jurisdictions: England & Wales, Scotland, Northern Ireland and Ireland.

Its findings include:

  • SORP accounts are considered very thoroughly, with a mean time of 27 minutes to review each set of accounts and the associated trustees’ annual report (TAR).
  • Almost half of respondents (49%) felt there was unnecessary complexity in the SORP, making it harder for grantmakers to use SORP accounts in their decisions.
  • A clear majority (59%) of respondents would like to see more simplifications of the SORP for smaller charities.
  • The most valued features of SORP accounts are:
    • the narrative TAR provided alongside the accounts;
    • the Reserves policy in the TAR; and
    • the note of major sources of income

This report is part of ACF and SGM’s involvement in an ongoing ‘SORP Engagement strand, convened by the four regulators (OSCR, CCEW, CCNI and the Irish Charities Regulator) across the UK and Ireland to inform the work of the SORP Committee (of which ACF is a member). The group looks at issues in the future development of the Charities SORP from the perspective of donors and funders who use charity accounts in funding decisions. Our hope is that these findings will contribute directly to the next version of the SORP (probably in 2023/24). 

About the Charities SORP

The Charities Statement of Recommended Practice (SORP) gives a framework for accounting and reporting, designed to:

  • help charity trustees meet their legal requirement for their accounts to give a true and fair view
  • encourage consistency in charity accounting standards
  • give recommendations for charity annual reporting

All charities must use the SORP to prepare their accounts unless the trustees have opted to prepare receipts and payments accounts and their charity is a non-company charity which had an income of £250,000 or less in the reporting period.

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