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INTRODUCTION
The document which determines the format and content of a charity’s report and accounts is known as Accounting and Reporting by charities: Statement of Recommended Practice, and is often referred to as the SORP. The SORP requires charities to prepare a trustees’ report each year to accompany their annual accounts. Such a report provides an essential link between a charity’s legal purposes, its aims and objectives and the activities it undertakes to achieve them. To be meaningful, it needs to focus on information relevant
to a charity’s stakeholders; tell the charity’s story in a balanced manner, acknowledging those things that have gone well, but also those that could
have gone better. In this chapter we examine why such a report is of crucial importance to religious institute charities, who should prepare it, what it should contain and give a few examples from actual reports to illustrate how certain points can be made in a powerful and positive manner.
WHY IS A TRUSTEES’ REPORT IMPORTANT?
Charity accounts, for all but the most straight-forward of charities, are now complex documents which can extend to many pages. It is essential that someone reading those accounts, who may know nothing about the charity, understands the context to the gures and is able to appreciate how these gures relate to the work and objectives of the charity. The trustees’ report,
as a narrative document, should facilitate this understanding. It should explain why the charity was set up – what its mission is; what it does in practice to achieve that mission; describe the key achievements during the year covered by the accounts – acknowledging key successes and failures; discuss the impact of that work on the nances of the charity; and outline its future plans – in
the context of its objectives but also its nancial position. In doing this, the report should address the key risks that may impact on the charity which could prevent it from achieving its aims and objectives and how those risks are mitigated. It should also outline some of the key nancial policies applied by the charity – most importantly the reserves policy, grant making policy and investment policy where relevant. Finally, the report should detail some of the important governance arrangements of the charity such as who are the trustees, how they are appointed, how they communicate with key individuals within the charity (and the institute) and how they ful l their responsibilities.
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