Public Benefit Reporting

All charities must prepare a Trustees’ Annual Report. Our publication Charity reporting and accounting : the essentials April 2008 (cc15a) provides more details about the purpose and content of this report. These pages describe the new duties to report on public benefit and the further guidance we have provided for trustees on meeting these requirements.

What are the requirements for reporting public benefit in an annual report?

A Trustees’ Annual Report which covers any period starting on or after 1 April 2008 must include :

1. a report of those activities undertaken by a charity to further its charitable purposes for the public benefit;

2. a statement by the charity trustees as to whether they have complied with the duty in section 4 of the Charities Act 2006 to have due regard to public benefit guidance published by the Commission.

What support is available from the Charity Commission to help with this new requirement?

Our expectations for reporting of public benefit in charity annual reports are set out in section G of Charities and Public Benefit.

We are also updating our example Annual Reports and accounts to help trustees as they approach these new requirements. We have explained below the approach we have taken to public benefit reporting in these examples. You will also find guidance and links to specially adapted versions of these example reports to demonstrate this approach.

What approach to public benefit reporting has the Commission taken in these examples?

The approach we have taken is based on section G of Charities and Public Benefit. Whilst that guidance does not set out mandatory reporting requirements, it does explain the two key principles which need to be met in order to show that an organisation’s aims are for the public benefit. These principles are:

• There must be an identifiable benefit or benefits.
• Benefit must be to the public or a section of the public.

The approach we have taken is to demonstrate in the example reports how the charities have addressed these two principles. To do this, we have used information which would already have been included in an Annual Report before the public benefit reporting requirements were introduced and presented it in a way which makes clear what the benefits were and who was able to benefit.

You can see how the text in our examples meets the public benefit reporting requirements by looking at the following:

• Charities and Public Benefit - Example Annual Reports (Interactive PDF)

At the front of each example you will find the public benefit principles; just click on each principle to see the text which relates to it. You will see that in the case of Dorsetshire Drugs Advice Centre we have set out both key principles together with the related sub-principles; for Westbeach Youth Centre, we have just set out the two key principles because this is a small charity and the reporting requirements are less detailed.

Will further examples be made available?

We will be adding other updated examples to our Public Benefit section, over the forthcoming months to complement the publication of supplementary sub-sector guidance.

Those who wish to view the updated Annual Reports and annual accounts together can do so on our accountancy pages.

How can trustees apply this approach to their own charities?

We would suggest that as part of the process of assembling the information to include in their report, trustees consider each of the principles (and, in the case of auditable charities, the sub-principles) and check that the report addresses each aspect. The amount of detail required will vary according to the charity and how it operates.

Is the approach taken to public benefit reporting in these examples the one set down in law?

Beyond the reporting duties described above, there are no detailed legal requirements; it is for trustees to decide how best to report on public benefit. Our approach does not create any new set of legal principles for public benefit reporting; it does however show one method which trustees can use to report on public benefit in a way which:

• meets the requirements satisfactorily;
• minimises the amount of further material by using the information which trustees were already required to include before the new public benefit reporting requirement was introduced;
• demonstrates how the charity is for the public benefit to anyone who reads the accounts.

Is a charity’s Trustees’ Annual Report used to decide whether or not it is established for the public benefit?

No. Although these reports should provide readers with a good understanding of how charities have pursued their purposes for the public benefit, the Charity Commission does not make judgements about a charity’s status purely on the basis of the Trustees’ Annual Report. These reports can however be used to identify whether or not there may be causes for concern about public benefit.