Updated guidance on audit rules for charities from Fundraising Regulator

Charities subject to the reporting requirements of the Charities (Protection and Social Investment) Act 2016 (the “Act”) for fundraising should be aware that the Fundraising Regulator has updated its guidance to help them meet those reporting requirements.

Who has to comply with the reporting requirements?

Charities registered with the Fundraising Regulator and with income of over £1 million are required to include statements on their fundraising activities in their annual report, but the regulator considers it good practice that all charities that produce an annual report address these statements regardless of fundraising spend.

Why has the guidance been updated?

A review of charities’ compliance with the fundraising reporting rules published by the regulator, however, revealed greater compliance by those subject to the reporting requirements in some areas than others.

Key figures in relation to the annual accounts reviewed include:

• 81 per cent of charities included a statement in their annual report about their fundraising approach, and
• 67 per cent of charities included a statement about the regulation and / or schemes they had to adhere to, and no reports mentioned any failure to adhere to any regulation or scheme, but
• only 59 per cent included a statement on the number of complaints received in relation to fundraising in the last twelve months, and
• only 41 per cent of the reports contained a statement on monitoring the fundraising activities of a third party on behalf of the charity, and
• only 40 per cent of reports included a statement on what the charity had done to protect vulnerable people and other members of the public while fundraising.

In total, only 21 per cent of the reports reviewed complied with all six of the fundraising reporting requirements.

What should charity trustees do now?

If your charity is registered with the Fundraising Regulator and has income of over £1 million, be aware of your legal duty to ensure your charity complies with the requirements of the Act in relation to fundraising.

Be familiar with the reporting requirements applicable to fundraising - details of the requirements can be found in section 2 of Annex 1 to the Charity Commission’s guidance on trustees’ duties in relation to fundraising.

Make use of the updated guidance from the Fundraising Regulator, which now includes clear and detailed information for charities on how to write the clear and detailed statements on fundraising required by the Act.

The guidance seeks to explain the reasoning behind and the importance of compliance with each of the requirements in turn, to make it easier to understand what information is required in the annual report.

While seeking not to be prescriptive, the guidance also seeks to provide some helpful suggestions as to how to approach the writing of the statements, for example, highlighting that including all the statements in one section can make it easier for the reader to understand the charity’s approach to fundraising and to ensure compliance with the Act’s reporting requirements.