Category: Charity

2017 Round-up: the highs and lows of charity disclosure so far

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Benefacts warmly welcomed the report of the Carmichael Centre’s annual Good Governance Awards, announced on 16th November during the Charities Regulator’s Trustees Week.

The awards celebrate high standards in published disclosures by charities, and make a direct connection between good governance and clear, transparent public information.

Use Benefacts to review the annual reports of the short-listed and winning charities in each category:

Category 1 – Organisations with an annual turnover of less than €250,000

Category 2 – Organisations with an annual turnover of between €250,000 and €1million

Category 3 – Organisations with an annual turnover of between €1million and €5million

Category 4 – Organisations with an annual turnover of over €5million

 

Trend in abridgement continues

At the same time as welcoming best practice at one end of the spectrum, we are disappointed to report that the number of incorporated charities that have prepared audited financial statements, but elected to publish these in an abridged form, now exceeds 34%. (We are still keying 2016 accounts so it possible this total percentage could change. Right now, the level of abridgement for all incorporated nonprofits – whether charities or non-charities – stands at 40%).

The filing of abridged accounts by companies limited by guarantee is now permitted under the Companies Act 2014. The choice to file accounts in this limited form represents a decision on the part of the members of these companies to withhold a significant body of financial transaction information from the public.

Given the findings of the recent Amárach survey – published at the recent CII conference – showing that public trust in charities is still very low, it seems that charities are not acting in a way that promotes their self-interest. How can you expect people to trust you more when you tell them less?

 

List of charities publishing abridged accounts

For a list of those charities that have filed abridged accounts for 2016, click here.

To see the 2015 list, click here.

And for the small number of charities that are bucking the trend, by reverting to full published financial statements in 2016 – having previously published abridged ones – see here.

SORP adoption in Ireland

SORP or SORP-ish?

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Most people in the nonprofit sector are by now aware of Charities SORP.  This is a standard for financial reporting specifically devised to make the financial transactions of charities more transparent especially in terms of how and where charities have raised their funds and how the funds have been used.

Adoption of charities SORP is promoted as best practice by sector leaders and it forms one piece of the “Triple Lock” standard.  This is seen by the Charities Institute of Ireland as fundamental to restoring trust in charities (the other two elements of the triple lock are the Governance Code and the Statement of Guiding Principles for Fundraising).

Benefacts is the only source of information about which charities use the SORP standard in Ireland, where its adoption is still voluntary.  The Charities Regulator will be coming out soon with a mandatory financial reporting standard for Irish charities, generally expected to follow the FRS 102 Charities SORP quite closely.

By reviewing what all charities actually report in their annual published financial statements, Benefacts is able to provide a detailed picture about the emergence of higher reporting standards, which has never been available before now.

Currently, 488 organisations in the Benefacts database of Irish nonprofits say that they follow the charities SORP reporting standard. But on closer inspection, 87 of these have chosen to adopt some of the features of SORP and only 401 can in fact be seen to be fully in compliance in terms of the accounting policies as specificied by the SORP-making body authorised by the Financial Reporting Council (FRC).  Benefacts has used this compliance standard as verified by the entity’s auditors as the benchmark for reporting Charities SORP compliance in the future.

Interestingly, a handful (17) of nonprofits that have adopted Charities SORP are not yet publicly registered as charities in Ireland.

In 2015, the total number of SORP reporters whose accounts are publicly accessible represented 9% of all registered charities. Here’s the list.  We’ll report on trends in SORP adoption again in our 2018 Sector Analysis Report.

Benefacts.ie is the only source of up to date analysis of all nonprofits (charities or otherwise) adopting the three standards (SORP, Governance Code and Statement of Guiding Principles for Fundraising). Use the facets on the left-hand side of the Benefacts search results screen to select which reporting standard you’re interested in – see image for example.

Benefacts nonprofit sector annual analysis 2017. (LtoR) Ian Brady, Head of Davy Charities and Not-for-Profit Group, Niamh Gallagher CEO Drinkaware and Diarmaid O'Corrbui, CEO Carmichael Centre

Ian Brady comments on how essential it is to measure the impact of this sector

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‘It’s a huge quantum of the sector that no one has been covering’

Ian Brady, Head of Davy Charities and Not-for-Profit Group, Davy Ireland, commented on how refreshing it was to have access to the most up to date information on the sector, and how he thinks this report will gain momentum in the years to come as a measurement of the impact of this sector on society. Listen to what he had to say here.

Mary Sutton on why detailed data is essential for informed discussions about nonprofits

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‘It’s importance will grow year-on-year-it’s a really important input into an informed conversation about where we want to go’

Mary Sutton, Country Director for the Republic of Ireland at The Atlantic Philanthropies, attended the Sector Analysis launch and commented on the timeliness of this information, and how the detailed trend data will help inform discussion about nonprofits, charities and philanthropies in Ireland.