We have responded to the Charity Commission’s consultation on a number of proposals to change next year’s annual return. Currently, all registered charities with annual incomes of more than £10,000, and all charitable incorporated organisations, must file their annual returns to the Commission within 10 months of the end of their financial years. The proposed changes would mean that in future charities will be required to update their ‘fundamental information’ in ‘real time’ and no longer through the annual return submission.
The Commission have committed to a fundamental review of how they collect and display information publicly over the next two years, so these consultation proposals are the first stage of that review. Their aim is for the process of collecting information to be more targeted and to reduce the burden on charities providing the information. The questions in the return will not change at this stage, but will be regrouped to match the Commission’s risk priority areas.
We have always said that the regulation of charities needs to be simple and proportionate; this also applies to the information collected by the Commission. We are asking the Commission to ensure that the process strikes the right balance between the need for transparency and the burden placed on individual charities that are filling in the annual return. It is important to ensure that the right information is provided by charities and made publicly available.
So while we support the Commission’s aims, in our response we raise some concerns and ask the Commission to provide further clarity on a number of key questions. For example:
- What information is ‘fundamental information’?
- How frequently will charities be expected to update the information (what does the Commission mean by ‘as soon as they can’)?
- How will this process relate with/be different from serious incident reporting?
- How will the Charity Commission ensure that all charities comply with the requirement to update in real time?
On a more practical note, we also recommend that the Commission clarify and publish the questions that they will ask charities, and for them to make sample forms available in advance of requiring submissions.
In preparation for our response to these proposals, we collaborated with the Association of Charitable Foundations (ACF) and Charity Finance Group (CFG). We found many common themes in our thinking, such as minimising burden on charities, recognising the need for transparency, and urging greater clarity on how this process fits in the context of serious incident reporting.
Following this stage of the Commission’s review of the information collected, we expect another consultation for the 2018 annual return at the end of this year/beginning of next year, so watch this space.