Our Charities Award, as part of PwC’s Building Public Trust Awards, recognises charities in the Charity Finance ‘Charity 100’ Index for reporting which embraces the principles of clarity, openness and authenticity.
With many charities having faced difficult circumstances during the COVID-19 pandemic, including higher levels of demand for their services while having lower levels of resources available, it has never been more important for them to share the journey that they have been on - the highs and the lows, the successes and the challenges. This included a number of charities needing to take tough decisions and reflect on the key priorities to take forward in order to best meet their charitable purpose and maximise their impact.
The winner of our 2021 award, Age UK, clearly sets out its charitable purpose, strategy and achievements in their reporting for the year ended 31 March 2020. The way in which their year was contextualised was a real strength. Against each objective, the charity uses the framework: ‘this is now, that was then, the future’. ‘This is now’ discusses the pandemic, both the impact on their stakeholders and the actions the charity has taken; ‘That was then’ discusses the financial year under review; and ‘The future’ looks at their 2021 strategy and beyond. For each objective, the reporting also provides a ‘staff Q&A’ which has served to enhance the reporting. This was successful in demonstrating their charitable purpose against the backdrop of the challenges that they had faced.
The reporting by St John Ambulance for the year ended 31 December 2020 was refreshingly open and honest, and gives an authentic view of their year - highlighting ‘what made us proud’ and ‘what made us reflect’. There was clear discussion around their financial context and the difficult choices that they had to make. In addition to focusing on the charity’s work during the pandemic, there is also recognition of how the charity has continued their ‘business as usual’ activities alongside the many different areas in which they have had to adapt.
Save the Children UK’s reporting for the year ended 31 December 2020 has detailed reporting on key areas of focus. This included a clear and detailed narrative in relation to the charity’s response to COVID-19 and the climate crisis. It also covered their approach to diversity, inclusion and anti-racism and gave a view as to the seriousness with which the charity takes safeguarding. This was particularly important in the wider context in which the charity operates.
The Trustees’ Annual Report is an important way in which charities communicate their charitable purpose, achievements and future plans, as well as providing an opportunity to demonstrate their financial resilience.
- Clarity of purpose
It has never been so vital for charities to be clear about what they do, why they do it and what difference their work makes. It is often hard to compare given the breadth and diversity of the charity sector, particularly among the largest charities, therefore it is important that charities invest in how they communicate their purpose and demonstrate their value to their stakeholders, beneficiaries, staff and volunteers, funders and wider society.
- Alignment of strategy and impact
At the heart of their reporting is a clear focus on purpose and impact. This is critical in telling a clear and engaging story about the ups and downs of the charity’s year, and indeed beyond the reporting period when charities continued to navigate the pandemic. Charities should consider how their narrative reporting ties their achievements into their priorities and how this aligns to the purpose.
The way in which charities have navigated the pandemic, including how they have maintained their financial sustainability, has been critical. Charities should embrace openness and authenticity in their reporting, with a refusal to shy away from reporting on difficult issues and decisions, helping to build trust and improve transparency in the sector.
It is becoming increasingly important for charities to be open and honest about how they approach key societal issues, including, where relevant, their approach to fundraising, responsible investments, safeguarding as well as environmental and sustainability considerations. The way in which charities determine and disclose the remuneration of senior management is also in the spotlight.
Recent research published by the Charity Commission for England and Wales shows that public trust and confidence in charities has risen in the past couple of years. Charities staying true to their purpose is at the heart of this, and it remains critical for charities to communicate and engage effectively with their key stakeholders in ‘walking the talk’, ‘living their values’ and demonstrating their contribution and impact to their beneficiaries and wider society.