Frank Learner of Greengage Associates at the Wales Third Sector Funding Conference 2014.

1. Making the most of your
Annual Report for Fundraising
Presenter:
• Frank Learner
Greengage Associates
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Greenga
ge
-
Associat
es-
01446 700183 www.greengageassociates.co.uk

2. Annual Report - A Better Ask?
Theme: a charity’s annual report is another valuable
opportunity to deliver your fundraising message.
Extracts from Canadian charity fundraising website:
• Annual reports are notoriously dry and dull - yawn!
• Many charities haven't adequately explored the purpose
and benefits of their annual report.
• Too often, annual reports broadcast 'everything we did
this year and how great we are‘.
• Lost opportunity to reconnect your audience to why
what you do matters, not how much you do.
Any different to the UK?
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3. Covering today
• SORP 2015 changes.
• What funders expect
from the annual report.
• Structure and style
options.
• Recent award winning
reports.
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4. SORP 2015 - Context
• Planned 5-yearly review of SORP 2005 delayed for
Financial Reporting Standards (FRS) update.
• Two SORPs (out 16 July 2014) available to charities:
• Planned 5-yearly review of SORP 2005 delayed for
Financial Reporting Standards (FRS) update.
• Two SORPs available to charities:
• FRS 102 - applies to UK and Ireland; contains
specific reference to public benefit entities.
• FRS for Smaller Entities (FRSSE).
• FRS 102 - applies to UK and Ireland.
• FRS for Smaller Entities (FRSSE).
• Modular: easier to identify smaller charity elements;
smaller = below audit threshold (income £500k - now).
• In force for period starting on or after 1 Jan 15.
• This session covers just the FRS 102 SORP.
• Modular: easier to identify smaller charity elements.
• In force for period starting on or after 1 Jan 15.
• This session covers just FRS 102 SORP.
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5. SORP 2015: FRS 102 or FRSSE?
FRSSE SORP
• Optional for qualifying charities - any 2 of 3 criteria:
• Income < £6.5m (?? 2016: £10.2m).
• Balance sheet total < £3.25m (?? 2016: £5.1m).
• Staff < 51.
• Broadly allows continuation of current practices.
• Significant update likely from 1 January 2016.
FRS 102 SORP
• Mandatory for FRSSE-ineligible charities.
• Significant changes to required detail.
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6. FRS 102 SORP - Significant Changes
• Sofa headings simplified - see handout.
• Cash flow statement mandatory for all charities.
• New terminology:
• ‘Must’, ‘Should’ and ‘May’.
• ‘This SORP requires …’ - additional to FRS 102.
• Reserves policy - greater explanation: derivation
and comparison of amount with target.
• Risk management statement: description of principal
risks, management plans and financial impact.
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7. FRS 102 SORP – Other Changes
• Executive remuneration: derivation of pay and
benefits disclosure for ‘key management personnel’.
• Related party transactions: tightening of definition
and exemptions - eg disclosure of donations.
• Strategic Report for charitable company above
FRSSE threshold. Group higher level narrative into
discrete part of TAR; extra signature required.
• Grantmaking disclosure: details of grants made to
institutions can be given on web to avoid long Note.
• Social investment policy explanation.
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8. FRS 102 SORP- Basically Unchanged
• Legacies.
• Reserves definition.
• Public benefit.
• Balance sheet.
• Restricted funds.
• Ethical investment
approach.
• Donated goods for resale.
• TAR - structural freedom.
• Performance against
objectives including
material fundraising
activities.
• Educational fundraising
activity as charitable
activity spend.
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9. Funders View of SORP
• Robust framework vital for continuing support and
confidence in charities.
• Form of comparability across a diverse sector.
• Do not radically change the accounting
requirements - now well established.
• Bare compliance not enough to tell funders what
they need to know. Stating achievements and
adopting a story approach with non-financial info is
the best way to explain the accounts.
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10. Deliver a Joined-up Report
• Critical importance of charity ‘story’ where accts
are linked to non-financial performance info.
• Need for a much more intimate narrative, as
accounts may not actually tell very much.
• Performance measurement and reporting can
be difficult, but key to use performance-based
track record to justify what is to be achieved.
- Activities: same in narrative & accts.
Tips: - Powerful examples.
- Performance Indicators.
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11. Explaining Charitable Activity
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12. Looking Back or Forward?
• Balance of narrative should be 75% back and
25% forward.
• Funders build on stewardship and track record,
and want to know what you do well. Future
plans and aims are not facts.
• Evidence sought includes:
• Capability to achieve funder’s goals.
• Capacity to manage funder’s investment well.
Tip: Just tell a good story and link Future
Plans to achievements.
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13. Impact Reporting & SORP 2015
• Achievement & performance section: ‘charities may
refer to impacts’.
• Impact definition: ‘the long-term effect of a charity’s
activities on both individual beneficiaries and at a
societal level’.
• SORP encourages charities to use impact reporting
but acknowledges major measurement problem in
many situations.
• Depth depends on a charity’s role and resources.
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14. Presentation & Style Options
• Written for who?
• Place in communications
strategy?
• Fit with other documents
such as review?
• How ‘glossy’?
• Other media than print?
• Who has editorial control?
• Recommend ‘Best
Practice Guide’ by Kay
Parris - downloadable
from Charity Comms.
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15. Performance Ratio Example
Annual Reports in Fundraising - WCVA - 2 Oct 14
Fundraising Performance
16,591 - Income Generated
6,416 - Cost of Generation
Ratio = 2.6:1
Charitable Activity Cost
13,043 - Charitable Act Cost
19,459 - Total Expenditure
Ratio = 67%
SORP 2015 Demo Sofa (£k)
Donations/Legacies 14,010
Other Trading 2,581
Charitable Activities 641
Investment 814
Total 18,046
Raising Funds 6,416
Charitable Activities 13,043
Total 19,459
Investment Loss -1,357
Net Income/Spend -2,770
15
Spend Income
Typical Key Indicators

16. ICAEW Charity Accounts Awards
Institute of Chartered
Accountants: Charities
Online Accounts Awards -
some 2013 winners by
income bracket.
• £250k to £1m: Sth Yorks Funding Advice Bureau.
• £1m to £5m: No awards; shortlist included Marine
Conservation Society and Warwickshire CAVA .
• £5m to £30m: Breakthrough Breast Cancer.
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17. Sth Yorks Funding Advice Bureau
• Helps voluntary and community
organisations to develop fundraising
skills. Income £248k.
• 39 pages, just text and graphics.
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18. Example of Web Display
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19. What Donors expect in a Report
• Well defined plans & sense of purpose?
• Clear set of achievable objectives?
• Do activities match the objectives?
• Same activities for words and numbers?
• Evaluation of results: making a difference?
• Adequate cash to complete planned work?
How does your charity match up?
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20. Filing
Shame?
• Web is
part of CC
‘File Early’
campaign.
• Helps to
form a
funder’s
opinion of
charity’s
credibility.
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Late = Red