The Charity Commission of England and Wales has released the questions that will be required to be addressed in a Charity Annual Return commence on 1 January 2024.
The list of questions has increased considerably, appearing to focus on allowing the Commission to be able to assess the risks to the sector more broadly. Additionally some questions seem to look more carefully at the risks associated with the specific charity.
Not all Charities will need to answer every question.
The new questions cover the following areas:
Income Breakdown
For Charities with a gross income less than £500,000 or income from grants or contracts that is less than 70% of the charity income, the value of income received is analysed:
- Donations and Legacies
- Charitable Activities
- Other Trading Activities
- Investments
Donations
The highest value of a single donation received from:
- Corporate Donor
- Individual
- A related party
Grant Making
Where a charity makes grants as its main way of carrying out its purposes then the value of grants is analysed
- Individuals
- Other Charities
- Other organisations that are not charities
Additionally the charity must confirm if any of the grant recipients are related parties.
Activities outside of the UK
Where income has been received from outside of the UK and/or where charitable activities are delivered or expenditure made outside of the UK the countries involved must be shown and the nature of the counterparty identified (Government, Non-Government, Company or individual etc). Additionally now, the new questions cover how the funds are transferred. See below.
Funds transferred outside of the regulated banking system
The charity must identify the value of any funds that have been moved outside of the regulated banking system, by
- Informal Value Transfer Systems (IVTS)
- Money Service Businesses(MSBs)
- Businesses authorised to provide ‘Payment services’
- Cash couriers
- Cryptocurrency
- Other
Trading subsidiaries
The charity must confirm if it has any trading subsidiaries and if any have been dissolved during the financial reporting period.
Charity addresses
The charity is asked to confirm its public address and if it is the same for the administrative headquarters. If not, add the address of the administrative headquarters.
Property
For unincorporated charities only, confirm whether any of the charity’s properties are held by holding or custodian trustees.
Structure and Membership
Where the charity is part of a wider group structure, then some details of the nature of the charity within the group and if there are any non-trustee members that are entitled to vote under the charity's governing document.
Employees
At the end of the financial period, how many:
- people were permanently employed within the charity
- people were on fixed-term contracts with the charity
- self-employed people were working for the charity
- people work on behalf of the charity outside the UK
Additionally the total amount spent on employee payroll during the financial period is to be shown.
Governance
Unless the charity is a subsidiary charity; the policies and procedures that the charity has in place need to be confirmed from the list
- internal financial controls
- safeguarding
- financial reserves
- complaints
- serious incident
- internal risk management
- trustee expenses
- trustee conflicts
- investing charity funds
- campaigns and political activity
- bullying and harassment
- social media
- engaging external speakers at charity events
Safeguarding
The charity is asked to confirm whether it has provided services to children or adults at risk and that the charity has obtained the appropriate level of a Disclosure and Barring Service (DBS) checks for all roles that are eligible.
External risk and impact
The commission states that this question will only appear in the annual return in exceptional circumstances (Covid Pandemic is given as an example) and then the impact is to be assessed by the charity. The commission has stated that they will provide the information on the event as necessary.
The impact assessment is couched in terms of estimated positive or negative impact over
- donations
- other income sources
- expenditure on charitable activities and overheads
- numbers of volunteers, employees, trustees
- fundraising activities
- capacity to deliver services
- total service demand
More information is available from the Charity Commission of England and Wales website Charity Annual Return 2023
