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Charities do not have the right to “opt out” if the trustees consider their responsibilities to meet the public benefit requirement to be too demanding.

One of the ways in which a charity must now demonstrate that its purposes are for the public benefit is through the Trustees’ Annual Report. All registered charities must prepare a Trustees’ Annual Report and those with a gross income which exceeds £10,000 must file their Trustees’ Annual Reports with the Charity Commission.

The basic contents of the Annual Report are mandatory, although smaller charities (not subject to statutory audit) are not required to provide as much information as larger charities which are legally required to have an audit.

A Trustees’ Annual Report covering any period starting on or after 1 April 2008 must include:

• A report of those activities undertaken by a charity to further its charitable purposes for the public benefit.
• A statement by the charity trustees as to whether they have complied with the duty in section 4 of the Charities Act 2006 to have due regard to the public benefit guidance published by the Charity Commission.

The Charity Commission considers the information provided in the Trustees’ Annual Reports about public benefit to be a useful first step in showing whether a charity’s purposes are for the public benefit, and that those purposes are being carried out. 

The Annual Report need not be lengthy. A good Annual Report explains the charity’s aims and how it is going about achieving them. It meets all the legal requirements and provides a balanced view of the charity’s structure, aims, objectives, activities and performance. Importantly, it brings the charity to life and for those charities that rely on voluntary income as their primary source of funding provides donors with the opportunity to understand how their money was spent and the difference it has made.”

We are experts in charity law and governance. If you need help and advice in creating your annual report, ensuring that it is legally sound and well produced, please do get in contact.