Charities should explain approach to financial risk

The Charity Commission is reminding charities that have current debts exceeding available funds to explain in their Trustees’ Annual Report how they are addressing the associated risks. A review of almost a hundred charity accounts found that nearly half failed to discuss the issue in their reports.

The person leading the review said

“A net current liability doesn’t necessarily mean that a charity is facing financial difficulties, but if this situation continues for a sustained period then the charity’s long term survival must be questionable. Trustees should use their Trustees’ Annual report and accounts as an opportunity to reassure their funders, supporters and beneficiaries that they are actively managing the situation.”

Civil Society Media coverage or find the report via the Commission news release