Best practice for impact reporting by charities


ICAS has funded and published research into charity impact reporting to inform the Charities Statement of Recommended Practice (SORP).

The quality of financial reporting is essential in the charity sector, where the support of both funders and donors is dependent on the clear communication of impact. In this context, impact is defined as the long-term difference that charitable activities have on the people and causes they seek to help.

Historically, charities preparing financial statements have adhered not only to regulations, but also to the trustees’ annual report (TAR) requirements set out in the Charities Statement of Recommended Practice, known as the ‘SORP’. Studies have however shown that many charities struggle with the measurement and reporting of impact, leading to calls for SORP enhancements to help charities convey their impact more effectively.

As part of our role to serve the public interest, we commissioned a two-phase research project into charity impact reporting. The project aimed to provide evidence and recommendations to the SORP committee, as well as support to the charity sector and its stakeholders. It was carried out by Alpa Dhanani, Evangelia Varoutsa, Julian Woodward, and Penny Chaidali (Cardiff University), and Carolyn Cordery (Victoria University of Wellington).

Phase two

The second phase report, published today, considers the importance of charity impact information to funders, donors and supporters. It aims to improve understanding of the current charity impact disclosure practices, and consider how funders and donors use these reports to satisfy their accountability requirements and make future funding decisions.

The main findings from this phase of the project have been outlined in a key takeaways document.

To provide tangible assistance to the charity sector, we have also compiled examples of best impact reporting practice amongst the charities examined as part of this project.

Phase one

The first phase of this project analysed how UK charities develop and use impact reporting. The objective of the report was to understand the motives, processes, barriers and benefits of developing impact reporting, and ultimately assess whether it communicates charities’ achievements appropriately.

The main findings from this phase of the project are set out in the below drop-down.

This article was first published by ICAS at the following URL: