The Charity Commission has launched a formal consultation on proposed changes to the Annual Return, designed to ensure the regulator is collecting the right information in the years ahead.
WCVA is supporting charities to take part and have their say on the changes to the Annual Return
The Annual Return is an online form that all charities with yearly incomes of £10,000 or more must complete within 10 months of the end of their financial reporting period.
The return has not changed significantly since 2018, but after a comprehensive review, the Commission is proposing to update the questions that charities will need to complete from 2023 onwards.
The updates to the Annual Return are a key step in the Commission’s ambitions to become a more data-driven regulator. The strategy aims to ensure the nature and volume of data it gathers on charities serves three purposes: enabling the Commission to better identify risks and problems in the sector, helping the public make informed and confident choices about charities, and allowing policy-makers, researchers, the sector, and the public to gain a richer understanding of the sector in England and Wales.
The changes mean that charities will answer a greater number of questions, but they will have been simplified. The Commission has aimed to ensure the time burden on charities in completing the return remains proportionate.
The final questionnaire will include an interactive glossary to help charities in completing the form.
Among the planned additions are questions designed to:
- Better capture and understand charities’ reliance on certain types of income, and on single sources of funding. For example, charities will be asked whether 70% or more of their funding relies on one income stream, and whether 25% or more of their income comes from certain types of income sources, such as corporate donors.
- Gain information on roles and responsibilities, governance, controls and different organisational structures in charities, as there are indications that this information may correlate with risk.
- Create an accurate picture of the geographical areas in which charities operate in England and Wales, by asking for information about the premises from which charities operate. This will help policy makers and grant-givers to identify geographic areas which are comparatively under-served by charitable work. Funders can then make decisions that help ‘level-up’ these areas.
- Better capture staffing numbers and payroll costs in the sector, allowing the public and others to consider charities’ use of resources and their capability to deliver certain types of activity.
The Commission is keen to hear from a wide range of charities as part of the consultation, so that it can make any necessary adjustments before the new return is launched in 2023.
The Commission has also undertaken user-testing of the question set with charities, to ensure the questions are clear and easy to understand. A further round of this user-testing is planned for July.
WCVA will be responding to the consultation on behalf of the sector and we encourage charities in Wales to respond and get their voices heard in this important exercise.