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In a recent Charity Commission study, 93% of those surveyed said they recognised the important role charities play in our lives.  Yet the same research also revealed a significant decline in the amount of trust we place in them – from 6.7 out of 10 in 2014 to 5.7 now, the lowest level since monitoring began in 2005.

Why are we so much more sceptical?  The study indicated 5 main reasons:

  1. Media stories about a charity/charities generally (33%)
  2. Media coverage about how charities spend donations (32%)
  3. Don’t trust them/I don’t know where the money goes (21%)
  4. They use pressurizing techniques, including in fundraising (18%)
  5. Too much money is spent on advertising/wages (15%)

67% of respondents said they think charities spend too much on salaries and administration and that a lack of accountability and transparency in terms of what happens to their donations is likely to make them more reluctant to give in the future.

So what does create public trust?  According to the report:

  1. Making a positive difference to the cause they are working for (16%)
  2. Ensuring a reasonable proportion of donations make it to the end cause (13%)
  3. Good management (12%)
  4. Ensuring fundraisers are honest and ethical (12%)
  5. Making independent decisions to further the cause they work for (10%)

Those surveyed said they were also more willing to support local and smaller UK-wide charities than big multinationals.

With these findings in mind and our experience of working with a range of Cornwall-based charities, these are our top tips for using your annual report to tackle the survey’s three key issues of accountability, management and fundraising:

  1. Use your annual report to explain how the charity’s money has been spent and why.
  2. Don’t just rely on figures – bring your organisation’s activities and performance to life in as readable and engaging a way as possible.
  3. Illustrate the difference your charity is making through case studies.  Tell the human story.
  4. Let people know what your charity is aiming to achieve, what your objectives are and how you intend to meet them.
  5. Be open about the progress you are making and how you think you can improve.
  6. Use visual imagery.  It may be a cliché but a good picture really is worth a thousand words.
  7. Don’t just focus on the past and work done to date, inspire us with your plans.
  8. Show us how the charity is managed cost effectively and that you are always alert to financial risk, with adequate reserves in place.
  9. Communication is vital – both online and offline.  Think about who your different audiences are and what they need or want to know.
  10.  Make sure you can evidence your success with hard facts and share the positive impact your charity is delivering.

Jonathan Mashen is an Audit Partner with Lang Bennetts Chartered Accountants.  As a specialist in the charity and not-for-profit sector, he works with a range of organisations and businesses and has served as a trustee and Vice-Chair of Cornwall Blind Association and currently is a member of the audit committee at Cornwall College..