The Charity Commission came out fighting last week, demanding that charities 'reveal all' if they have nothing to hide. Warning charity trustees that 'accounts aren't optional', the commission revealed that last year, more than one in three charities failed to send in their annual accounts and returns on time.
That is a shocking and abysmal statistic especially when you consider that SORP 2000 requires charities to file accurate and timely accounts.
And it is no wonder that compliance is the cornerstone of a new Charity Commission campaign that will see the regulator up the ante in its approach to enforcement. The commission says that it will name defaulting charities on its website, with persistent defaulters at risk of investigation. It will also feature that essential tool of any 21st century campaign – a gimmick. In this case, the website will sport a ‘postcode detector’ highlighting the best and worst regions for getting accounts in on time.
The commission is engaging in a very public crackdown on late filing because a lot of people donate a lot of money to a lot of charities these days. The third sector has an annual income in excess of £30bn and, at the latest count (June 2003), there were 187,676 charities on the commission register. That means around 62,500 charities failed to file on time.
Already two trustees have been prosecuted for persistently failing to submit their charities’ accounts. But given how endemic the problem is you have to wonder whether charities – and particularly smaller charities – will be able to change their working practices any time soon.