# CFDG proposes improvements to charity annual reports

- Link: https://fundraising.co.uk/2003/11/11/cfdg-proposes-improvements-charity-annual-reports/
- Published: 2003-11-11T00:00:00+00:00
- Author: Howard Lake

The Charity Finance Directors’ Group has launched a range of proposals for consultation
that they hope will improve the quality and consistency of charity annual reports.

The CFDG’s aim is to improve charity reporting so the public will know exactly how
their money is being spent.

 

 

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The group has today published a report, “Inputs Matter: Improving the Quality of
Reporting in the Charity Sector,” in which it sets out plans to tighten the definitions
used in charity accounting. Funded by the Lloyds TSB Foundation, the report contains
a number wide-ranging and, the CFDG accepts, controversial recommendations in relation
to Support, Management and Administration Costs, Fundraising Costs and the Valuing
of Volunteers.

 

 

These include:

 

 

 * That consideration should be given to include a value for volunteer time in the
   SOFA.
 * Management and administration costs should be called ‘governance’ costs or similar,
   with the term defined to make it clear what sort of costs should be included,
   and sufficient detail provided to explain all cost allocations.
 * Allocation policies relating to fundraising activity, themselves based on clearer
   definitions as to what constitutes fundraised income, should be determined in
   advance of the year-end and be approved by the trustees before they are applied.

 

 

CFDG is now asking its members and other interested parties what they think of the
proposals, and whether they will lead to more meaningful financial ratios. It is
also anticipated that the Report will contribute to the next annual SORP review.

 

 

CFDG Vice Chairman, Les Jones OBE (Deputy Chief Executive at WWF) said: “The issue
of the use of financial information to compare charities is inevitable and whilst
there are many limitations to any such comparison it is clearly going to happen.
CFDG are therefore keen to ensure that the financial information provides enough
of the right data to assist in this process. We will not be able to move on to meaningful
comparisons until we are sure that we have got right the consistency and acceptance
of fundamental principles of accounting for the inputs. This will in turn assist
with the all important measurement of outputs, outcomes and impacts.”

 

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