Charity Commission publishes review of charities' reserves policies
Released 21 November 2018
The Charity Commission has published the results of a review into the disclosure of charities’ reserves policies.
All registered charities must explain their policy on reserves in their trustees’ annual report and should state the level of reserves held as well as why they are held. However, a recent review found that less than a quarter of larger charities accurately reported the level of financial reserves they hold in their trustees’ annual report. The Commission says its findings suggest an incomplete understanding of what reserves are, which could lead trustees to make poor decisions about their charity’s finances. Almost all of a sample of 106 charities with an income over £500,000 included at least a reference to their reserves policy in their annual report. However, less than a quarter gave the right reserves figure, based on the information in their accounts. A third of charities failed to include a figure at all.
For more information and to view the report, see Most large charities are unclear about the level of reserves they hold.