The number of core questions charities will be asked to answer on their annual return is to be doubled, under plans being put forward by the Charity Commission.
The annual baseline of questions answered by all charities required to submit returns is to increase from 16 to 32. Meanwhile, the maximum number of questions that charities can be asked is rising from 36 to 52.
New questions are being proposed looking in depth at charity’s income streams focusing on diversity of funding and money gained through corporate or individual donors.
These are being inserted to offer a greater examination of risk, says the regulator, for example whether a charity has a reliance of more than 70% of its income on one source.
Another new question is on payments to trustees. The regulator currently asks about payments and benefits trustees have received. It will now ask specifically “whether trustees were paid for being a trustee” as well as paid for any role within the charity’s trading subsidiaries or connected organisations.
Elsewhere, a new question has been added to assess whether charities are principally grant makers and what proportion of their grants are made to individuals and other charities.
Other changes focus on greater detail about the locations charities operate in England and Wales and more information about staffing numbers and payroll costs.
A consultation on the proposed changes has been launched and closes on 1 September.
The Charity Commission says the changes aim to ensure that “the time burden on charities in completing the return remains reasonable and proportionate”.
Charity Commission chair Helen Stephenson added: “The annual return is a crucial tool that helps charities account for their work to us as regulator, and to the public and funders.
“It’s important we get the questions right, but also that we keep the burden on charities completing the return proportionate. So I encourage charities to look at the proposed changes and have their say as part of our consultation.
“Looking ahead, the new information we hope to gather through the annual return will benefit the sector, as well as the Commission as regulator, by allowing us to make more detailed, richer information about the sector available, which in turn can inform the public and funders in making better informed decisions about which charities to support.”
Under the proposals the changes would apply to charities’ accounts starting on or after 1 January 2023.
All charities with an annual income of £10,000 or more must complete a return within 10 months of the end of their financial reporting period.
This is the first major change to the annual return since 2018.