Member Article

Local charities ?must account for reserves?

Charities in the North East hold a total of £69 million as reserves without accounting for them with a reserves policy, according to a report published today. The Charity Commission’s ‘Tell it like it is’ report shows that £3.6 billion of charitable funds is held without a policy by charities across England and Wales, and calls them to account for the money.

The Commission says that many charities hold reserves against a ‘rainy day’, making sure they can continue to run services even if their funding is disrupted. A policy explaining these reserves helps a charity plan ahead and explain to supporters and funders alike why they hold this money. There are 2,263 charities in the North East with an annual income of over £10k, but only 58% of those with reserves told the Commission they have a policy explaining why.

The report is based on data from charities with income of over £10k. The Commission says that the new figures are an improvement on the previous study carried out in 2002, with a 13% increase in the proportion of charities with a reserves policy, and a reduction in the overall amount of money held without being accounted for.

Andrew Hind, Chief Executive of the Charity Commission said, “Charities have never been more under the spotlight and it’s key that they are open and account for their reserves. Charities in the North East have a total income of £708 million a year - they must get to grips with this issue as part of their plan for long term sustainability.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .