How we write charity profiles

How we calculate the Quality of Reporting score

1. Clear explanation of how this year’s activities benefited users
   The charity must explain how its activities in the past year benefit its users and/or the general public. For example, grant-making charities must explain which organisations and projects they funded and why the work is important. 
2. Clear description of the charity's achievements in the year.      
   Must clearly explain what the charity has done in the past year, and where it has done it. The activities described must be operational (i.e. the charity acting in pursuit of its mission) rather than simply organisational (e.g. 'restructuring the fundraising team')
3. The annual report contains an easy-to-find stated purpose        
   Must be easy to find the charity's stated aims.
4. Charity's activities this year match the stated purpose 
   The charity must have spent its money in a way compatible with the stated purpose.
5. This year's annual report is submitted to Charity Commission on time 
   Annual reports must be submitted within 10 months of the end of the charity’s financial year.
6. Explanation of the charity's grant-making policies? *    
   If the charity makes grants, it must be clear how it decides who receives them. It must also provide an indication of who has received grants. In the case of grants to organisations, the recipients and amounts must be listed.
7. Explanation of the charity’s reserves policy *   
   Must give target cash levels and/or the period of the charity’s operation that such levels of reserves would cover.
8. Comment on the charity's financial health         
   Must give a concise and unambiguous statement of the financial position of the charity as a whole.
9. Disclosure of trustee remuneration & expenses             
   Must provide full disclosure in line with official accounting rules (i.e. paragraphs 230-33 of SORP 2005 [PDF]), including: which trustees have been remunerated, how much, for what and under whose authority. And which trustees have been given expenses, how much and for what. If no expenses or remuneration have been given, this must be stated explicitly.
10. Disclosure of the charity's relationships with other parties        
    Must reveal any organization with which the charity has had significant dealings with, including: umbrella groups, affiliated charities, organisations that have given the charity a grant, organisations the charity has given a grant to. Must make clear the nature of the relationship.
11. Disclosure of the charity's future expenditure streams
    Must provide specific plans and general figures of how the charity plans to spend its cash, covering a majority of its expenditure.
12. Clear explanation of risks facing the charity       
    Must be a clear statement, including specific operational risks faced by the charity this year. A general statement which could be repeated every year is not sufficient.
13. Details of charity's staff               
    Must disclose how many people work for the charity, how many work in each type of role (for example, administration, marketing) and the overall top salary (this can be within a range).
14. Comment on the charity's major sources of income/expenditure           
    Must provide precise figures of a breakdown of major sources of income and expenditure. Must be accompanied by a commentary.
15. Explanation of the charity’s investment policy *             
    If the charity has investments (as opposed to money in bank accounts), must disclose what the charity's approach to investments is, and also which type of investments it has (e.g. shares). No exception is made for investments donated to the charity.
16. Comment on performance of investments *     
    If the charity has investments (as opposed to money in bank accounts), must reveal whether investment performance has been in line with what was expected.
17. Clear description of the charity's future plans (at least 2 years)
    Output-based plans for at least two years' duration (Since annual reports need only be submitted 10 months after the year end, one year’s plans are insufficient to give the reader a clear picture of the charity's future).
18. Comment on achievement of reserves & action to be taken *  
    Must give figures for the current state of reserves, how this differs from the target. If different, must state what the charity plans to do to bring its level of reserves into line with the target.
19. Comment on the contribution of volunteers * 
    Must give a picture of the activities of volunteers, excluding fundraising volunteers (e.g. challenge-event participants).
20. Economic value of volunteers disclosed *          
    Must give a picture of the economic value of volunteers, excluding fundraising volunteers. Could be either in terms of time spent working for the charity, or the estimated financial value of their time. It is not enough to say that the value of volunteers is impossible to quantity.
21. FAQ on the charity's website covering donors' concerns             
    The information must be in FAQ format and must address concerns about what will happen with donors money (e.g. 'we spend 10 per cent of our expenditure on admin'). Requests for donations and descriptions of activity do not count.
22. Explanation of what the charity has done to achieve its stated purpose               
    The activities described in the report must correspond to the stated purpose of the charity.
23. Explanation of how this year's achievements compare to what was planned     
    Must disclose plans for outputs specific to this year. Must be able to compare plans with achievements.
24. The stated purpose is clear and digestible to the average reader            
    The stated purpose should make sense and not be confusing.
25. Targets and indicators against which success measured               
    Must provide evidence that performance-targets have been set and disclosure of whether these targets have been met. Must use figures.
26. List of trustees who served during the year       
    A list of trustees indicating who served during the year, including any movements (e.g. dates of appointment & resignation occurring that year).
27. Clear disclosure of who appoints the trustees  
    It must be unambiguous who appoints the trustees. Information on recruitment practices is not sufficient.
28. Disclosure of the charity's future income streams          
    Needs estimated figures which give an idea of how the charity as a whole will be funded in future. This should cover the majority of income.
29. The annual report covers everything     
    There must be no sense of cover-up or glaring omission, and it must be written in clear English. (All charities which fail this criterion are automatically submitted to be rechecked by the Lead Researcher).
30. How late was this year's annual report? *          
    The later an annual report is submitted, the lower the score on this criterion.
31. Clear comment on charity's property assets *   
    If the charity owns any property, must outline what any properties are and what each are worth.
32. Annual reports are easy to find on the charity's website             
    Website must contain an annual report, including the full audited accounts (i.e. the same report as submitted to the Charity Commission). It must be easy to find on the website.
33. Explanation of funds in deficit at year-end *     
    If the charity's total unrestricted, restricted or other funds are in deficit at the end of the year, the charity must reveal why, and how it plans to rectify the situation.
34. Comment on fundraising effectiveness               
    Must be an unambiguous statement of how successfully the charity raised funds this year, relating to the charity as a whole. Statements such as 'it was a record-breaking year' are not sufficient.
35. Adequate explanation of unusual income/expenditure *           
    If there are any dramatic fluctuations comparing this year’s income and expenditure, or type/source of income and expenditure, must explain what the unusual income/expenditure was, and why it occurred.
36. Information about subsidiary companies *        
    Must provide information about any existing subsidiary companies, including an explanation of what they do. Does not apply to dormant subsidiary companies.
37. Charity has no history of submitting annual reports late              
    Annual reports are late if they have been received by the Charity Commission more than ten months after the end of the financial year. We look at the submission dates of the three annual reports before the report we are reviewing.
38. The stated purpose addresses outcomes            
    An output is an activity that the charity undertakes or a service it provides. An outcome is the final goal of these activities. Stated purpose should focus on outcomes.
39. The charity’s website contain the annual report for this year    
    Website must contain the annual report for this year, including the full audited accounts (i.e. the same report as submitted to the Charity Commission).
40. Clear description of the charity's organizational structure          
    Must be a description of the lines of accountability between those involved in the day-to-day running of the charity (usually, this won't include the trustees).
41. Disclosure of how much of the charity's expenditure is charitable          
    Must give a representation of charitable expenditure as a proportion of total expenditure or total income. Must include figures.
42. Disclosure of performance on income targets   
    Must be specific to this year, unambiguous and refer to the charity as a whole. Figures are preferred but a more general statement such as ‘we have exceeded our income targets’ will suffice.
43. Reference to problems
    A description of operational problems experienced by the charity, or a clear statement that there were none.

Why these criteria?

• The Charity Commission's "Hallmarks of an Effective Charity"
• The Charity Commission's Accounting and Reporting by Charities: Statement of Recommended Practice (Revised 2005) (a.k.a. SORP 2005)
• The Charity Commission's “Transparency and Accountability” - Regulatory Study 8
• The question, “Does this charity appear to prioritise its beneficiaries?”
• The question, “Does this charity give me enough information that I can compare it easily with another charity?”
• Data that we can judge within a maximum of three hours per charity

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The nuts and bolts: how profiles are written

• Profiles are written by researchers with regard to our Charity Review Input System (CHRIS) Guide.
• Each of our researchers undergoes over a week's training before being allowed to write any profiles.
• The Lead Researcher checks a significant number of profiles, including:
  1. Charities flagged for checking by the researcher
  2. Charities which are new, i.e. profiled for the first time;
  3. Charities which have seen a change in score greater that 10% as compared to the previous year; and
  4. Charities which have seen a change in Top Ranked status.
• The Director then sub-edits the overview paragraph for style and tone.
• The Lead Researcher then uploads the profile onto the website.  She checks that there are no spelling mistakes and that appropriate taxonomy terms have been used to describe the charity in the 'In Short' box.
• David Pitchford, a trustee, then checks all paragraphs which may be regarded as controversial.
• Researchers then telephone all charities to inform them about their updated profile.  Charities are invited to look at their profile, submit text for the ‘Right to Reply’ and the ‘How to Help’ sections of the profile.  A follow up email is sent with the same details.
• The Lead researcher then makes changes to the profiles if they contain errors of fact. Quality of Reporting scores and our judgments are never altered, however.

How we monitor for quality

• Training. When they arrive, researchers are guided through the profiling process by the Lead Researcher.  The most significant part of this is going through the 43 criteria in detail: each criterion is described and accompanied by an example of good or bad disclosure in an annual report. Researchers are then required to complete at least six practice profiles, which are then compared to the ‘official’ Quality of Reporting score the charity received. The Lead Researcher and the researcher then go through any differences that are found. Before being allowed to write profiles for the website, interns are required to score charities to within 2.5% of the actual score, relatively consistently. However, there are problems with this approach: a.) the application on criteria changes with each iteration of the CHRIS Guide; and b.) researchers may get a similar score, but yet have applied the criteria differently. Comparing scores is therefore of limited use as an indicator of interns’ understanding of CHRIS. Researchers are therefore only allowed to start on ‘live’ profiles once Sarah is satisfied that they have a sufficient understanding of the criteria and how to apply them. This is necessarily a subjective judgment.

• Checking profiles. Checking is not comprehensive, but is designed to pick up on:
  • Minor errors, such as those which might arise from misreading the annual report;
  • Any borderline decisions the researchers identify when writing profiles, e.g. where the CHRIS Guide is ambiguous as to whether the annual report has fulfilled the criteria;
  • The overview paragraphs, insofar as it mentions facts about the charity; and
  • Double-checking of ‘controversial’ decisions. For example, nearly all charities will be awarded marks for describing their year’s activities of their benefit to users.  If a researcher said No to either of these things, this would be checked because it is unusual.

• CHRIS Meetings. Once a month, the Director, the Lead Researcher and all other researchers independently profile a single charity. We then go through all our results and discuss any differences in opinion. This ensures that we all apply the criteria consistently, and shows up any area of the CHRIS Guide where ambiguity is leading to mistakes.  A new, less ambiguous version of the CHRIS Guide is then produced and distributed. Every six months, the Director and Lead Researcher meet to discuss each of the 43 criteria word-by-word, with the aim of producing a clearer version of the CHRIS Guide.

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Choosing charities to profile

• The Charities Aid Foundation (CAF)identifies the ‘Top 500 Fundraising Charities’ by voluntary income in its publication, Charity Trends. This is published annually.
  1. However, the listing in Charity Trends is not comprehensive. This prevents us merely from using its definition of the ‘Top 500 charities’. The problems are:
     1. The financial data used by CAF to compile its list is out-of-date.
     2. The financial data used by CAF to compile its list comes from multiple financial years, undermining the list’s authority.
  2. We also face legal hurdles in adopting CAF’s list. Our charitable objects state that we are authorized to promote charities which are based in England and Wales. CAF’s list includes charities registered in Scotland.
• CAF’s list is the only publicly available listing of the ‘Top 500’ charities by voluntary income. Therefore, if we are unable to adopt CAF’s list wholesale, we have to make a ‘best guess’ at what the Top 500 charities by voluntary income in England and Wales are. We do that in the following way.
  • We strip CAF’s list of out-of-date or inconsistent financial information, and of Scottish charities.
  • We update the financial information on CAF’s list where it is out of date.
  • This then leaves a list of, approximately 350 charities. All of these are included in our listing.
  • The remaining 150 charities will be selected on the basis of our research into the sector.
• We investigate the voluntary income of charities identified as potentially capable of being amongst the Top 500 fundraising charities in England and Wales. If the charity’s voluntary income might reasonably be expected to be within the range of the country’s Top 500, then we will record it.
• We assess whether the voluntary-income figure might “reasonably be expected” to be within this range by comparing it to the 500th charity on CAF’s list and noting whether the charity in question has a voluntary income of more or less than the 500th charity.
• Applying this method to many charities, we produce a ‘best-guess’ list of the largest 500 fundraising charities by voluntary income in England and Wales.
• We update our listing of charities once a year.

• Size of charity. The Charity Commission recognizes that charities are qualitatively different, depending on their size. And we also think that charities’ size might materially affect individuals’ thinking when deciding which charity to support. So we will include an indication of each charity’s size in the directory.
• Highest salary. nfpSynergy has reported on several occasions that the size of salaries in the charity sector is a matter of concern to the public. In The Twenty-First Century Donor, it reported that over one third of the general public feels put off charities by the perceived size of the sector’s top salaries. Moreover, 59% of a survey’s 1,000 respondents expressed concern with charities’ administration costs. In the public mind, we believe that salaries are conceived of as part of a charity’s administration expenses. Therefore, the vast majority of the public has an interest in discovering the charities’ highest salary.
  
• Ethical investment policy. Individuals support charities in order to make a positive difference to the world. However, donors could reasonably doubt the positive end their charitable donation was advancing, were part of that donation to be invested in ‘unethical’ companies. For example, someone who donated to a cancer charity in memory of a loved one who died from lung cancer brought about by smoking, could legitimately redirect their donations from a cancer-research charity with investments in a tobacco firm, towards a charity with an ethical-investment policy.
  
• Spent on charitable work (percentage of expenditure). The public is overwhelmingly concerned with the question of how much of their donation to any charity ‘gets to the cause’. This figure provides an answer to this question.

The history

2005
August - Given free office space at the Young Foundation offices
October - Meets Peter Heywood who agrees to fund the project
November - David Pitchford starts work full-time
December - Volunteers start work

2006
January - Three paid members of staff join
February - Online questionnaire attracts over 200 responses from members of the public
March - Online questionnaire attracts over 150 responses from charity workers
April - Quality of Reporting criteria finalised
August - 540 charity profiles completed
October - User testing
November - Launch of Intelligent Giving on time and budget!

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