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3. The importance of setting
effective strategies
Consistent and well-defined strategies contribute
significantly to effective charitable operations. The way
that charities compose their aims within these broader
strategies are integral to achieving, measuring and clearly
reporting their progress against these objectives.
This helps demonstrate effectiveness to an external
audience, including beneficiaries, donors, funders and
regulators and also enables senior management and
trustees to guide the future direction of the organisation
Put simply, effective strategy-setting makes it clear
exactly what a charity is trying to achieve, and whether
or not it has achieved it.
Additionally, clear strategic planning and reporting enable
charities to:
Meet statutory reporting and best-practice
requirements expected by the regulator
Ensure transparency and inspire higher levels of
trust and confidence in charities
Charities SORP requirements
The Charities Statement of Recommended Practice
(SORP) says, in para 1.2, that the trustees' annual
report should be "a coherent document that meets the
requirements of law and regulation. It should provide a
fair, balanced and understandable review of the charity's
structure, legal purposes, objectives, activities, financial
performance and financial position".
The SORP also makes it clear that a good report should:
Explain what the charity is set up to do, how it is going
about it, and what is being achieved
Assist the user to make economic decisions in relation
to the charity and to assess the charity's progress
against its objectives and to understand its plans in
relation to its purposes.
The report should provide a
balanced picture of a charity's
progress against its objectives. For
example, it may explain progress
by reference to the indicators,
milestones and benchmarks
the charity uses to assess the
achievement of objectives
SORP para 1.42
"
"
Charities SORP para 1.40
Good reporting sets out how well the activities
undertaken by the charity and any subsidiaries
performed
And the extent to which the achievements met
the aims and objectives set by the charity
Provide a balanced view of successes and
failures along with the supporting evidence
Demonstrate the extent of performance and
achievement against the objectives set and the
lessons learned