Trustee Annual Report Changes: SORP 2026 Briefing
Overview
The new Charity Statement of Recommended Practice (SORP) came into effect on 1 January 2026 and applies to all accounting periods beginning on or after the 1st January 2026. The changes place greater emphasis on transparency, impact reporting, financial resilience, and future planning meaning that charities really need to ensure relevant data is collected throughout the year, rather than at year end.
Key Changes
> Impact Reporting and Charitable Activities
Trustee Annual Reports must provide clearer evidence of the difference a charity is making. This means demonstrating outcomes and impact, not just activities undertaken and showing how activities contribute to charitable objectives.
You can use evidence such as:
- KPIs and performance measures
- Beneficiary statistics
- Case studies and personal stories
- Long-term social impact data
Include visuals where appropriate, such as graphs, charts and photographs.
Action: Begin collecting impact data and case studies throughout the year.
> Reserves Reporting
There is an increased requirement for transparency around reserves so reports should include:
- The charity reserves policy, its rationale and any variances from that policy.
- Actual reserves held during the year.
- Actions being taken to address any shortfalls or excesses.
Action: Review reserves policies and ensure trustees can clearly explain reserve levels.
> Going Concern
Trustees will need to provide more detailed commentary on the charity’s financial sustainability and reports should cover:
- Financial resilience.
- Key assumptions made by trustees.
- Risks affecting future operations.
- Explanations where reserves are low or zero.
Action: Strengthen financial planning and document assumptions supporting future viability.
> Future Planning
The focus is not solely on past performance.
Reports should include:
- Future priorities and strategic objectives.
- Planned projects and service developments.
- Expected impact of future activities.
- Funding arrangements supporting future plans.
Action: Develop clear forward-looking narratives aligned with organisational strategy.
> Volunteer Reporting
Volunteer contributions must be better recognised and all charities need to report on the nature of volunteer involvement, and the significance of volunteer contributions.
Tier 2 and Tier 3 charities should also include:
- Number of volunteers.
- Volunteer roles.
- Volunteer hours contributed where practical.
Action: Introduce processes to capture volunteer numbers and activity throughout the year.
> Linking Narrative and Financial Information
There is a greater expectation that financial statements and narrative reporting work together with reports needing to explain:
- How funds have been spent and on what activity.
- How spending contributes to charitable objectives.
- How future income and reserves will support ongoing work.
Action: Ensure reporting links financial performance directly to charitable impact.
>Environmental and Social Reporting
SORP 2026 introduced enhanced expectations around environmental, social and governance (ESG) reporting, particularly for larger charities. Areas that may be covered include: Environmental sustainability initiatives, Energy efficiency and recycling, Social responsibility and community impact, Governance and ethical decision-making.
Action: Consider how the charity is responding to environmental and social responsibilities and begin gathering supporting evidence.
Delivering SORP in 2026
To minimise year-end pressure, charities should:
✓ Collect impact data and case studies throughout the year
✓ Review reserves policies and financial resilience
✓ Strengthen links between financial information and activities
✓ Record volunteer contributions consistently
✓ Develop clear future plans and strategic priorities
✓ Consider environmental and social reporting requirements
Early preparation will help trustees produce a stronger, more compliant report that clearly demonstrates the charity’s impact, sustainability and future direction.
To talk through SORP or to find out more about the the Financial Support Services we offer charities, small businesses and community organisations contact us cr@community360.org.uk
