The updated Charities SORP introduces significant changes to the Trustees’ Annual Report. While many of these are technical in nature, they reflect a broader shift towards greater transparency, accountability and meaningful reporting.
The revised Trustees’ Annual Report (TAR) requirements under the 2026 Charities SORP represent one of the most substantive developments in charity reporting in recent years. While the structural changes are clear, the underlying message is more important: stakeholders expect better explanations, not just more disclosures.
For many charities, this will require a shift in mindset.
Moving beyond structure to substance
The introduction of a tiered reporting structure is intended to make reporting more proportionate. However, it should not be seen as a relaxation of expectations. Even smaller charities are expected to produce clear, coherent and informative reports.
The real change lies in the increased emphasis on narrative quality. It is no longer sufficient to describe activities at a high level. Reports must demonstrate how those activities link to outcomes, impact and long-term objectives.
In practice, this means that charities need to think more carefully about how they tell their story.
Reserves: from disclosure to explanation
One of the most notable changes is the expansion of reserves reporting requirements.
Charities are now expected to go beyond stating a reserves figure. They must explain the rationale behind their reserves policy, how reserves are calculated and how they compare to target levels.
This reflects ongoing concerns from regulators about poor understanding of reserves across the sector. Simply including a number is no longer enough. Trustees need to demonstrate that they understand what reserves represent and how they support financial resilience.
This is as much about governance as it is about reporting.
Increased focus on impact and sustainability
The revised SORP places greater emphasis on demonstrating impact. For larger charities, this is a mandatory requirement, but the expectation is clear across the sector.
Stakeholders want to understand not just what charities do, but what difference they make.
Similarly, the introduction of sustainability reporting for larger organisations reflects a growing focus on environmental and social responsibility. While not mandatory for all, this is likely to become an area of increasing importance.
Charities that begin to consider these areas now will be better positioned in the future.
Volunteers and future plans
Enhanced disclosures around volunteers recognise the critical role they play in many organisations. Quantifying volunteer contribution may be challenging, but it provides valuable context for stakeholders.
The requirement to disclose future plans is another important development. Forward-looking information helps to link strategy, financial planning and operational delivery.
This encourages a more integrated approach to reporting, where past performance and future direction are clearly connected.
What this means in practice:
The changes to the Trustees’ Annual Report are not simply about adding more content. They require better coordination, stronger processes and earlier preparation.
Organisations that treat reporting as a year-end exercise are likely to struggle. High-quality reporting depends on information being captured and considered throughout the year.
Trustees and management teams should therefore review existing processes and identify any gaps. This may include developing better systems for collecting impact data, reviewing reserves policies or improving internal communication.
Key takeaways:
- The revised TAR requirements place greater emphasis on narrative quality
- Reserves reporting must be clearer, more detailed and better explained
- Impact, sustainability and future planning are increasingly important
- Strong processes and early preparation are essential for effective reporting
This is part one, of a two-part series of articles from Adaku Okerere. Part two covers five key mistakes charity are making under the SORP, and how to avoid them. Read it here