The Charity SORP changes are set to introduce significant updates to how charities report their activities, and it’s essential that charity trustees take note. The new draft standard places great importance on narrative reporting, which is increasingly seen as just as valuable as the numbers themselves.
We know that for many charities, resources are already stretched. But with funders demanding greater transparency and accountability, preparing a strong, clear narrative could be the difference between securing vital support or missing out.
Let’s take a closer look at what’s changing, who it affects, and what action your charity should take now to stay ahead of the curve.
Who is affected by the Charity SORP changes 2025?
All UK-registered charities that prepare accruals accounts under the Charities SORP (Statement of Recommended Practice) will be affected by these changes.
The new draft introduces a tiered approach to reporting, based on a charity’s annual income. While these income bands are still provisional, the current proposal includes:
- Tier 1: Charities with income under £500,000
- Tier 2: Charities with income under £15 million
- Tier 3: Charities with income over £15 million
What’s changing in the Charity SORP?
While some accounting changes mirror those already introduced for companies — and are well-publicised elsewhere — a number of key updates for charities lie in the narrative reporting requirements. These now apply across all tiers to some degree and cover the following headings:
1. Objectives and Activities
Charities will need to clearly explain what they aim to achieve and how they go about delivering those aims.
2. Achievements and Performance
Reports must demonstrate real outcomes. What impact has the charity made? How is it measuring success? Consider how you’ve helped your beneficiaries and society as a whole. Don’t sugar-coat things – all charities face ups and downs and an honest reflection often resonates with supporters.
3. Financial Review
This section should include insights into reserves, risks, and how financial resources are being managed and allocated. This is often more difficult to report on than expected – during difficult times, cash can be tight and an explanation of how you’re managing that is important. When times are better and there’s cash in the bank, funders want to understand why you’re still looking for support and how you’ve calculated your rainy-day fund.
4. Plans for future periods
Trustees will need to outline key strategic goals and how they plan to address future challenges or opportunities.
5. Structure, governance and management
Details of how trustees are appointed and how you make decisions are important – good governance is very reassuring to the readers of the accounts.
6. Reference and Administrative Details
While this may feel procedural, accuracy and completeness here are critical to maintaining transparency and trust.
7. Sustainability
A new and important requirement: all charities will now be encouraged to comment on how they are approaching environmental, economic, and operational sustainability.
What action should charities take now?
The biggest takeaway? Narrative reporting is no longer a formality. They play a critical role in shaping how a charity is perceived by funders, regulators, and the public.
Start early
Don’t leave your report to the last minute. Involve trustees and senior management now to build a fuller, more compelling picture of your work. Starting the Trustees’ Annual Report as near to the year-end lets you stand back and learn from the past year as early as possible, while making sure highlights of the year aren’t forgotten.
Align narrative with strategy
Your report should reflect your charity’s mission and key outcomes. Use it as a platform to celebrate success and show impact.
Plan for consistency
Even if you fall under Tier 1, the new baseline requires a clear, consistent structure. Make sure your reporting reflects the new headings and is proportionate to your size and resources.
When do the new SORP rules come into force?
The Charity SORP changes are currently in draft form, with a final version expected to be published later this year. The changes apply to reporting periods beginning on or after 1 January 2025.
We work closely with charities of all sizes, and we understand the pressure trustees are under to balance compliance with delivering services.
We can help you:
- Understand your tier and the level of detail required
- Review your current narrative reports for gaps or improvement
- Develop future-ready templates aligned with the new SORP
- Deliver training sessions for trustees or staff
- Stay compliant and confident in your financial reporting
We’re already supporting many of our charity clients through these changes. Get in touch with our charity team to find out how we can help yours too.
Want to learn more?
The SORP committee has shared more details on the SORP development process, which you can explore here. You can find out more about our Charity expertise here.