We attended a webinar by Charities Services on the new reporting standards. There were 1,700 participants in the webinar so there was a lot of demand from people to learn more about the statement of service performance.
The main points which were covered included:
- An overview of the new reporting standards;
- The purpose of the statement of service performance; and
- How the service performance standards might benefit charities.
The new changes came in relatively recently and introduced new standards for the not-for-profit sector. This seminar focused on the following two tiers which have different requirements:
- Tier 3: Under $2 million (accrual based accounting required); and
- Tier 4: Under $125,000 (cash based accounting).
In the past there were no requirements regarding financial information submitted – the new standards require that Charities provide a “Performance Report”. This includes both financial and non-financial reporting.
Non-financial information includes describing the entity and what it does. The second part involves a statement of service performance. The purpose of that is to “tell your story” – the both “outputs” and “outcomes” can be reported on. They distinguished those as follows:
Outputs – what was done eg goods or services provided (likely statistics will show this eg number of people helped); and
Outcomes – why it seeks to do or achieve that – this will be linked to the purpose of your charity.
They mentioned that graphs, charts and pictures can be used to show what you do. There is a template on the Charities Services website. Note that tier 4 only needs to record the outputs whereas tier 3 needs to record both outputs and outcomes.
The standards also require that previous years be compared to eg “100 attended” vs last year “90 attended” – this is not needed in the first year the report is done.
The webinar emphasised the positive aspects of preparing the document – it can be used for strategic planning, improving governance and marketing purposes. Clearly because it is new there must be many who are feeling like this is an added obligation on them and so they are trying to emphasise why it can assist a charity.
More information is available on Charities Services website here.
As the report is now compulsory for registered charities it is good to be aware of the requirements and get up to speed with these new requirements. If you have any questions about what is required then let us know as we are seeing some examples coming through and happy to share some ideas about preparing them.
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This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation.
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Contact Steven Moe at stevenmoe@parryfield.com to request this or for any other questions.
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