Charities face enhanced requirements for trustee reporting under SORP 2026, with more charities now being required to include impact reporting. This article looks at what has changed, and how trustees can best prepare for the challenges and opportunities ahead.

The Trustees’ Report is vital for upholding confidence in the sector. The refreshed requirements seek to respond to the increasing information needs of donors and funders amid high competition for support. The changes may be seen as a compliance exercise, but they also present leaders with an opportunity to reaffirm their charity’s value and improve internal practices.

What is changing?

Charities SORP 2026 is in effect for periods beginning from 1 January 2026. The Charity Commission has tightened the trustee reporting rules and organised them into a three-tier framework:

• Tier 1: Charities with income up to £500,000

• Tier 2: £500,001 to £15m

• Tier 3: Over £15m

The tiers aim to balance stakeholder expectations with proportionality, varying the requirements by charity size. The rules have strengthened at all levels, so all charities will need to adapt. Several disclosures that, under SORP 2019, were either optional or required only for larger charities, are now required for all tiers. This includes discussing volunteer contributions, fund designations, and free reserves levels compared to target, and how any gaps will be addressed.

Tier 1 strengthens the baseline of reporting, recognising these contextual factors are fundamental to understanding a charity's financial position. However, it also increases the effort required of those with the least resources. The revisions also raise expectations for larger charities. Notably, impact reporting and reporting on Environmental, Social and Governance (ESG) are now requirements in Tiers 2 and 3 respectively, rather than recommendations. By making them mandatory, the Charity Commission signals the growing significance of these forms of reporting. While they are more complex, they also offer leaders an opportunity to unlock lasting value for their charities.

A shift in perspective

For charities in Tiers 2 and 3, the Charities SORP 2026 introduces enhanced reporting expectations that go beyond financial position to demonstrate impact and public benefit. Trustees must show how their activities contribute to long-term change, supported by evidence and relevant data.

At Tier 3, a similar approach must explain charity responses to ESG issues like climate risks, community support, and data security. Together, these requirements underscore the Charity Commission's increasing emphasis on understandability and evidence-based storytelling. This focus is not driven solely by the regulator, but by donors and funders increasingly interested in capturing the impact of their support.

Many organisations falling within Tier 2 and 3 may already have well-established impact monitoring arrangements. ESG reporting is also likely to feel familiar to charities subject to the company law requirements for carbon and stakeholder engagement disclosures. For these charities, the SORP updates might reinforce and codify their pre-existing approach to the trustees’ report rather than revolutionize it.

The greatest challenges are likely to arise in organisations at the lower end of these tiers, where existing data practices may be more limited and at odds with the SORP's increased demands for measures and metrics. These charities require practical solutions and a new reporting mindset.

Practical implementation strategies:

• Understand what data you already collect: Leaders should liaise with operational teams and workstream owners to identify what information they already track. Suitable metrics will depend on the unique nature of each charity and are also likely to build on existing processes, helping to contain costs. Quality matters more than quantity: an effective approach could involve a few impact measures that reveal meaningful trends alongside focused reporting on the key ESG issues most relevant to the charity.

• Look beyond the short term: One common pitfall is an overreliance on outputs and testimonials to convey impact. While charity activity and human stories are important, leaders must also seek out data points that plot the long arc of progress. As one example, healthcare charities might demonstrate a direct long-term benefit by showing that individuals are living longer, healthier lives. For other charities, measuring impact may be harder inherently and may rely on indirect evidence, like trends in behaviour or policy. In these cases, clear narration is essential to link charity inputs through to outcomes and the lasting difference in society.

• Be transparent about setbacks: For complex organisations, progress may not be linear or easily measured and there may be challenges to advancing an ESG agenda. Report writers should not shy away from discussing the uncertainty, setbacks, or tough decisions their charity may have faced. An honest, balanced approach usually results in a more credible and compelling account while helping to contextualise charity direction and successes.

• Early planning and strong project coordination is key: There may be opportunities to address gaps in data collection before the year is over, and the new SORP may be an impetus to refine the report’s structure, accessibility, and design alongside its content. Ultimately, leaders should allow time to reflect on their charity's year and on the story their trustees’ report should present.

Reporting with impact

Operational resilience and service delivery are among the highest priorities in a sector under pressure from rising costs and escalating demand. Changes in the reporting landscape may appear as a secondary concern, detached from charities’ frontline work with communities.

Reporting practices are worth investing in. They must evolve to reflect the growing expectations of funders and society for evidence of how their support makes a difference. Effective trustee reporting not only traces inputs through to impact but also encourages leaders to recognise where their charity creates the greatest value. Charities SORP 2026 is an opportunity to embed that thinking, improve operations and strategic alignment, and strengthen the sector’s ability to deliver lasting societal change.

To discuss the new reporting or accounting requirements of SORP 2026, our specialist Charity and Not-For-Profit team is here to help.

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