Charity Reporting Under SORP 2026: A Practical Guide for Trustees

Learn how charities can prepare for the Statement of Recommended Practice (SORP) 2026. Practical guidance for trustees on annual reporting, governance, and ESG compliance.

This is a summary of our full Charity SORP Guide which you can download here or via the button below.

Blog by Suneet Sharma, Eastside People Governance Consultant.

Part A: Introduction to SORP 2026: How Charity and not-for-profit trustees can prepare for new annual reporting rules

The new Statement of Recommended Practice (SORP) for charities applies to accounting periods beginning on or after 1 January 2026. If your charity uses accruals accounts and your financial year starts in Q1 2026, now is the time to prepare. This guide explains what’s changing, why it matters, and how trustees can meet the new reporting requirements confidently.

Why SORP 2026 matters for charities

The Trustees’ Annual Report is more than a compliance document—it’s a cornerstone of accountability, transparency, and communication. It tells the story of your charity’s purpose, achievements, and financial health. SORP 2026 introduces a cumulative tiered approach to reporting based on a charity’s gross income, ensuring proportionality while raising expectations for clarity and impact.

The three-tier system

• Tier 1: Up to £500,000 gross annual income
• Tier 2: £500,001 – £15 million
• Tier 3: Over £15 million.

Larger charities (Tiers 2 and 3) must comply with all requirements of their tier and those of preceding tiers. This cumulative approach means more detail, more evaluation, and greater emphasis on governance and sustainability.

Nine core areas of the trustees’ annual report relevant to Charity SORP

Charity SORP 2026 requires coverage of nine key areas:

1. Objectives and activities
2. Achievements and performance
3. Financial review
4. Plans for future periods
5. Structure, governance and management
6. Reference and administrative details
7. Sustainability
8. Exemptions from disclosure
9. Funds held as holding trustee.

Below we break down what each area involves and how to meet the requirements.

Part B: Charity SORP-related objectives and activities

Your report must provide a summary of:

• The charity’s purposes as set out in its governing document.
• Main activities undertaken to further those purposes.
• How trustees have had regard to the Charity Commission’s public benefit guidance.

With explanations that:

• Help the user understand the scale and nature of the activities undertaken by different volunteer roles and the input from volunteers; and
• Allow users to form a greater understanding of the financial statements by covering the activities, projects or services identified in the accounts.

As well as complying with Tier 1 requirements, Tier 2 and 3 charities must also:

• Distinguish between short-term and longer-term aims and objectives
• Explain strategies, success measures, and significant activities
• Include volunteer contributions (numbers and hours where practicable).
• Provide grant-making and social investment policies if material.

Practical Tips for Charity SORP:

• Start with your strategy. Use SMART objectives as the backbone
• Structure this part of your report by charitable object and programme area for clarity and comparability.- link activities to charitable purposes.
• Presentation matters: Use visuals—infographics, theory of change diagrams—to make complex information accessible
• Use replicable and comparable frameworks to help with accessibility and benchmarking across multiple years and strategies.

Part C: Achievements and performance

For all charities this section answers two critical questions:

1. How has your work made a difference to beneficiaries?
2. What wider benefits have you delivered to society?

For Tier 2 and 3 charities, add:

• Evaluation against aims and objectives
• Impact stories and long-term effects
• Performance of material fundraising activities
• Analysis of factors influencing success—internal and external.

How to deliver for Charity SORP:

• Collect testimonials and case studies throughout the year
• Use consistent KPIs and evaluation frameworks
• Link every achievement back to stated objectives
• Include fundraising spend and ROI analysis.

Part D: Financial review

Every report must:

• Review the financial position with figures consistent with accounts
• Disclose deficits and outline steps to address them
• Explain reserves policy and going concern assessment
• Assess the charity as a going concern and explain any material uncertainties.

For Tier 2 and 3 charities, add:

• Information about significant events which impact the charities financial performance and position
• Principal income sources and expenditure alignment with objectives
• Risk and uncertainty disclosures (environmental, cyber, operational)
• Investment policies and social, environmental and ethical considerations
• Pension liabilities and legacy income timing.

Tier 3 charities must also forecast factors likely to affect future performance.

Best practice for Charity SORP:

• Align narrative with audited accounts
• Keep reserves explanation simple and transparent with a clearly defined position against which for assessment and evaluation can be made
• Include forecasting in appropriate financial reports and integrate risk register insights for credibility.

Part E: Plans for future periods

All tiers must outline future plans. For Tier 2 and 3:

• Include aims, objectives, and planned activities
• Show how lessons learned and experience gained influence future direction
• Explain resource allocation decisions.

Tips for Charity SORP:

• Create your strategy with your future reporting requirements in mind
• Demonstrate learning by explicitly connecting the past to the future. Example: “Our evaluation showed demand for evening services; we plan to extend opening hours in 2026/27.”

Part F: Structure, governance and management

Cover:

• Governing document and constitution
• Trustee recruitment and appointment processes.

Tier 2 and 3 charities must also:

• Explain organisational structure and decision-making processes
• Detail trustee induction and training
• Disclose pay-setting arrangements and benchmarks for senior staff
• Outline relationships with any subsidiaries and other networks and related parties.

Presentation idea for Charity SORP:

• Create a list of key governance features that can be replicated and edited for each report
• Use flowcharts and diagrams for clarity.

Part G: Reference and administrative details

You must include:

• Charity name(s), registration number(s), address(es)
• Names of trustees and directors (and anyone holding title to property)
• Auditors, bankers, solicitors, and advisers for Tier 2 and 3.

Pro tip for Charity SORP:

• Maintain a current list of all these details for easy transfer into reports.

Part H: Sustainability

SORP 2026 encourages reporting on ESG (Environmental, Social, Governance) matters:

• Environmental: Climate risk management, carbon reporting
• Social: Employee engagement, wellbeing, board diversity and inclusion, community support
• Governance: How cybersecurity, data protection, ethics and privacy are managed.

Start here to manage your Charity SORP’s ESG:

• Sign up to take Eastside People’s free ESG survey to benchmark your charity’s ESG status
• Consider the UN Sustainability Goals in your reporting
• Tier 3 charities can publish detailed ESG disclosures online and link from the report to the relevant website information.

Part I: Other considerations for Charity SORP

• Review exemptions from disclosure
• Include details of funds held as holding trustee on behalf of others
• Parent charities must expand their reporting to include for subsidiaries
• Charitable companies should note dual reporting obligations under Companies Act and EU regulations.

Part J: Five steps to take to start your preparation for Charity SORP

1. Audit your current reporting process. Identify gaps against SORP 2026 requirement
2. Update your strategy. Ensure objectives are SMART and linked to charitable purposes.
3. Embed data collection. Capture KPIs, testimonials, and financial metrics throughout the year
4. Train trustees. Make sure they understand their ultimate responsibility for compliance
5. Plan for ESG. Start tracking sustainability metrics and stakeholder engagement.

Final Thoughts on the Charity SORP

SORP 2026 raises the bar for charity reporting. It’s not just about compliance – it’s about telling a compelling, transparent story of impact and  -stewardship. Start to prepare now to ensure your charity meets the requirements and demonstrates best practice. Embed data collection, update governance policies, and train trustees on new requirements.

This blog is a summary of our our full Guide to the Charity SORP which you can download via the button below

Need Support to get started with Charity SORP and other governance and reporting requirements?

Eastside People can help with:

• SORP readiness assessment
• General governance advice on annual reporting requirements
• Governance reviews with benchmarking your governance practices against your peers and recommendations on how to build stronger governance effectiveness
• Impact assessments
• ESG materiality, gap analysis and strategy
• Strategy
• Evaluating the board’s balance of skills, experience and Equity, Diversity and Inclusion (EDI)
• Managing identified recruitment needs for example to strengthen board composition and improve diversity, skills and knowledge.

We’re currently offering charity leaders a free consultation to discuss reviewing and improving your governance.

Sign up to complete our Free ESG Survey in 2026:

Please complete this form if you’d like to be kept in touch about the dates for the 2026 ESG survey which will be open from Tuesday 26th May 2026 to Friday 24th July 2026.

Suneet Sharma FRSA is a Governance Consultant at Eastside People, specialising in charity compliance and regulatory reporting. With a First Class law degree and five years’ experience advising boards on governance best practice, Suneet brings both legal rigour and practical insight to complex compliance matters.