Are your trustees ready? Preparing for the new SORP impact reporting issues

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From January 2026, new rules around reporting for charities came into effect. The Charities Statement of Recommended Practice (SORP) sets out what different charities are required to report on based on their income:

• Charities with a gross income below £500,000 are classed as Tier 1.
• Charities with an income of above £500,000 but below £15 million are classed as Tier 2.
• Charities with an income in excess £15 million are classed as Tier 3.

For charities in the Republic of Ireland, the thresholds for each tier are calculated in euros instead of pounds but the threshold values are the same to provide consistency as exchange rates move.

Impact reporting requirements

SORP outlines specific expectations for how charities report on their achievements as part of the annual report.  

Tier 1 charities are required to provide a summary of their main achievements and address two core questions:

1. In what way has the charity’s work made a difference to the circumstances of its beneficiaries?
2. Has the charity’s work provided any wider benefits to society as a whole?

The emphasis at tier 1 is on a strong, coherent story. For tier 2 charities, there is a greater emphasis on performance. Tier 2 charities must answer the tier 1 questions and also cover:

• How well the charity carried out its activities.
• How any successes in the reporting period supported the overall aims of the charity.
• How well have any investments performed against their objectives.
• The impact the charity has made, considering the long-term impact on individual beneficiaries and on society as a whole.

The aim here is to more clearly show the link between charitable aims and outcomes. Tier 3 charities take this a step further. They must meet all requirements for tier 1 and 2 charities, and must also review two additional subjects relating to fundraising activities:

• The performance of any fundraising activities against their objectives.
• Where money was spent to raise income, this must be explained, along with the effect this has had, or is expected to have on future fundraising.

Evidence, and what SORP doesn’t require

SORP sets no specific requirements regarding methodology, measurements, benchmarks and language. Charities are free to use whatever evidence they hold to demonstrate their impact so long as it is proportionate to their size. There is no expectation on any charity to have completed in-depth impact reporting using extremely rigorous measures.   

Preparing for SORP

• Ensure expectations are clear

The first step is to ensure senior leadership and trustees are clear as to which set of questions applies to their charity. This is especially important for charities that sit close to a tier boundary. Preparing for the highest level of requirements you may need to report on will prevent you needing to pivot at short notice and sets you in good stead for future reporting. SORP encourages smaller charities to include the additional information required for larger charities if trustees consider it to be relevant and charities close to a boundary are most likely to benefit from including additional details.

• Gather the evidence you already hold and confirm how it aligns with your charitable aims and activities

It’s very likely that you capture a significant amount of evidence of impact already. SORP encourages the use of infographics, statistics, beneficiary and volunteer testimonials as forms of evidence. Other relevant examples of things you may already hold include monitoring data, funder reports, staff observations, and feedback forms.

• Plan how to address any gaps

While SORP doesn’t prescribe specific methods, they do expect your evidence to be proportionate. If you identify gaps, put processes in place at the earliest possible opportunity. For charities and tier 2 and 3, make sure your planned evidence will demonstrate links between your activities and the outcomes.

• Reflect on both the good and bad

SORP does not expect charities to only report on the positives. Tier 2 and 3 charities are explicitly asked to report on significant positive and negative factors that have had influence on the extent to which they have met their goals. They are also asked to reflect on how this has impacted future plans. You can prepare for this by recording lessons learned on a regular basis and linking these to current or planned changes in delivery. While this is a specific requirement for larger charities, it’s something all charities can benefit from.

Take action now

Acting now will significantly reduce risk and ensure your charity is confident, compliant, and well positioned for 2026 and beyond. The Charity Spark works closely with Trustees to make sure the right evidence is in place and to clearly demonstrate how impact supports the charity’s aims and long‑term strategy. Contact us for an informal, no‑obligation conversation.