Posts Tagged ‘Reserves’

A Dickens of a Going on at The Retailers Charity

FASHION & TEXTILE CHILDREN’S TRUST 257136

In the 19th century when Charles Dickens was chairman this charity was called the ‘Warehousemen & Clerk’s School’ subsequently renamed Purley Children’s Trust, The Textile Industry’s  Children’s Trust and now glorying under the current name and focus. It helps the children of folk who have worked for more than a year in clothing retail, clothing manufacture, laundry or fashion.

Even today these sectors seldom offer secure, well paid jobs. In the UK the demise of so many retail outlets and foreign clothes imports has added to the stress such a charity may feel on behalf of their ‘clients’. Indeed they have helped 547 children at a cost of £198,184 this year but currently report on the website ‘…just a quick note to say we know we’ve been a bit quiet on this front recently. We’ve had a few comings and goings over the last few months, so things have been a bit up in the air!   ..’

I wanted a charity in this space where I could be positive and able to help as I can envisage a significant need. Large corporate mismanagement, high street closures, pension and redundancy problems must be depressing for staff in these areas. After looking through their reports and accounts  I have a couple of issues.

  • They have £8,950,000 pounds in reserves potentially built up over many decades of prudent even parsimonious policies and a school sale. At current levels of new grant  money already in the bank could cover 30 years further grants.
  • Have the charity added ‘Fashion’ to be in the fashion of broadening their remit to attract more requests from grantees? Is there an inclination to add to the core charitable remit rather than excelling on the real job to be done.
  • Salary costs are conservative but the ‘cost of raising funds’ at £95k is too high when only £36k is raised from donations and trading. The main 95% of  income comes from historic investment income. Hence there is little or no incentive for new donors to become involved.
  • The 600+ year old Drapers Company 251403 makes grants in similar areas including Education and Young People , Social Welfare and Textiles and Heritage with it’s £65m funds. Despite a higher income, reserves and profile I am still not sure they do a better job.

Accountant Who Stash it Away

CHARTERED ACCOUNTANTS’ BENEVOLENT ASSOCIATION (CABA) no 1116973

We bleat on about high reserves and excessive investments so it should be no surprise to find a conservative profession like the Institute of Chartered Accountant should have tucked away 25 years worth of current expenditure in it’s own benevolent association reserves.

2016 Accounts (the latest available)

  • Uncommitted reserves of £117m are covered by cash, debtors and investments.
  • The average expenditure over 5 years is £3.7m (although last year it increased to £4.6m) equal to 31 or 25 years expenditure even assuming no new income!
  • The investment management fees and costs of generating investment income are not an insignificant £184,000 pa. How much more hidden in the transactions and cost of fund management is not stated.
  • Dividends and interest on investment were £2,221,000 gross resulting in  a cost equal to 8.3%.
  • ‘The Trustees say they continue to monitor the level of reserves and acknowledge that, although substantial, they’re appropriate at their current levels….’  Let us hope this does not presage a flurry of inappropriate new vanity ventures.

Despite a recent PR puff piece we will have to wait another 6 months to get an update on the financial position for these Chartered Accountants in need!

 

Clothing Charity Stitch Up

CAPITB Trust 1000290 succeeded  the Clothing and Allied Products Industry Training Board as a perpetual trust or for as long as the industry has a requirement. (Or as long as the money lasts?) The chairman reports he is ‘pleased with the increase in the distribution of grants paid out in 2016. In total, the amount granted was £50,100 versus £42,000 the prior year.’ (No big deal)
The charity has over £3m in unrestricted funds but two non-charitable subsidiaries each made trading losses totaling over £100,000 in 2016 and further investment losses contributed to a reduction in reserves of in excess of quarter of a million pounds.
The Clothing and Allied Products Industry Training Board had its roots in West Yorkshire. Alongside many notable businesses in the industry they were part of the then ‘Northern Powerhouse’. This is shown by the location of the professional advisers and former bankers Yorkshire. It is hard to detect  this trust is going to help make these industries great again.

Principal activity

Charity -The promotion of education and training for the public benefit of those employed or intended to be employed in the British apparel industry.
CAPITB Limited – Provision of training and technical consultancy services
RTITB Limited – Property rental

Suggested activity

Sell the consultancy business, sell the property, eliminate the pension and staff millstones, improve investment management and become a small grant giving charity without all the baggage.

Old Charity for Old Folk

THE ROYAL UNITED KINGDOM BENEFICENT  ASSOCIATION 210729
For over 150 years this charity and it’s forerunners have provided support for the poor and elderly. The original goal was to prevent destitution by providing those in poverty with a small, regular income for life.  In 2011 they merged with two other charities, Counsel and Care and the Universal Beneficent Society to form a combined organisation under the title Independent Age.
Current service provision is clearly focused in three areas
Information and advice, Friendship services and Campaigning or Speaking up for Older people. A justifiable claim is that ‘Independent Age can provide you and your family with clear, free and impartial advice on the issues that matter: care and support, money and benefits, health and mobility. ‘ On average over the last 3 years they spend  £10m per annum on these activities plus fund raising and admin.
At the end of 2016 they had very strong reserves and  £178,000,000 of investments in shares and property. This has been built up over many years boosted from the sale of residential property they formerly operated as residential homes.  This causes a couple of concerns :
  1. Half a million pounds per year is spent on Investment and Property Management Costs. There may be hidden transaction costs of buying and selling about 75% of the portfolio every 12 months.
  2. A further concern is how  money will be deployed across the mix of charitable aims between the key tangible service provision, political campaigning and awareness development.
  3. With this scale of reserves and investment is fund raising a necessary blessing or a curse. Current website requests for support include ‘£1,000 could help recruit and train 4 volunteers to provide friendship visits to lonely older people’