Comic Relief investment income fell by £2m last year

The charity also says it spent £60,000 on lawyers defending itself against a critical BBC Panorama programme

Comic Relief: reviewed investment policy
Comic Relief: reviewed investment policy

Comic Relief’s income from investments fell by more than £2m last year as a result of action recommended by an investment review that followed a BBC Panorama programme that revealed the charity's holdings in alcohol, arms and tobacco companies.

The figures appear in the Comic Relief accounts for the year to July 2014, filed with Companies House this week, which also show that it spent £60,000 on lawyers defending its position in relation to the Panorama programme.

The accounts show that its income from investments fell by £2.2m last year, from almost £6.1m in 2012/13 to £3.9m a year later. Legal and professional fees totalled £87,000 in 2014, compared with £1,000 in 2013.

A spokeswoman for the charity told Third Sector in a statement that of the £87,000 spent in 2014, £60,000 was spent on professional fees "in response to" the Panorama programme and £16,000 on consultancy and advice relating to the investment review.

She said: "These costs were not paid for out of public donations." The charity's website says all costs related to overheads are covered by money raised from its corporate sponsors and donors, suppliers, generous individuals, Gift Aid and from investment income and interest.

The charity carried out a review of its investment strategy after the Panorama programme, broadcast in December 2013, showed that the charity had  invested millions of pounds in companies whose activities appeared to clash with the charity’s mission.

In May 2014, the charity announced that it would no longer invest in alcohol, tobacco or arms companies and would be more transparent about its investments after the review was concluded.

The accounts say that all the funds thought to be invested in areas of concern were removed while the investment review was taking place. This meant that it had to dispose of "a significant proportion of its investment portfolio" because most of the holdings were held in pooled funds, which generally invest in areas such as alcohol, tobacco and arms firms.

The accounts say that the proceeds of the sale were "£3.9m less than the market value recorded in the previous accounts" but exceeded their historic costs by £14.4m.

At the end of July 2014, the accounts say, the charity held £70m of its £135m investment portfolio in cash and it would be early 2015 before all the funds were reinvested.

The accounts describe the performance of the charity’s investments as "disappointing" but say that lower returns were to be expected after changes were made to the investment portfolio.

The accounts show that the charity had an income of £84.4m in 2014, compared with £114.2m the year before. The two years are not directly comparable, however, because the charity runs Red Nose Day, its most successful fundraising appeal, only once every two years. The charity alternates that appeal with Sport Relief.

The accounts say the Sport Relief appeal raised a record £71.8m in 2014. But the charity’s overall income for the year was £5m less than in the financial year to July 2012, the last time it ran a Sport Relief appeal.

The charity awarded grants totalling more than £81.8m in 2014 and spent £17.3m on generating funds.The highest earner was chief executive Kevin Cahill, who was paid £132,194, excluding pension payments.

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus