Charity Finance Group restores reserves to target levels, accounts reveal

The accounts for the year to the end of March this year show that the body made a surplus of £245,433, compared with a loss of more than £160,000 in the previous year

CFG: reserves in better shape
CFG: reserves in better shape

The Charity Finance Group has restored its reserves to within target levels after a restructure and office move reduced them to about a third of the membership body’s minimum amount.

The CFG’s report and accounts for the year to the end of March 2015, published yesterday, show that it made a surplus of £245,433 during the year, compared with a loss of £160,575 in the previous year.

The accounts show that its income increased by 7 per cent during the year to £1.8m and expenditure fell by 16 per cent to £1.6m.

They also show that the CFG increased its free reserves to £184,271 in 2014/15 – which, the report notes, is right at the lower end of the target range, set at £180,000 and £225,000.

The accounts say the umbrella body had planned to restore its reserves to target levels over three years but had managed to achieve this over one year.

Among the reasons given for the increase in income are higher attendance at events and training courses, a rise in membership levels and therefore income, and better returns from the organisation’s annual fundraising dinner.

The fall in spending happened because there was no repetition of some specific costs in 2013/14 through the CFG’s change programme, improved efficiency and better procurement, and savings from delays in recruitment to some roles.

Earlier this year, Uday Thakkar, managing director of the social change consultancy Red Ochre, resigned after three years as a trustee, citing "management and governance shortcomings" and "defensive and negative responses" to any challenge he made to the organisation’s strategy or direction.

This happened after two special advisers at the CFG, John Tate and Gill Gibb, resigned last year after an office move, a restructure and accounting revisions reduced the CFG’s reserves from £251,000 to £61,500.

The report says: "In last year’s annual report, we reported that CFG had invested a significant portion of its free reserves in undertaking a change programme in our staff structure, and the relocation of our offices, and that as a result our free reserves had decreased to £61,586.

"Implementing any change programme can be difficult, and we have experienced many of the normal issues that are to be expected when implementing a new strategy.

"Despite these issues, 2014/15 has been a very positive year and we have been able to recover our free reserves position earlier than anticipated."

A CFG spokeswoman said the organisation dipped into its reserves for its change programme in 2013/14, but it did it "in an informed manner, and we’re confident that the decisions we took were the right ones – as the year of growth we’ve seen attests".

She said: "We did see some resignations as a result of the change programme we undertook. All significant change programmes are difficult, with their ups and downs, and it has not been different for the CFG. Getting the right mix of skills in the organisation is crucial, and we confident we’ve achieved that.

"We were sorry to say goodbye to some members of the CFG team in the first half of 2014/15, but have been pleased to welcome new people with an injection of new skills and approaches, and the positive impact of that has already been seen in the results this year."

Caron Bradshaw, chief executive of the CFG, said the results showed that its change programme was working. "CFG has seen growth both financially and in terms of the positive impact we can have for our members and the wider sector," she said. "We’ve worked hard to improve our operations, culture and mix of skills, and I’m pleased that the decisions made have taken us where we wanted to go."

Salary costs fell from £642,651 to £563,976 because of delays in recruitment, the report says. The average full-time-equivalent number of staff remained at 17.

The report says that Bradshaw was its highest-paid employee and received a 4 per cent increase in her annual salary from £88,432 in 2013/14 to £91,967 last year.

Asked to justify the increase, the CFG spokeswoman said: "It’s a role that requires a lot of very specialist financial knowledge, combined with strong leadership skills and the ability to be the spokesperson for us on a range of technical issues."

She said the salary was set by a remuneration committee that meets annually to determine the chief executive’s salary.

The report notes that there were no related transactions in 2014/15 but says that in 2013/14 Bradshaw’s brother, trading as AG Commercial Interiors, was given a contract to provide £13,080 of office partitions.

The report notes this was a "highly competitive price" and says the contract was awarded after a competitive process.

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