For the year ended 30 September 2022
For the year ended 30 September 2022
The Foundation remains well-placed financially to deliver its long-term objectives, thanks to the funding agreed by CareTech as set out in the Donation Agreement between the company and the Foundation settled in July 2019.
This year saw a welcome growth in income from the company’s annual donation and an additional restricted donation to support the growth of the Foundation’s Staff Hardship Fund. As highlighted above, the sale of CareTech plc provided the Foundation with a significant cash boost and the opportunity for the Foundation to implement its long-term investment and income diversification strategy.
Providing the Foundation with sufficient clarity as to the likely funds at its disposal over at least the medium-term ensures the best possible opportunity for it to deliver impact. The Board of CareTech plc, in establishing the Foundation, fully accepted the importance of settling clearly the funding basis for the Foundation moving forward, enabling it to focus on delivering impact and reinforcing its independence. The Donation Agreement provides for an annual donation of 2.5% of the company’s pre-tax profits.
CareTech complements its financial donations by supplying significant in-kind support, such as office accommodation, back office systems and staff expertise. We have established systems to capture and attribute the full value of CareTech’s support to the Foundation, which includes:
In this current year, the overall value of this in-kind support has been valued at just over £8,000.
As noted elsewhere in this Report, trustees have established an Income Diversification Strategy. The benefits of diversification of income go far beyond simply achieving an income surplus; diversification also gives organisations the security needed to focus more on long-term strategies and ultimately have more impact for their beneficiaries. The aims of the Foundation’s income diversification strategy, therefore, are:
As noted above, CareTech plc has over the last three years made a restricted donation to the Foundation – over and above its main annual donation – to support the Foundation’s Staff Hardship Fund. This year’s restricted donation in this regard remained at £50,000, all of which was committed during the year. Those funds provided for Championing Social Care programmes, as detailed above, are also treated as restricted income.
A formal budgeting process, scrutinised by the Trustees’ Audit & Risk Committee and approved by the full board of trustees, in in place. Trustees’ budgeting is based on conservative estimates and a small amount of in-year unallocated funds, in addition to the Reserves target noted above, to allow for any significant unforeseen expenditure. The Foundation uses the xero.com accountancy system, with additional accountancy and payroll support provided by Cater Chartered Accountants Ltd, to manage the Foundation’s finances and monitor performance against budget. The trustees have also approved a Financial Handling Manual that sets out all necessary financial systems for the Foundation, which is reviewed at least annually.
Trustees are provided with a monthly financial report as part of the CEO’s regular report and further scrutiny is undertaken by the Audit & Risk Committee as well as the full Board of trustees.
As a medium-sized charity, trustees recognise that we need to invest our funds wisely and safely but have also agreed that we wish to back innovative programmes. With innovation comes higher potential impact but also, of course, higher risk. As trustees, we have agreed that we have:
In line with the above risk statement, the Foundation maintains free unrestricted reserves:
Last year, trustees updated the Foundation’s Reserves Policy to establish a target of maintaining free reserves equal to six months of staff and associated costs. This amounted to approximately £150,000 based on the
Foundation costs approved by trustees in the Business plan. At the end of this Financial Year, the Foundation held £489,350 of free reserves. This reflects the full reserves held by the Foundation, less its fixed assets and the proceeds of its investments.
The Trustees will review their investment strategy and reserves in 2023.
Trustees have considered carefully the position of the Foundation as a going concern throughout the year and is confident that the charity remains well-placed in this respect. Trustees base this assessment on the following factors:
The Foundation has no material pension liability.