Provisional Annual Report 2019 – 20 An interim report, in advance of the formal publication of our Consolidated Annual Report & Accounts 2019 - 20
For Soldiers. For Veterans For Families. For Life
Contents
Executive Summary
p.2
Overview 2019-20
p.3
Charitable Activity
p.3
Income and Expenditure
p.4
Case Studies
p.4
COVID-19: Our Response
p.5
Looking Ahead
p.6
Financial Performance 2019-20
p.7
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Executive summary In advance of the formal publication of our Consolidated Annual Report & Accounts 2019/20 (delayed by the practicalities of conducting a full audit under current circumstances), this short report seeks to: • •
outline our FY19-20 performance; and provide some insight into how we are currently responding to the impact of the COVID-19 pandemic.
Our FY19-20 financial performance was relatively successful, despite a fundraising environment that was already difficult pre-COVID. An income of £14.8m was generated from a wide range of sources and we were again able to provide substantial and global support to the Army family. Charitable expenditure was £12.2m, with which we were able to support over 70,000 people in 62 countries worldwide. This was achieved via our individual grants programme and by providing essential funding for 89 other charities and organisations to enable them to deliver specialist services to the Army family. We take very seriously our role as one of the biggest providers of grants to other charities and organisations in the military charity sector. Turning to our COVID-19 response, we continue to operate on a ‘business as usual’ basis (and have done so throughout the crisis), making substantial grants in support of the Army family and having moved seamlessly to effective remote working. Our board had already foreseen not only a more challenging period for Armed Forces charities but also a potential end to the then-current economic cycle and adjusted our liquidity accordingly. Since the onset of COVID-19 we have further drawn down on our reserves, as well as taking advantage of government support schemes, to ensure we can continue to operate effectively for the foreseeable future. That said, we need to ensure that the charity can continue to provide support to those in need over the long term, so we have a very close eye on our free reserves and shall rebalance our operations accordingly. Whilst clearly we collectively face a challenging future, we also regard the present circumstances as a period of opportunity to help drive change across our sector. We would like to think that our posture has been true to type: a safe and trusted pair of hands that can be relied upon whatever the storm.
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Overview 2019-20 Despite an already difficult fundraising environment, FY19-20 was a relatively successful year: generating an income of £14.8m (FY18-19: £17.7m) and delivering a deficit of £3.34m, not including investment losses (FY18-19: a deficit of £5.22m). This yet again demonstrated the charity stretching itself in already challenging times to deliver to those in need. The year-on-year disparities included the charity receiving a final LIBOR payment of £1m in FY18-19; its subsequent expenditure, along with other previously received LIBOR grants, in FY19-20; and the near-finalisation of a major legacy. Income came from the normal wide range of sources such as donations from individuals, trust and foundations; direct marketing appeals; legacies; high-profile events and income from investments and cash deposits. We are extremely grateful to every person and organisation that makes our grant-making possible. Charitable Activity Charitable expenditure was £12.2m, representing an increase of some 19% on the previous year – excluding our one-off £7m grant to the Defence and National Rehabilitation Centre in FY18-19. This steep increase was largely due to the expenditure of £2.1m from past LIBOR funding that was awarded to us for two important projects: to help improve childcare and community centre facilities for Army families in disadvantaged locations and to enable a bespoke welfare service for the Armed Forces community in hospitals across southern England, working in partnership with the Defence Medical Welfare Service. We thank the Chancellor of the Exchequer for his confidence in our governance of these substantial funds. We dispensed £3.9m (FY18-19: £3.7m) as grants to individuals and spent £5.9m funding 89 other charities and organisations operating across 62 countries worldwide – all of which provide support to the Army family. For many of these charities, we are often consistently their single biggest source of funding year-on-year. In addition to these two major grant-making programmes, we also spent £2.4m on charitable activities that fall outside our core business of making grants but are key to ensuring soldiers, veterans and their immediate families’ needs are met in a timely and effective manner. This expenditure included funding the sector-wide casework management system, undertaking due diligence and administering funds on behalf of others. This again demonstrates our key role in not only delivering our own support but also providing wider assistance to the sector. Individual grants remained relatively stable. We assisted 4,534 people in FY19-20 (4,528 in FY18-19), but there has been a general increase in the cost of individual grants. As is normal our support is truly “for life” with individuals supported aged from a oneyear-old baby to a veteran aged 102, with the average beneficiary being in their late 40searly 50s. Most of our casework is provided by our key partners: 63% is received from SSAFA, 18% from The Royal British Legion and the remainder comes from various other sources. 3
Our external grants programme supported a plethora of needs including, but not exclusively, elderly care, the provision of mental health services, employment and training, bereavement services, housing, and facilities providing advice and guidance. Grants included significant awards to the likes of Broughton House (£96,000), Royal Commonwealth Ex Services League (£200,000), Combat Stress (£250,000), SSAFA (£295,000), RFEA The Forces Employment Charity (£398,146) and smaller discrete grants to organisations such as the Army Widows’ Association (£32,000) and the Rainbow Trust Children’s Charity (£15,000). Income and Expenditure The total cost of raising funds was £5.9m (FY18-19: £5.7m) as we invested slightly more in income-generating activities. We continue to bear the entire cost of raising and administering funds, which we then pass on for free to our 89 delivery partners. Total expenditure decreased to £18.1m (FY18-19: £22.9m), largely due to last year’s substantial grant to the Defence and National Rehabilitation Centre (more than £7m). Regarding our investment portfolios, they showed a significant loss of £3.62m at year end (FY18-19 gains of £5.05m), given the market reductions in March 2020 (the final month of the reporting period). Since then the funds have regained much of their value – we continue to take a long-term view and manage our resources accordingly. Case studies Here are two examples of the support we have provided over the past year, via our individual grants programme (Holly) and via our grants to other charities and organisations programme (Combat Stress). How we helped Holly Holly was 19 when she joined the Army. She served with the Royal Electrical and Mechanical Engineers for seven years, including an operational tour of Iraq in 2003. After leaving the Army, Holly struggled with her mental health and found it difficult to hold down a job. But with the help of the Poppy Factory – one of 89 charities funded by our charity this year – she decided to launch The Hangry Lemons café in the indoor market of her hometown of Carlisle. Holly runs the café with her partner, Hannah. They applied to our charity for help with a kitchen refurbishment to get the café up and running, and the business got off to a great start. The café was closed due to the coronavirus pandemic, but Holly and Hannah look forward to welcoming customers back as social distancing restrictions lift.
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Supporting Combat Stress This year, we were delighted to continue our substantial support for Combat Stress with a £250,000 grant towards its work with veterans battling complex mental health conditions. Formed in the aftermath of the First World War, the charity offers therapeutic and clinical community and residential treatment to former members of the British Armed Forces who are suffering from a range of mental health conditions, including Post-Traumatic Stress Disorder. Our grant will support Combat Stress as it adapts its service provision in response to the COVID-19 pandemic. This includes its 24-hour helpline, alongside a new programme that provides holistic and flexible therapy via video link. In the past year, Army veterans attended 11,719 appointments at Combat Stress, including individual counselling, group sessions and residential treatment. COVID-19: Our Response Our response to the pandemic is that our support to the Army family must continue unabated – as you would expect from the Army’s national charity. Despite working remotely, our grants office continues to operate as normal, although the provision of casework has required some adjustment. Since lockdown began in March, we have distributed in excess of £1m to over 1,100 individuals in need. A further £1.8m plus has been provided via our grants programme to some 20 other charities and organisations that support the Army family; and this has included some substantial six-figure grants. Current levels of need appear suppressed as individuals hunker down and the other charities and organisations we support postpone or cancel programmes so do not need to draw down funding from us. That said, our sector is quite clear we will face an autumn bow-wave of grant applications as furlough ends and the real scale of economic damage becomes more apparent. The onset of COVID-19 and lockdown has caused us significant difficulties – not least that our annual programme of some 600 events nationally and regionally was effectively closed, leading to a 50% reduction in our core fundraising income. That said, we have been hugely grateful for tremendous continued support and a real growth in ‘virtual’ events. Noting a more difficult context for the sector at large, and some nervousness over market valuations, we had already taken steps to move a substantial tranche of capital into cash towards the end of the last financial year and so entered the crisis in good shape with adequate liquidity.
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Looking Ahead We were clear last year that our sector faced serious headwinds for a variety of reasons, which, however robust our position might be, will inevitably impose a burden on our charitable expenditure. We had already demonstrated our willingness to make strategic interventions using our reserves with our £7m plus grant to help set up the new Defence Medical Rehabilitation Centre at Stanford Hall. Now we have taken further steps to adjust our operations to meet the new challenges. To help guarantee our ability to meet our ongoing commitments without having to liquidate devalued assets, we took advantage of the government’s VAT deferral scheme and have also borrowed £2m through the Coronavirus Business Interruption Loan Scheme (CBILS). We further released additional capital to guarantee our operations until at least the next financial year. In summary, during FY 19-20 we released some of our free reserves and this financial year we sold a further £4m from our investments – avoiding the period of much-reduced capital values during this spring. Our board is clear that our reserves exist to safeguard our operations in time of crisis, like now, but equally we need to preserve our long-term ability to act as the Army’s ‘strategic reserve’ for benevolence. As we rebalance our own operations, we continue to play a key role in encouraging the wider sector to further collaborate and consolidate. We are clear that the current exceptional circumstances provide opportunities as well as risks. With the financial pressures that have been brought to bear by the current crisis, our sector will face some consolidation and we are key stakeholders in work underway to shape that change rather than merely be subject to it.
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Financial performance 2019/20 Drawn from the Annual Report and Consolidated Accounts for the year ended 31st March 2020 FY2019-20
FY2018-19
ÂŁ'000
ÂŁ'000
Donations and Appeals
4,324
4,550
Legacies
3,686
7,057
8,010
11,607
Donations from Regimental & Corps charities and individuals in Army Units
1,678
1,815
Income from Investments
2,129
1,234
Other trading activities
2,960
3,046
Total income
14,777
17,702
Grants to individuals through Regiments & Corps
3,925
3,736
Grants to other charities and organisations
5,863
11,293
9,788
15,029
2,394
2,236
12,182
17,265
Raising funds and trading activities
5,932
5,659
Total expenditure
18,114
22,924
Net expenditure before net gains/(losses) on investments
(3,337)
(5,222)
Net gains/(losses) on investments
(3,616)
5,045
Net expenditure for the year
(6,953)
(177)
Fund balances at 31st March
77,910
84,863
Income from:
Expenditure on:
Grant making and other support costs
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CONTACT DETAILS Head Office and Regional Offices Head Office ABF The Soldiers’ Charity, Mountbarrow House, 6-20 Elizabeth Street, London SW1W 9RB T. 020 7901 8900 E. supportercare@soldierscharity.org
North East ABF The Soldiers’ Charity, Hipswell Lodge, Smuts Road, Catterick Garrison, North Yorkshire DL9 3AX T. 01748 874 127 E. northeast@soldierscharity.org
East Anglia ABF The Soldiers’ Charity, Building PO4, Room 6, Merville Barracks, Circular Road South, Colchester, Essex CO2 7UT T. 01206 817 105 E. eastanglia@soldierscharity.org
North West ABF The Soldiers’ Charity, Fulwood Barracks, Preston PR2 8AA T. 01772 260 356 E. northwest@soldierscharity.org
East Midlands ABF The Soldiers’ Charity, Chetwynd Barracks, Chilwell, Beeston, Nottingham NG9 5HA T. 01159 572 103 E. eastmidlands@soldierscharity.org London ABF The Soldiers’ Charity, Block 7 (Room G39), Wellington Barracks, London SW1E 6HQ T. 0203 903 6030 E. london@soldierscharity.org Northern Ireland ABF The Soldiers’ Charity, Building 115, Thiepval Barracks, Lisburn BT28 3NP T. 02892 678 112 E. ni@soldierscharity.org
Scotland ABF The Soldiers’ Charity, The Castle, Edinburgh EH1 2YT T. 0131 310 5132 E. scotland@soldierscharity.org
Exeter Office, ABF The Soldiers’ Charity, Wyvern Barracks, Exeter, Devon EX2 6AR T. 01392 496 412 (Exeter office) E. southwest@soldierscharity.org Wales ABF The Soldiers’ Charity, Maindy Barracks, Whitchurch Road, Cardiff CF14 3YE T. 02920 726 132 E. wales@soldierscharity.org West Midlands ABF The Soldiers’ Charity, Building V5, Venning Barracks, Donnington, Telford, Shropshire TF2 8JT T. 01952 674 369 E. westmidlands@soldierscharity.org
South East ABF The Soldiers’ Charity, Robertson House, Slim Road, Camberley, Surrey GU15 4NP T. 01276 412 673 E. southeast@soldierscharity.org South West Bulford Office, ABF The Soldiers’ Charity, Bldg 750, Picton Barracks, Bulford Camp, Salisbury, Wiltshire SP4 9NY T. 01980 672 337 (Bulford office) E. southwest@soldierscharity.org
Registered with
The Army’s National Charity
ABF The Soldiers’ Charity is a registered charity in England and Wales (1146420), in Scotland (SC039189) and registered as a company limited by guarantee in England and Wales (07974609).
