Financial Overview

Financial forecasts

In entering the merger, both sides knew that the financial environment was challenging and that whilst there were some immediate benefits from a cost perspective, the financial benefits of the merger would be realised over a longer period through the stronger fundraising ask and the opportunity to create a sustainable financial relationship with the network partners. We divide our charitable activities into two separate streams:

  1. Core activities - those activities where we employ people to carry out the charitable work, be it helping carers directly or helping our network partners deliver their charitable activities; and
  2. Grant giving activities – those activities where we provide grants to carers directly, our network partners or other organisations to allow them to help carers have a better life.

Our four year financial plan is as follows – please note that the £5m income from The Co-operative Charity of the Year 2013 partnership is not included in the figures below as this is a restricted fund against specific spend on 5 young adult carers programmes

Whilst the total deficit being reported will remain in the order of £1 – 1.5 million per annum for the next three years the deficit is driven by a reduction in the deficit in core activities whilst the grant programme has more grants being made than income raised.

The path to sustainability consists of three main focus areas:

  1. An improved fundraising ask for core activities – increase of £600k over four years
  2. A reduction in the cost base as a result of synergies arising from the merger - £560k saving in 2013
  3. Development of other core income generation methods

Fundraising

Whilst the fundraising environment for charities remains challenging, the fundraising team at PRTC found it more difficult to engage with funders during the merger period than usual due to the inherent uncertainty that arises during that process, therefore there was very little new business activity under any of the income streams and funding secured was, for the most part, for one off rather than multi-year donations and restricted to grant or new investment activity.

However, since Carers Trust launched, significant progress has been made across the various income streams, with multi year commitments now being secured, both for grant and new investment, but also for core funding, and, of course, the fantastic success of The Co-operative Charity of the Year 2013 partnership.

The decision has also been taken by the Board to invest in the individual giving area, from 2014/15 onwards, in order to attain the longer term sustainability required for the unrestricted income stream, with exciting plans underway for an integrated campaign during 2014 to co-incide with the uplift from The Co-operative partnership.

We are looking to increase our fundraising through focusing on trusts, individuals, major donors, events and corporates which will offset the anticipated decline in statutory and lottery funding. The focus of our fundraising efforts is illustrated in the graph below – please note that the £5m from The Co-operative Charity of the Year 2013 partnership is not included

In addition to the income streams set out above Carers Trust will be exploring other forms of income generation outside the voluntary fundraising and membership fee areas. In light of the past performance and the stronger ask, the board are comfortable that the forecasts are achievable.

Financial Strength

Carers Trust has been fortunate to be gifted a strong balance sheet from the predecessor charities which allows it to fund essential activities for carers over the coming few years whilst we achieve sustainability. To assess the strength of the balance sheet we strip out those restricted reserves which are held in order to provide grants to network members and others in order to assess our ability to continue with our core strategic activities.

At the start of Carers Trust’s life we held reserves equivalent to 7 months of core spend. During the period of operating through the path to sustainability Carers Trust will draw on these reserves to ensure that carers get the support they need as follows.

Cost breakdown by purpose – 2012/13

This shows over 75% of our actual cost base in 2012/13 was focused on direct charitable activities.

As expected with service-based organisations, the cost of running Carers Trusts charitable activities are heavily staff focused with 65% of the ‘core’ cost base being staff costs as shown below:

Cost base breakdown 2012/13