This reserves policy has been drawn up in accordance with guidance set out by the Charities Commission in June 20101.
This guidance requires any income received by a charity to be spent within a reasonable period of receipt. Reserves may be held to ensure the charity’s solvency and allow the charity to continue to pursue its charitable aims.
BAPEN is a relatively small charity with an annual turnover from £300-450k per year. Its main income derives from its membership (individual members and industry sponsorship) and its annual conference (although in 2008, conference did incur a loss of £1675). Expenditure relates to contracts awarded for the running of the charity and its activities and to on-going projects. These include the BAPEN office, PR and communications, BAPEN website, the BAPEN newsletter for members and the development and running of the BANS database.
BAPEN reserves policy is to hold as a reserve a sum equivalent to the annual costs incurred by the agreed contracts in place. This should be kept in savings accounts with banks or building societies, with no more than the amount covered by the FSCS2 in any one bank or building society. The current account should operate with no more than the amount required for 1 month’s expenditure (£30-40k). An amount equivalent to 3 months expenditure should be kept in an instant access account, the remainder should be distributed amongst accounts offering higher interest rates, but with a maximum of 90 days notice of withdrawal required.
The target level of reserves should be reviewed on an annual basis at the beginning of the financial year (January) and take into account income from the previous year’s conference and sponsorship from industry. Projected expenditure should include the on-going contractual commitments and agreed projects and awards for the coming financial year, as discussed and agreed by BAPEN Council.
The level of reserves should be monitored throughout the year, with a view to corrective action should the levels of reserves deviate more than 20% from target in either direction. The level of reserves will be discussed as part of the Treasurer’s report to each Council and Executive meeting.
Target range for BAPEN reserves 2015
|Industry sponsorship for 2014||£61,000|
|Conference income from 2014||£52,385|
|Other (grant from DOH towards development & maintenance of BANS – annual)||£43,722|
|Expenditure (estimated for 2015)|
|BAPEN Office (including conference and running costs)||£61,500|
|PR & Communications||£60,000|
|BAPEN e-learning (DDF modules and junior doctors update)||£12,000|
|DDF loan outstanding||£25,000|
|Total projected financial commitments||£233,000|
Forecasts for 2015
It is clear that industry sponsorship has been declining in recent years and because of the BAPEN involvement from DDF we have needed to separate out sponsorship and exhibition at conference. However, worked with industry on developing new proposals and are reassured that industry remain supportive of our charitable aims. It is also true that the current financial climate is challenging and people are finding it more difficult to attend conference. However, our income from DDF 2012 was good and the BAPEN annual conference has had a good track record in recent years. Although at present predicted profit from DDF 2015 is marginal, the same was true of DDF 2012 at the same stage in planning and DDF 2012 income exceeded expectations, so the forecast would be that we should see a surplus from DDF 2015 in addition to the return of the loan to the DDF Company (£45,000). BAPEN will continue to develop resources for its members and work to promote the importance of good nutritional care. It will look to increasing the number of individual members and finding additional sources of funding for particular projects.
The target level of BAPEN reserves for 2015 is therefore set at £235,000. This will be reviewed as part of the Treasurer’s report at every Executive and Council meeting.