1 Annual Report 2017
Registered Charity (England and Wales) 802052. Registered Charity (Scotland) SC039557. Registered Company 04723022 2
CONTENTS ANNUAL REPORT 2017
REPORT OF THE TRUSTEES
Message from the Chair 4 Report of the Trustees 6 Raising Funds 8 Direct Public Support 8 Our Fundraisers 9 Corporate Partnerships 10 BBC Programmes and Events 12
Content 13 Finding and Funding the Inspiring Ideas that Change the Lives of Children 14 Grant Making Policy 15 Our Investment in Children 15 Insight 20 Strong Charity 21
3
FINANCIAL STATEMENTS
Financial Review 22 Future Plans 24 Structure, Governance and Management 26 Reference and Administrative Details 28 Statement of Trustees Responsibilities 29 Independent Auditors’ Report to the Trustees 30 Consolidated Statement of Financial Activities 32 Charity Statement of Financial Activities 33 Consolidated and Charity Balance Sheets 34 Consolidated Cash Flow Statement 35 Notes to the Financial Statements 36 4 Message from THE CHAIR
The year ended June 2017 was yet another record-breaker for the charity - £61 million, our highest ever total. This sum is already being put to work to help make a real difference to the lives of disadvantaged children and young people all over the UK.
Our ‘Do Your Thing’ fundraising campaign once more galvanised people across the country to come together in their thousands to help raise money. The ingenuity of the British public shone through in a wonderful variety of ways: from putting on cake sales, donning fancy dress, taking part in Zumbathons and sleeping in trees, to donating and buying Pudsey goodies. Corporate Partners sprang into action once again, motivating customers and colleagues alike to participate on behalf of Pudsey. And the generosity of supporters and sponsors was overwhelming throughout those campaigns.
As always, the BBC offered support as only they can. BBC colleagues across the Nations and Regions rose to the challenge, with Radio 2’s fantastic fundraising, led by Chris Evans; DIY SOS: The Big Build BBC Children in Need Special; BBC Children in Need Rocks for Terry; the Countryfile Calendar and Ramble; and, of course, The One Show’s Rickshaw Challenge with Matt Baker pedalling every mile with the team of young beneficiaries who wanted to give back…. and then there was the big show itself. Inspiring stories of children and young people overcoming disadvantage were at the centre of all of this, eliciting a tremendous response from generous supporters around the UK.
For the first time, we presented the Sir Terry Wogan Fundraiser of the Year award in memory of our beloved Life President. The award is for creativity and commitment rather than quantum and the inaugural honour was given to 11-year-old Lauchlan Muir. He raised money for the charity for 5 years by performing as a human statue. Lauchlan was inspired to help at an early age; he won a Pudsey bear in a raffle when he was five-years-old, and after watching the BBC Children in Need show that year, he decided to fundraise on our behalf in the following years. Many congratulations to him, and our thanks go to all of our wonderful fundraisers who do so much for the charity and for those who need our help.
Because of you, we are currently funding 2,562 projects to a total value of £154 million which touch every corner of the UK. Additionally, we continue to support children and families in crisis through our Emergency Essentials Programme; and to develop and deliver proactive programmes in areas where we identify a particular area of need.
In November, we were delighted to welcome a new Chief Executive to the organisation: Simon Antrobus. Simon has set out an ambitious strategy that aims to accelerate and increase our positive impact on children and young people; and which puts them at the heart of all our decision-making. I have every confidence that the charity now has the strongest team and is in the strongest possible position for the next phase of its evolution.
Sadly, this is my final year Chairing BBC Children in Need. It has been an honour to have led the organisation for the last nine years. In that time, we have faced some enormous challenges and enjoyed some tremendous successes. We’ve had some very high highs and some very low lows. And I am tremendously proud of all that we have achieved together – we have raised well over £400 million in that time, helping to change the lives of millions of children. I leave with so many special memories. And I have no doubt that my successor Rosie Millard, who joins the Board of Trustees from January 2018, will relish the role as much as I have. Many congratulations to Rosie on her appointment.
So for the last time from me, on behalf of BBC Children in Need, I would like to thank you again for everything you’ve done over the past year, and all that you continue to do in support of the charity. It really does make a lasting difference to the lives of the UK’s most vulnerable children.
And I’d like to say to the BBC, to Board Colleagues and to the Children in Need team - past and present - thank you for having me.
It’s been a pleasure and a privilege.
Stevie Spring Chair of Trustees 5 6
REPORT OF THE TRUSTEES
The Trustees of BBC Children in Need (who are also the directors for the purposes of the Companies Act 2006) are pleased to present this, their report and accounts for the period ended 30 June 2017, and incorporating the Strategic Report and the Directors’ Report required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. The accounts have been prepared in accordance with the Statement of Recommended Practice – Charities SORP (FRS 102) issued by the Charities Commission in January 2015, applicable Accounting Standards in the United Kingdom, Companies Act 2006 and the requirements of the Charities Act 2011.
Brief History Our objectives and activities UK. We take very seriously the Christmas Day 1927 saw the first are a crucial aspect of ensuring huge responsibility entrusted to BBC Appeal for children. Over maximum positive impact on us by members of the public time, the Appeal has evolved and disadvantaged children and young when they make a donation to 1980 saw the first Children in Need people. To ensure these activities BBC Children in Need – no matter telethon hosted by Sir Terry Wogan, are brought to life across the whole how small or large. Grant making Sue Lawley and Esther Rantzen. of the charity we have five new is a serious business. We need to organisational objectives. We focus match efficiency – making sure the The telethon’s 37th appeal was held on: being a strong charity, raising funds reach projects and support during this year. Since inception the as much money as possible, finding children and young people quickly Appeal has cumulatively raised over and funding inspiring ideas that whilst also retaining all important £911m for disadvantaged children changes the lives of children, using governance and rigour with every and young people right here in BBC content and programming to decision to fund a project. We the UK. help change lives and generating will ensure the standards we set valuable insight and evidence. This for allocating grants and funding Objectives & Activities is summarised below. continue to be the highest possible. During the reporting year we have developed further the objectives In order to maximise impact we Equally, we are acutely aware that and activities of the organisation. need to continue our focus on impact and improved outcomes for being a strong charity. These children and young people can also BBC Children in Need exists to are the essential foundations and be driven by the important stories of make a positive difference to the building blocks that enable us to families, children and young people lives of disadvantaged children and focus all of our efforts on delivering who have received much needed young people across the UK. Our great outcomes for children and support from the projects and refreshed objectives and activities young people across the UK. services we fund. Our connection will ensure the impact we have on and support from the BBC is a children’s lives is front and centre We know too that the needs of critical factor in this. Not only can of the work the charity undertakes disadvantaged children continue we raise valuable funds but we over and above the projects and and in many instances they are can also work with our colleagues services we fund. Our focus is on more complex and challenging across the BBC to ensure content finding and funding the inspiring than before. We are totally and programming on the BBC ideas that change children’s lives. committed to supporting children also contributes to changing lives and young people to overcome for children and young people. And whilst we know that every these challenges and realise their We can articulate the challenges child deserves a childhood that full potential. In order to do this, children and young people face but is safe, happy and secure, we we need to generate much needed also celebrate and champion the know too that a growing number income to fund these projects and enormous contribution children of children are experiencing ever services in communities across the and young people can have on their increasing and more complex UK. This means focussing on our peers and in their communities. levels of disadvantage. In order to aim to raise as much money as find and fund the inspiring ideas, possible. With all of this, bringing to life we will build on our commitment our strategy requires careful across the organisation to work We need to continue to focus on consideration of data, information collaboratively with all those who finding and funding the inspiring and evidence. Whilst we want to act share our aspirations for children ideas that change the lives of quickly to meet need and deliver and young people. children and young people. In the important outcomes for children reporting period we spent £62.8m and young people, we know we on 1,455 projects and services in can best do this when we generate communities up and down the valuable insight and knowledge. 7
We want every decision in BBC areas of disadvantage in years to remainder of the year totalled Children in Need to be an informed come. In addition to this strategic £14.4m. decision. work, successes were seen across the 5 areas of business focus. We publicly announced a total of Strategic Report £60m in July 2017 and since that The Trustees have approved this Raising as much money as possible date recognised additional income strategic report which provides Each year, we set ourselves the bringing our final total to £61.0m. an analysis of the Charity’s objective of maximising the amount This represents an increase of performance, its financial of income we raise to ensure that £4.2m (7%) on 2015/16 and is our position and an insight into the we have as much as possible to give highest ever total over the life of the Charity’s objectives and the risks to support disadvantaged children Charity. and uncertainties it faces. The and young people in communities report groups the headings of across the UK. We have begun the process of achievements and performance, strengthening our partnerships financial review and future plans. As declared on the Appeal show between BBC Children in Need and televised in November 2016, we our corporate supporters. We are The Trustees confirm that they raised an initial amount totalling extremely grateful to our corporate have referred to the Charity £46.6m which represents an supporters who through their staff Commission’s guidance on public increase of 12% on the previous teams raise large amounts of much benefit when reviewing the Charity’s year like-for-like. This increase needed funds for BBC Children in aims and objectives and in planning was driven primarily by increased Need. However, we know too that future activities and setting policies. support from our corporate partners our corporate supporters want to (£2.2m) and from broader support go even further and support key Achievements and Performance across BBC programmes and events areas of need for children and A key focus during the year was (£0.9m) and increased public young people. This year we have to refresh our strategic direction. support driven by the £20 text developed our partnership with We have welcomed a new Chief platform (£1.5m). ASDA to champion the power Executive and undertaken a of play in changing the lives restructure of the Executive Team, After the show, significant monies of children and young people. which will continue to be recruited raised through public fundraising This partnership has been a key and developed in the coming year. continued to flow into the Charity development in the reporting year and direct support from the public and was subsequently launched The strategy developed in this totalled £28.3m across the year and in November 2017. We will look financial year will set the path for together with follow-on income to develop more partnerships that the charity’s future growth and across both corporate and BBC respond to specific areas of need widening impact across a range of partners, our income across the over the coming years.
Split of Income Received
2016 2016/17 2015 2015/16 Appeal 2016/17 FINAL Appeal 2015/16 FINAL Income Growth Follow On income Growth Income Follow On income Income analysis £'000 % £'000 £'000 % £'000 £'000 £'000 Other fundraising 12,527 14% 9,839 22,366 9% 11,022 9,410 20,432 Schools fundraising 5,000 - 976 5,976 6% 83 5,563 5,646 Total direct public support 17,527 10,815 28,342 11,105 14,973 26,078 Corporate partnerships 15,392 17% 1,678 17,070 3% 13,183 3,450 16,633 BBC programmes and 13,705 7% 1,920 15,625 10% 12,813 1,357 14,170 events Total income 46,624 26%* 14,413 61,037 7% 37,101 19,780 56,881 *12% like-for-like basis (excluding £5m schools income)
8 581,000 lives changed lives 581,000 raisingEvents & fundsProgrammes BBC
Direct Public Support
6% Legacies Schools 1% Public Fundraising 21% Donations Trading Contribution
49%
23%
Corporate Partnerships Corporate Direct Public Support Public Direct Schools Fundraising Partner During the year we were supported by Lloyds Banking Group, our unique Schools Fundraising Partner. Last year schools helped to raise money for the charity based on the brand new spotty themed fundraising initiative, the Big Spotacular. Children from across the country used spots to raise lots, from spotty non-uniform days to spotty cake sales and sponsored challenges! In addition, over 400 Lloyds colleagues supported local schools with their activities. In total 16,100 schools and millions of children took part raising an impressive total £5.9m.
Children at Clowne Infant and Nursery in Chesterfield went all out last Appeal for the Big Spotacular! All the children decided to hold a spotty dress up day and each child painted their very own spot which was used to decorate the school hall. The children also opened a Pudsey shop, where they sold lots of Pudsey merchandise, as well as spotty bakes and cakes. In total they raised over £900 for BBC Children in Need – an incredible total from the little ones! 9 Our fundraisers Alice and James, Durham, made jams and jellies to sell to neighbours and friends
6-5 Specials, Warwickshire, Brease, Warwickshire, recorded and sold a performed 1950s skiffle music Christmas CD
1st Ballygally Scout Group (Squirrels), County Antrim, held a £1 bring and buy toy sale
PT Fitness, Flintshire, created a spoof fitness music video
Kate and Pat, Yorkshire, dressed up as Postman Pat and Jess the cat
Kibworth Karate, Leicestershire, held a two hour non-stop kata performance
Moira and Hazel, Aberdeenshire, did a 3 mile horseback Countryfile The Hideout, Kent, cycled 100 miles Ramble up to Delgatie Castle in one day on exercise bikes in their office
Louis, Staffordshire, sold cards and calendars at a local garden centre Streamers for Children in Need, Middlesex, held a 24 hour gaming stream Hit the Surf, Cornwall, held a sponsored surf to catch as many waves as possible in half an hour Ansel and Ebon, East Lothian, completed
a one mile unicycle to school
Virtual College, Yorkshire, did a fancy dress conga from their office in Ilkley all the way to their second office 15 minutes away
Laura and friends, Hertfordshire, Will, Yorkshire, performed a 16 hour created and raffled a blanket as part solo busk at Leeds train station of a sponsored blankathon
10
581,000 lives changed lives 581,000 Events & Programmes BBC
Corporate Partnerships
34%
Lloyds Post Office Asda 5% Boots
37% Greggs 11% Other
8%
5%
Corporate Partnerships Corporate Lloyds Banking Group - Charity of the Year Support Public Direct During their second year as the Charity’s first ever Principal Partner, Lloyds Banking Group’s customers and colleagues raised £7.2m in the calendar year 2016 becoming our biggest ever annual corporate supporter. Of this £5.7m has been accounted for in this financial year.
Colleague fundraising activities included ‘Tour de Pudsey’ where 60 colleagues in three groups of 20 cycled 300+ miles from London, Edinburgh and Cardiff to Pudsey and raised in excess of £0.3m.
Thousands of colleagues across head office and branches went ‘spotty’ by wearing spots, selling spots and completing sponsored spotty challenges, during The Big Spotacular Appeal Week.
Customers also went ‘Spotacular’ across Lloyds Bank and Bank of Scotland by purchasing exclusive Pudsey Moneyboxes in branch and generously donating. 11
ASDA George at ASDA dressed the nation superhero style raising £1.9m POST OFFICE through the sale of their now iconic Pudsey onesies, as well as a host Post Office became our high street of other Pudsey inspired products. Fundraising Hub where you could Their customers and colleagues got pick up your fundraising pack and into the hero spirit holding dress nominate your Fundraiser of the up days in stores up and down the Year. Alongside a star-studded country. Amazing. charity ball in November, hundreds of branches up and down the country held fundraising events such as raffles and fancy dress days and their customers supported raising £1.0m.
GREGGS Greggs celebrated a decade of partnering with BBC Children BOOTS in Need and fundraised as enthusiastically as ever through Boots did a fantastic job raising selling their Pudsey & Blush ring £1.5m with an energetic and buns and biscuits, selling our exciting fundraising campaign. As merchandise and through their well as being able to buy Pudsey brilliant staff fundraising. Their merchandise, colleagues and franchise shops were fully integrated customers were called on to ‘Jump into the campaign for the first time, for Pudsey’ in Boots stores across helping Greggs to raise an overall the UK, with thousands of families total of £0.8m. getting active to raise money for an extraordinary cause. Direct Public Support Corporate Partnerships
12
BBC Programmes & Events
Radio 2 Radio 2 was our top fundraising broadcasting partner once again, committing huge amounts of airtime to BBC Children in Need. Chris Evans led the charge with CarFest kicking off activity at the end of July, and he followed this up with his hugely successful auctions during Appeal week. Ken Bruce took his Popmaster – LIVE for Children in Need up to Glasgow, and we all laughed as we raised money at a gala performance of “The Comedy About a Bank Robbery” in the West End. Radio 2’s combined efforts raised a magnificent £5.9m.
The One Show Rickshaw Challenge Back for its 6th year, the Rickshaw Challenge saw Matt Baker and six youngsters from BBC Children in Need funded projects cycle from the Scottish market town of Jedburgh, to the One Show studio in Central London. Cycling over 470 miles, and overcoming their own individual challenges on the journey, along with Matt Baker, the young people BBC Programmes & Events 581,000 lives changed inspired and motivated the UK to raise a phenomenal £4.2m. To date the Rickshaw has raised over £16m - truly incredible.
Countryfile In addition to the eye-catching 2%2% Countryfile calendar, 2016 saw the second ‘Countryfile Ramble’ where the programme’s presenters embarked upon a range of tough rambles led by inspirational families who have been supported by our projects. The Countryfile audience were also encouraged to stage their own ramble 24% over a weekend in October. In total Radio 2 Countryfile raised a staggering £3.7m. The One Show Rickshaw Challenge 38% Children in Need Rocks for Terry One Big Night In an emotional evening at the Royal Albert Hall, Sir Terry’s family joined Countryfile us in a special star studded evening BBC DIY SOS to celebrate his life and to hear some of his favourite music, performed by BBC Nations & Regions everybody from Olly Murs to Take That. 7% The show was subsequently broadcast on BBC One and raised £1m.
BBC Nations & Regions BBC stations across the Nations and Regions undertook a range of activity in support of the Charity that got their 27% listeners fundraising and donating. From Graham Liver’s Bed Push on Radio Lancashire through to Hugo Duncan’s legendary auction on Radio Ulster. Everybody was doing their bit, as Children in Need connected with communities right across the UK. 13 CONTENT
In 2016-17, we worked closely with BBC colleagues to develop special programming focussing on particular challenges faced by some of the young people supported by BBC Children in Need-funded projects. This enabled us to raise awareness of specific issues affecting children and young people in the UK and to explore them in greater depth. Examples include:
Prison, my Parents and me A ground breaking and powerful documentary for BBC One looking at children and young people who have to cope when a parent is in prison. The documentary shone a light on the support funded by BBC Children in Need, which enables children to cope with these really challenging situations. Post programme research showed that 75% of those who had not understood the issues before now had a good grasp and were very supportive of the charity’s work.
Radio 4 – Drama We continued our yearly drama following the story of Sky and Dexter who are the centre of a storyline focussing on neglect. This was featured every day during Appeal week in the drama slot that follows Woman’s Hour. The programme then focussed in on a discussion around some of the issues raised.
Online For the first time BBC Children in Need’s online channels told the story of the charity on a year round basis, highlighting a range of areas of disadvantage and the work that BBC Children in Need does to impact young lives.
This storytelling built through to the November appeal where online channels were used to inspire the public and reflect their fundraising efforts. This culminated in November with highlights including over 40 million people reached via Twitter and Facebook in Appeal week and the charity as the number 1 organic trend on Twitter throughout Appeal day. 14 finding and funding the inspiring ideas that change the lives of children
All income from donations is allocated to the Grant Fund and goes towards our work supporting disadvantaged children and young people across the UK. The Funding Continuum and the horrific bombing of a design and monitoring of projects. The purpose of our funding is to concert in Manchester brought into Increasingly we are developing deliver positive impact to children sharp focus the direct physical and our relationships with our portfolio and young people in order to emotional impact on children and of grantees, through convening keep them safe, happy and secure young people. In addition, many events around areas of common and give them the chance to were indirectly affected, through interest, to individual project visits reach their potential. We do this fear of similar events and by living in to highlight excellence or to learn through a continuum of funding the neighbourhood. BBC Children about an issue or geographic models ranging from crisis in Need is not an aid agency but area, or to monitor progress and support to individual families, to where there is such apparent and offer additional support. The grants awarded to organisations tangible impact on children and capacity to re-invest in projects in response to proposals to work young people we felt it imperative through continuation funding is with groups of children and young to respond. a highly valued characteristic of people who are disadvantaged. BBC Children in Need that allows As part of a consortium of funders, At another level, we are also mutually beneficial relationships to we were able to connect to our committed to investing proactively grow over time. network of local youth projects in through grants that target a the Grenfell area, to offer immediate particular issue that affects children Proactive work support to those organisations that and young people. In this way With the support of our Trustees, were trusted locally to help, and we anticipate delivering wider we have this year sought to to whom many children turned. impact beyond the individual and identify issues where we can work In Manchester we also brought the organisation, to effect change collaboratively with others to find together the projects we currently on a bigger scale. Hence we offer and fund work that not only delivers fund to identify both short and support across a spectrum of grant direct support to children and longer term needs of young programmes, each informing and young people but also offers the people in the city. The value of the relating to the other and each opportunity to scale and sustain networks of support that we fund delivering positive outcomes in that work through policy change across the UK has been highlighted different ways to disadvantaged and establishing good practice. through these incidents and the children and young people across For example, we are funding in ability to respond in an agile and the UK. partnership with the Premier League grounded manner is an asset we to tackle youth violence; we are Emergency grants could apply to other situations. jointly funding with the Wellcome Our responsive funding supports Trust a programme to encourage Responsive programmes work with groups of children and interest and engagement in informal BBC Children in Need is in the young people in local and national science learning; in Scotland we main a responsive funder – some organisations. However we also are developing with The Hunter 96% of our grants totalling £60.3m recognise that individual families Foundation, place based support (total of small and main) go to are often managing crises at home to young people and families support organisations who apply that can severely affect children’s on the edge of care or statutory to us for funding. These are life chances. In collaboration intervention; in London we are part projects designed to work directly with Buttle UK, BBC Children in of a consortium of funders tackling with children and young people Need invested £2.25 million across Holiday Hunger and also of the who are dealing with particular the UK in a programme called Child Sexual Exploitation Funders’ disadvantages, or indeed multiple Emergency Essentials and Buttle Alliance. issues. These can range from awarded £2.4m within the year. abuse, neglect, poverty to illness, This comprises small grants of We continue to explore ideas and bereavement, mental health on average £200, made available potential partnerships that offer problems, disability – and our relatively quickly at a local level scope to advance our learning and grants range from a few thousand that can arrest the negative impact influencing role, both internally on pounds to over a hundred thousand of a domestic disaster. This could, our own practice and externally pounds. for example, be providing a new in the children’s sector and at washing machine –enabling Our funding allows projects policy level. In this respect we are children to have clean uniforms to create and sustain positive developing a wider impact strategy or clothes to attend school; or a outcomes for these children and that engages all aspects of the cooker or fridge to allow healthy young people in response to an charity, including our corporate and affordable meals; or new identified need. In addition we partners, our colleagues in the bedding so children can get a good provide training and support to BBC and our portfolio of grantees night’s sleep. the organisations to monitor and and the half a million children they report on their progress. We actively support. This year we committed At the end of the year, the encourage the involvement of £0.3m to the proactive element of disastrous fire at Grenfell Tower children and young people in the our funding spectrum. 15
Direct Public Support Grant-making policy Corporate Partnerships
1 BBC Children in Need funds 2 Every project and organisation projects in order to produce we fund shall demonstrate positive outcomes for children comprehensive understanding and young people who are and application of best practice in experiencing disadvantage; safeguarding children;
3 We fund projects that are child 4 The organisations we fund will focussed; be not-for-profit organisations with appropriate, accountable £ and proportionate governance;
5 The projects we fund should 6 Every project and organisation not duplicate or substitute for we fund should encourage and statutory responsibilities; enable participation by children and young people in an X appropriate and empowering manner.
We award grants to voluntary projects, community groups and registered charities that are working with children and young people, 18 and under, who are affected by a number of issues including homelessness, neglect, abuse, disability, poverty, serious illness and bereavement. We award two types of responsive grants. A Small Grants Programme includes grants up to £10,000 per year which supports projects for a maximum of three years, while the Main Grants Programme is for grants over £10,000 per year to support projects for up to three years.
Being a responsible grant-maker, we do not hand over the money awarded to a project at the start of a grant; we pay the money over the life of the grant and critically when we have evidence of the positive impact it is having on BBC Programmes & Events children and581,000 young people. lives changed
23k Our investment in children 22k 89k In 2016/17 BBC Children in Need helped change the lives of 582,000 disadvantaged children and young people living in 69k the UK.
Central England 582,000 London & South East England North England 100k 65k lives changed South & West England Northern Ireland Scotland Wales 85k Emergency 129k 16
Number of children and young people helped by region
Scotland UK: 559,000 69,000 Emergency: 23,000
Total children & young people reached: 582,000
Northern Ireland 65,000 North England 129,000
Wales Central England 22,000 89,000
London & SE England South & West England 100,000 85,000
Grants awarded in the year In 2016/17 we awarded £62.8m (2016: £51.4m) in grants of which £60.3m related to responsive funding of 1,451 projects. This is an increase of 22% which reflects our efforts to accelerate funding. £15.1m £13.4m 341 293 £12.0m 266 £1.6m £6.2m £6.1m £13.5m £1.5m 179 £1.3m 172 172 £11.9m 162 161 £10.7m £3.6m £1.0m 141 £1.0m 132 £3.9m 125 120 £0.7m 112 107 £5.2m 87
£5.1m Main Grants 85 £0.4m 65 £3.5m £2.9m
60 Small Grants 50 37 35 Total
Central London & North South & Northern Scotland Wales SE West Ireland
£2.4m 11,262
£1.8m 8,723
£234k £170k £158k 824 1,024 691 England Northern Scotland Wales UK Ireland £15.1m £13.4m 341 293 £12.0m 266 £1.6m £6.2m £6.1m £13.5m £1.5m 179 £1.3m 172 172 £11.9m 162 161 £10.7m £3.6m £1.0m 141 £1.0m 132 £3.9m 125 120 £0.7m 112 107 £5.2m 87 £5.1m 85 £0.4m 65 £3.5m £2.9m 60 50
37 17 35
InCentral addition, 11,262London individual & North grants to a South value & of £2.4mNorthern were awardedScotland to children Wales and young people through the Emergency EssentialsSE programme duringWest the year. Ireland
£2.4m 11,262
£1.8m 8,723
£234k £170k £158k 824 1,024 691 England Northern Scotland Wales UK Ireland
The balance of £0.3m was awarded to proactive programmes
PORTFOLIO OF ACTIVE GRANTS The total number of active grants we are currently managing including Responsive, Emergency Essentials and Pro- active grants is 2,562 and equates to a total value of £154m.
Table 1: Portfolio - Distribution of all active grants across the UK (June 2017)
% of total % of total Area Number number Value value Central 481 19% £29,725,799 19%
London & South East 585 23% £36,213,375 24%
North 553 22% £33,823,191 22%
South West 271 10% £14,505,530 9%
England 1,890 74% £114,267,895 74%
Northern Ireland 208 8% £9,953,474 7%
Scotland 300 12% £17,602,197 11%
Wales 157 6% £9,603,481 6%
UK Total 2,555 100% £151,427,047 98%
Emergency Essentials 1 0% £2,250,000 2%
New Beginnings Funds 1 0% £150,000 0%
Development Awards 5 0% £8,760 0%
Portfolio Total 2,562 100% £153,835,807 100% 18
Table 2: Portfolio - Distribution of all active grants by disadvantage (June 2017)
% of total % of total Disadvantage Number number Value value Abuse/neglect 158 6% £12,104,724 8%
Behavioural difficulties 77 3% £4,699,430 3%
Disability 543 21% £29,720,506 19%
Distress 246 10% £18,774,833 12%
Illness 219 8% £13,708,129 9%
Marginalised groups 356 14% £22,995,712 15%
Poverty and deprivation 963 38% £51,832,473 34%
Total 2,562 100% £153,835,807 100%
Table 3: Portfolio - Distribution of all active grants by project (June 2017)
% of total % of total Project type Number number Value value Advocacy 38 1% £3,507,634 2%
Arts/creativity 318 12% £14,296,188 9%
Befriending/mentoring 116 5% £8,097,825 5%
Capital 22 1% £258,079 0%
Counselling 235 9% £18,738,916 12%
Cultural projects 4 0% £185,078 0%
Early years services 119 5% £6,311,631 4%
Family support 171 7% £11,029,170 7%
Holidays 92 4% £2,662,091 2%
Inclusion projects 17 1% £1,220,285 1%
Information and advice 29 1% £2,391,627 2%
Medical 60 2% £4,165,469 3%
Playscheme 113 4% £4,405,895 3%
Refuge 51 2% £4,313,111 3%
School and extended services 197 8% £9,984,223 6%
Sports and health 216 8% £9,874,271 6%
Training and employment opportunities 120 5% £7,056,277 5%
Welfare fund 1 0% £2,250,000 1%
Youth services 643 25% £43,088,037 29%
Total 2,562 100% £153,835,807 100% 19
The following stories show how children and young people have been helped by some of the projects, community groups and charities that we support.
Winchester Young Carers Saskia, 16, has been caring for her mum since the age of 11. She helps to cook the dinner, do the laundry and clean, as well as accompanying her mum to hospital appointments and providing emotional support. All of this responsibility gives Saskia little time to herself. Thankfully, Winchester Young Carers run weekly nights where young carers can get together and have fun, and this has helped Saskia grow in confidence, build friendships and share her experiences with others in similar positions.
The Brittle Bone Society Max, 5, has Osteogenesis Imperfecta otherwise known as Brittle Bone Disease – a condition which affects the body’s production of collagen. Max is a very determined little boy who wants to be like any other child but his condition means that just playing with friends can result in a fracture. So far Max has broken fourteen bones, including three ribs and both legs. He also gets very tired and wakes up in the night with bone pain.
Relief for Max comes in the form of the Brittle Bone Society, a project funded by BBC Children in Need. At clinics, Max receives medical support as well as meeting other children with the same condition. Max’s Mum and Dad say that these visits really help him to understand and live with his condition. Thanks to donations from members of the public, the Brittle Bone Society can continue to support Max as he grows.
Cardiff City FC, Cardiff, Wales Lucy was diagnosed with Mitochondrial Disease when she was 5 years old. This rare condition affects how the muscles in her body work, including her movement and her speech. Lucy loves sport but because of her condition she is unable to join in with sport activities at school. But at Cardiff FC Foundation she has a chance to play wheelchair football each week. Not only does this mean she is included and can make new friends but she’s doing an activity she loves.
Maggie’s When ten-year-old Logan’s mum, Olivia, was diagnosed with cancer at just 38 years old, Logan, understandably had lots of questions and concerns.
During treatment, Olivia and Logan went to Maggie’s in Inverness, a group of therapeutic centres offering support and advice to people with cancer and their families. Whilst there, Logan took part in a family day, funded by BBC Children in Need, where he was able to find out more about his mum’s illness and talk to psychologists about his worries.
Logan continued to have one-to-one sessions at Maggie’s before and after his mum passed away and is now coping well. Thanks to our supporters, we can help more children like Logan who are living with a cancer diagnosis in the family. 20 insight
In early 2017 a new executive role and started working with young their focus and effectiveness. was agreed by the BBC Children people at risk. This learning helped However, in the UK there is no in Need Board that will put the us better understand what it takes single validated or comprehensive data and insight at the heart of our to implement projects through picture about the location, nature, decision-making and performance football clubs to address this very prevalence and interconnections management. Recruitment for the complex issue. It has also meant we of children’s needs upon which the Director of Insight started in are more confident that together decisions on how to better support June 2017 and was filled by the with Premier League we can create children can be made. BBC Children autumn. The new Director will positive change for young people in Need has, therefore, begun to develop the necessary systems and on the fringes of perpetrating lead thinking and conversations strategy that will ensure data from violence. As a result, we are with other children’s charities across grant-making, fundraising entering into a second phase and about the possibility of creating a and audiences can be joined up rolling the programme out to more resource that will regularly map and analysed in new ways that will Premier League clubs. national, regional and local level improve our insight into how we data on an array of disadvantages can better engage our supporters BBC Children In Need recognises and their effects on children’s lives and meet children’s needs across that meeting the needs of our (their needs). The aim is that this the UK. nations’ disadvantaged children information will be shared through and young people has become a regularly maintained online portal, A new form of deeper insight came increasingly difficult due to and that the insight it will provide from our joint proactive programme decreasing budgets, diminishing will help funders, commissioners, with the Premier League that is infrastructures and the continued policy-makers and practitioners aiming to reduce youth violence high prevalence and complexity of make individual and collaborative in communities. A developmental many types of disadvantage. Key to decisions about how to most evaluation was conducted by better meeting children’s needs in effectively prevent or counter the the Institute of Voluntary Action these challenging times is having challenges facing children in the UK Research (IVAR) of a one-year pilot access to revealing data and insight today. phase of this initiative. It provided that helps funders, commissioners, iterative learning as four pilot policy-makers and practitioners projects established themselves see things differently and sharpen 21 strong charity
Our strong charity objective relates to the essential foundation and building blocks that enable us to focus all of our efforts on delivering great outcomes for children and young people across the UK. Alongside our strategy refresh, we also reviewed our approach to Business Planning during the year, to ensure alignment throughout all teams with an annual Organisation-wide Plan, and a cascade of Team Business Plans and Individual Plans. We have also considered how we want to approach our day-to-day work and have updated our charity-wide behaviours, representing the ways in which we will all aspire to behave. These are shown in the diagram below:
We put children first We collaborate We keep focus on our mission to We work together, across disciplines, change children’s lives. We ensure their taking the best from each area to make voice shines through the projects we the most of each opportunity. We make the most of combining our support and we are diligent in our skills,we empower each care as we work with them to other and we celebrate achieve real and lasting change. our successes.
We CHALLENGE OURSELVES we think differently We think differently and we We challenge ourselves in a positive embrace the change this brings. way - to take the lead, to drive our area We are ever curious and look to of the charity forward, to be best at what the outside world to learn, to we do. We never rest on our laurels understand changing needs, to and strive to continuously find new opportunities and to improve and harness ideas. seek partnerships.
We seize the moment We set the standard Our drive helps us seize the moment We set the standard for the expertise, and take calculated leaps to make rigour, inclusivity and quality the most of opportunities that present themselves. We look for in the way we operate. We ways to make things happen rather do this to the strictest of than accept the status quo as if we moral standards and with don’t seize opportunities, someone unwavering respect for the else will. children we exist to help.
All individuals have been asked to consider how to reflect these ways of working in their daily activities. This coordinated approach to business planning allows us to have a more consistent way to report on progress. We have also developed our approach to reporting in the year and now issue a Performance Report on a quarterly basis, covering key performance and people metrics for the charity. We have enhanced aspects of our grant-making process during the year and notably have reviewed our small grant programme. We successfully piloted a streamlined approach to awarding grants up to £10,000 per year for a maximum of three years in Scotland and South East England and then rolled this new approach out to the whole of the UK in early 2017. Positive feedback has been received from all stakeholders and we continue to monitor this and are planning for further process improvement in the current year. We have also reviewed our core grant- making systems and will be investing in and evolving these during early 2018. The charity has reviewed and updated its internal funding model in the year. The revised model enables us to invest in the charity’s future and provides long term financial stability, enabling us to create even more positive impact on the lives of disadvantaged children and young people. How we structure our reserves and how fund usage has changed is explained in the notes to the accounts on page 38. 22
Financial Review
The accounts for the year ended 30 June 2017 covers:
• income from the BBC Children in Need Appeal 2016, televised in November 2016; • follow-on income received in the period to 30 June 2017; and • grants awarded to projects in the period 1 July 2016 to 30 June 2017. Financial Performance
We measure financial performance based on: • maximising income; • managing costs in line with available funds and at an appropriate level relative to income; • maximising the amount of grants awarded; • managing funds in line with the Charity’s policy.
Income allocated to the grant fund for the year totalled £61.0m (excluding gift in kind* of £0.3m, including net income transferred from Children in Need Limited of £2.6m). This compares to £56.9m in the prior year representing 7% growth.
Grants awarded increased significantly during the year by 22%. £62.8m (2016: £51.4m) was awarded in grants during the year and after returns and grantee training costs netted to £61.3m (2016: £50.0m).
Other income of £5.5m (excluding gift in kind* of £0.8m) (2016: £5.1m) was earned from investments and Gift Aid. All licensed income and the contribution from trading (£2.6m) was transferred to the Grant fund.
To administer the Charity properly, fundraise creatively, manage the funds raised professionally and operate as an effective grant maker we incur direct costs. Total direct costs incurred in the year were £9.0m (£10.1m including gift in kind* of £1.1m) (13.5% of our total income (2016: 13.7%)).
*Gifts in kind includes provision of office space and Corporate Partner fundraising support. These have been excluded from the above analysis because income is offset by an equal amount of cost and nets to zero. Further details are given in note 3 to the financial statements.
Results for Children in Need Limited Children in Need Limited is a wholly owned subsidiary and holds the Charity’s trading activities. The results of the company are consolidated into the Charity’s financial statements. During the year ended 30 June 2017, Children in Need Limited made a profit of £2.3m (2016: £1.8m). This was paid in full to the Charity under Gift Aid provisions.
Investments Cash not required for expenditure in the short term is invested. Investment income for the year (including revaluation gains) was £1.4m (2016: £0.9m), representing a return of 1.2% (2016: 0.8%) on the average investment balance. The investment policy was updated in 2016 and has a long term target of between 1.5% - 2.5%, the actual return reflects that we are still in mid implementation. The investment policy stipulates the type and terms of investments that may be purchased and investment objectives of:
• retain sufficient liquidity for day-to-day needs; • maintain a measured appetite to risk; and • maximise investment returns within the constraints of the above.
The Charity retains a conservative approach to investing and holds funds not needed for short term use in two types of investments: a) Core fixed income liquid assets – to provide a return of capital growth and income primarily through investment in a portfolio of short term cash and money market instruments, investment grade bonds and other fixed and floating rate securities. This portfolio is managed on the Charity’s behalf by Schroder Investment Management (UK) Limited. b) Appropriate income/return generating assets - income generating assets such as property funds and high quality securitised credit (low risk loans).
The balance held within each type of investment is determined by the amount of liquid funds required to meet our grant commitments when they fall due. We do not hold shares directly or through fund managers and social, environmental and ethical considerations are taken into account when making investment decisions. 23
Funds At 30 June 2017 the Group had total closing funds of £45.1m representing a reduction of £3.2m on the prior year position.
Opening Incr. in Funds Costs Closing Designated funds £’000 1 Jul 16 funds utilised Incurred 30 Jun 17 Opening 1 Jul 16 43,143 14 - (3,433) 39,724
Responsive grants - 58,502 (58,502) - -
Emergency grants - 2,250 (2,250) - -
Proactive grants - 271 (271) - -
Total grant funds 43,143 61,037 (61,023) (3,433) 39,724
Short term funding deficit - - - - -
Continuity fund 175 6,089 - (5,861) 403
Investment continuity fund 4,000 - - - 4,000
Development fund 1,000 - - - 1,000
Non grant fund 5,175 6,089 - (5,861) 5,403
Total funds 48,318 67,126 (61,023) (9,294) 45,127
Designated Grant Fund - £39.7m At 30 June 2017 the Charity held designated grant funds of £39.7m, representing donation income received and to be awarded to projects in future grant-making activity.
Designated Non Grant Fund - £5.4m The fund reflects Non Grant income earned such as investment income and Gift Aid. Principal Risks and Uncertainties
A key risk for the charity is the inherent uncertainty of future income related to changing viewing habits and patterns of public fundraising. In recent years the focus has been on achieving more diversity in our income sources and the success of this approach is reflected in the changing balance of income across public donations, corporate and BBC supporters. However, reliance on a small number of core funding streams continues to be a risk that we will aim to mitigate by bringing in a wider range of supporters.
There are risks attached to the levels of unrestricted funds as it is driven primarily by factors outside of the Charity’s control such as Gift aid conversion and investment income. The Investment Continuity Fund was set up to manage the risk of an unexpected drop in the value of or income from our investments. Similarly the Continuity Fund was set up to manage the risk of an unexpected drop in Gift Aid or other sources of income. 24
The Reserves Policy for the Charity sets out a long-term target for the Unrestricted Non Grant Fund of £6m, including an increase in the Continuity Fund as shown in the table below. The investment continuity fund requirement was reviewed in the year has been revised down to £4m (2016: £5m).
Closing Long-term Current Non-grant fund £’000 30 Jun 17 target gap Continuity fund 403 1,000 (597)
Investment continuity fund 4,000 4,000 -
Development fund 1,000 1,000 -
Total 5,403 6,000 (597)
Adequacy of Assets to Fulfil Obligations Investments are held to meet liabilities as they fall due and the Trustees confirm that as at 30 June 2017 the Charity’s assets are available and adequate to fulfil obligations.
The Trustees have taken into account all available information about the future for at least but not limited to 12 months from the date the accounts are approved. There are no material uncertainties about the Charity’s ability to continue.
Future Plans
The relocation to Media City UK in Salford has now been successfully completed. Following on from development of the BBC Children in Need Strategy and Plans, activity is underway to enable the whole team to focus on taking the Charity forward, and achieving our strategic ambitions.
Our Appeal night and appeal campaign culminating in November 2017 was our best ever, with an “On the Night” total of £50m, an increase of 7%. Whilst our grant making enables us to make a lasting impact on the lives of thousands of disadvantaged children and young people, our activities in 2017 will take this further but also mark an opportunity for the broadening and development of our strategy as we focus every aspect of the organisation on delivering impact for disadvantaged children and young people.
This is an exciting development for BBC Children in Need which essentially extends our ability to drive impact beyond grant making and enables us to develop impact through insight, careful analysis, learning and evaluation. Equally, our excellent relationship with the BBC will be enhanced further as we explore deeper interactions across all content platforms that support both income driven impact and programme driven impact. Our relationship with our supporters also creates an opportunity to broaden the scope of our impact and we will be exploring opportunities to take this further in the future.
To achieve further progress with our strategy and plan over the next three years, our focus for the future will be on our overriding ambition and our five organisational objectives.
As reported, we will focus on finding and funding the inspiring ideas that change the lives of children and young people. We recognise that finding and funding the inspiring projects and services is critical. Our future plans reflect this. We will continue to match our commitment to efficiency with making sure the generous public donations reach projects and support children and young people quickly. Our future plans will enable us to maintain, develop and constantly review the rigour with which every decision to fund a project is made. We will continue to ensure the standards we set for allocating grants and funding are the highest possible.
We have reported considerable success with celebrating and championing the positive impact children and young people have on society. During the year we will continue to not only articulate the challenges children and young people face but also continue to celebrate and champion the enormous contribution children and young people can have on their peers and in their communities.
The Trustees have reflected on the changing balance of income for the charity, both in terms of keeping pace with changes in television viewing habits which have tended to switch from live to on-demand, but also in the significant success of the charity’s initiatives supported by Lloyds Banking Group, ASDA and BBC Countryfile. Diversification of income will continue to be a key theme into the future and recent learning has given the Trustees confidence of future success. 25
We have now undertaken a refresh of our strategy and our approach to business planning, which will set the course for the Charity for the next three to five years. Core to this strategy is increasing the positive impact we have on the lives of children and young people, and exploring new channels and innovative ways in which we can increase this impact.
Clearly there are key risks that the Trustees, Executive and Leadership team will continue to face. Our organisational risk assessment reporting, review and management process will enable us to remove or mitigate these risks. These include.
• Potential loss of core funding streams, to be addressed by continued diversification of supporters and sources of income; and • Exposure to factors outside of the charity’s control e.g. investment returns, addressed by a risk-focused reserves policy.
We will continue to report, monitor and manage these through our risk register, regular reporting and review at Executive and Leadership meetings, through the Audit and Risk Committee and the Board of Trustees. 26
Structure, Governance and Management
Formal Structure BBC Children in Need was formed on 25 August 1988, became a registered charity with effect from 1 September 1989 and until 30 September 2003 was an unincorporated body governed by a deed of trust and administered by a board of Trustees.
With effect from the 1 October 2003 the Charity’s assets and activities were transferred to a Company Limited by Guarantee (‘The BBC Children in Need Appeal’) with the existing Trustees being appointed as the Board of Directors and the BBC as the Founder Member of the Company. As part of the process of incorporation, The BBC Children in Need Appeal was effectively re-registered as a Charity on 7 August 2003 but retained the Charity number 802052. The Charity is governed in accordance with its Articles of Association.
In 2012 the name of the Charity was changed from The BBC Children in Need Appeal to BBC Children in Need, to reflect our year round presence and the changing nature of our fundraising. BBC Children in Need is also a registered Charity in Scotland, number SC039557.
BBC Children in Need has one trading subsidiary, Children in Need Limited. Children in Need Limited is a wholly owned subsidiary which primarily exists to license products using the ‘Pudsey Bear’ trade mark and to sell Pudsey merchandise. Children in Need Limited makes a Gift Aid payment of all its taxable profits to BBC Children in Need each year.
Governance Arrangements As a registered charity and company limited by guarantee BBC Children in Need is governed by company and charity law and by The Statement of Recommended Practice, The Charities SORP (FRS 102), issued by the Charity Commission in January 2015. The SORP sets out the accounting practices and disclosure required by charities in their annual accounts. The Trustees have followed its recommendations and applicable accounting standards in presenting these financial statements.
Trustee Appointment and Chair The Trustees are appointed by the Members of the Charity in general meeting and all Trustees are Members of the Company except for the Trustee who formally represents the BBC (as Founder Member). Trustees are appointed for a term of three years. At the end of this term they may be reappointed for a further term of three years. After two consecutive terms, Trustees may then be appointed for additional terms of one year however their total term of office must not exceed nine consecutive years. In addition to the Trustee representing the Founder Member, the Trustees of BBC Children in Need are drawn from the BBC and non-BBC in equivalent numbers.
On appointment all Trustees go through an induction process and are provided with training specific to the tasks that they will be required to undertake (e.g. grant making). In addition Trustees are kept up to date with any changes in governance requirements to ensure they are informed of best practice.
Management The Board of Trustees holds formal meetings up to six times a year (with a minimum of four meetings a year). In between these meetings, matters are progressed through the delegation of actions to Trustees and Officers of the Charity.
Key decisions that Trustees take include principal officer appointments and final decisions on all main grant awards. The Trustees delegate daily management of the Charity to the Chief Executive and the Senior Leaders. Trustees meet regularly for feedback on the Charity’s performance, to approve the awarding of grants and to make recommendations for the direction and expectations of the Charity in the future.
Key Responsibilities of Trustees The following points outline the key responsibilities of Trustees. • agree the strategic direction and policy of the Charity; • agree the annual operating and investment budgets; • adopt responsibility for specific initiatives within the Charity; • execute all legal responsibilities in connection with the Charity; • observe the content of the Charity’s Articles of Association in order to comply with the Charity Commission regulations; • support the Chair in ensuring that the Charity is following best practice in terms of its business rigour; • provide expertise and insight into key areas of activity for the Charity; and • represent the Charity when required.
28
Reference and Administrative Details
Trustees and Advisors
Chair Stevie Spring
Vice Chair Robert Shennan
Other Trustees Matthew Baker Joanna Berry2 Anne Bulford1,3,5 Phil Hodkinson1,3,5 Donalda McKinnon4 Luke Mayhew3 Peter McBride2,4 Charlotte Moore Gillian Sheldon1,5 Alice Webb
1Members of Audit Committee 2Members of Grants and Policy Committee 3Members of Fundraising and Commercial Committee 4Members of Nominations, Remuneration and Development Committee 5Members of Investment Committee
Principal Officers Simon Antrobus Chief Executive Karen Bass Chief Operating Officer Gareth Hydes Director of Content (left 15 January 2018) Joanne Ruddock Director of Insight (joined 6 November 2017) Jonathan Rigby Commercial Director (left 30 September 2017) Paddy Sloan Interim Director of Grant-Making and Policy
Auditors Bankers Ernst & Young LLP HSBC Bank Plc 1 More London Place Fenchurch Street Branch London 60 Fenchurch Street SE1 2AF London EC3M 4BA Investment Managers Schroder Investment Management Limited Solicitors 31 Gresham Street Bates Wells Braithwaite LLP London Thames Exchange 10 Queen Street EC2V 7QA London EC4R 1BE Registered Office Bridge House Fieldfisher LLP Salford 35 Vine Street M50 2BH London EC3N 2AA
Mills & Reeve LLP Fountain House, 130 Fenchurch Street London EC3M 5DJ 29
Statement of responsibilities of the trustees of BBC Children in Need in respect of the trustees’ annual report and the financial statements
The Trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires Trustees to prepare financial statements for each financial year. Under that law they are required to prepare the group and parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and charitable company and of the group’s excess of expenditure over income for that period. In preparing each of the group and charitable company financial statements, the Trustees are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the charitable company will continue its activities.
The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.
The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 30
Independent auditors’ report to the trustees and members of BBC Children in Need
Opinion We have audited the financial statements of BBC Children in Need for the year ended 30 June 2017 which comprise Consolidated Statement of Financial Activities, Charity Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement and the related notes 1 to 17, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 “The Financial Reporting standard applicable in the UK and Republic of Ireland”. In our opinion the financial statements:
• give a true and fair view of the state of the consolidated and charitable company’s affairs as at 30 June 2017 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; • have been prepared in accordance with the requirements of the Companies Act 2006,the Charities and Trustee Investment (Scotland) act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report below. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
• the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or • the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit:
• the information given in the trustees’ report, which includes the directors’ report and the strategic report prepared for the purpose of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and • The strategic report and the directors’ report included within the trustees’ report have been prepared in accordance with applicable legal requirements
32
Consolidated statement of financial activities for the year ended 30 June 2017
(Incorporating Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Year to 30 June 2017 Unrestricted Funds 2016 Designated Designated Non-grant Total Total grant funds funds funds funds Notes £’000 £’000 £’000 £’000
INCOME AND ENDOWMENTS FROM: Donations and legacies Donations 2 56,832 - 56,832 53,316 Gift Aid on donations - 4,020 4,020 3,331 Legacies 2 1,576 - 1,576 1,691 Charitable activities Product income 9 - 3,173 3,173 2,564 Investments 11 - 918 918 991 Other 2 - 110 110 787 Gifts in kind 3 291 798 1,089 2,149 TOTAL INCOME & ENDOWMENTS 58,699 9,019 67,718 64,829
EXPENDITURE ON: Raising funds Cost of generating voluntary income 7 - 5,444 5,444 5,577 Investment management fees 7 - 175 175 162 Trading operating costs 9 - 829 829 748 Exceptional gift in kind 3 - - - 864 - 6,448 6,448 7,351
Charitable activities England 46,732 - 46,732 37,311 Scotland 6,113 - 6,113 5,174 Wales 3,935 - 3,935 3,067 Northern Ireland 3,523 - 3,523 3,645 UK wide grants 2,521 - 2,521 2,250 Grants awarded in the year 4 62,824 - 62,824 51,447 Training and support for grantees 5 159 - 159 156 Adjustments to grants given 6 (1,669) - (1,669) (1,596) Grant making and policy 7 3,433 - 3,433 3,038 Governance 7 - 211 211 334 64,747 211 64,958 53,379 TOTAL EXPENDITURE 64,747 6,659 71,406 60,730 Net gains/(losses) on investments 11 - 497 497 (75) Net (expenditure)/income for the year (6,048) 2,857 (3,191) 4,024 Transfers between funds 2 2,629 (2,629) - - Net movement in funds (3,419) 228 (3,191) 4,024 RECONCILIATION OF FUNDS Total funds brought forward 1 July 2016 43,143 5,175 48,318 44,294 Total funds carried forward 30 June 2017 39,724 5,403 45,127 48,318
The Group has no recognised gains or losses for the above two financial periods other than the net movement in funds shown above, all of which are derived from continuing operations. 33
Charity statement of financial activities for the year ended 30 June 2017
(Incorporating Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Year to 30 June 2017 Unrestricted funds 2016 Designated Designated Total Total Grant funds Non-Grant funds reserves Notes £’000 funds £’000 £’000 £’000
INCOME AND ENDOWMENTS FROM: Donations and legacies Donations 2 56,832 - 56,832 53,316 Gift Aid on donations - 4,020 4,020 3,331 Legacies 2 1,576 - 1,576 1,691 Charitable activities - Gift aid payments from Children in Need Limited 9 - 2,629 2,629 1,817 Investments 11 - 918 918 991 Other 2 - 110 110 787 Gifts in kind 3 291 798 1,089 2,149 TOTAL INCOME & ENDOWMENTS 58,699 8,475 67,174 64,082
EXPENDITURE ON: Raising funds Cost of generating voluntary income 7 - 5,444 5,444 5,577 Investment management fees 7 - 175 175 162 Children in Need Limited cost recovery 9 - 286 286 - Exceptional gift in kind 3 - - - 864 - 5,905 5,905 6,603 Charitable activities England 46,732 - 46,732 37,311 Scotland 6,113 - 6,113 5,174 Wales 3,935 - 3,935 3,067 Northern Ireland 3,523 - 3,523 3,645 UK wide grants 2,521 - 2,521 2,250 Grants awarded in the year 4 62,824 - 62,824 51,447 Training and support for grantees 5 159 - 159 156 Adjustments to grants given 6 (1,669) - (1,669) (1,596) Grant making and policy 7 3,433 3,433 3,038 Governance 7 - 211 211 334 64,747 211 64,958 53,379 TOTAL EXPENDITURE 64,747 6,116 70,863 59,982 Net gains/(losses) on investments 11 - 497 497 (75) Net (expenditure)/income for the year (6,048) 2,856 (3,192) 4,025
Transfers between funds 2 2,629 (2,629) - - Net movement in funds (3,419) 227 (3,192) 4,025
RECONCILIATION OF FUNDS Total funds brought forward 1 July 2016 43,143 5,161 48,304 44,279 Total funds carried forward 30 June 2017 39,724 5,388 45,112 48,304
The Charity has no recognised gains or losses for the above two financial periods other than the net movement in funds shown above, all of which are derived from continuing operations.
35
Consolidated Cash Flow Statement for year ended 30 June 2017
Year to Year to 30 Jun 17 30 Jun 16 Schedule £’000 £’000 Cash flows from operating activities Net cash provided by operating activities A 4,379 7,315
Cash flows from investing activities: Interest from investments 918 991 Purchase of equipment (42) (22) Purchase of investments (170,865) (124,247) Proceeds from sale of investments 160,760 119,044
Net cash used in investing activities (9,229) (4,234)
Change in cash and cash equivalents in the reporting period (4,850) 3,081 Cash and cash equivalents at the start of the reporting period B 7,990 4,909 Cash and cash equivalents at the end of the reporting period B 3,140 7,990
A. Reconciliation of net income to net cash inflow from operating activities
Year to Year to 30 Jun 17 30 Jun 16 £’000 £’000 Net (expenditure)/income for the year (3,191) 4,024 Depreciation charges 43 51 Investment income (918) (991) (Gain)/loss in investment (497) 75 Decrease in stock 105 57 Increase in debtors (2,048) (4,644) Increase in creditors 10,885 8,743 Net cash inflow provided by operating activities 4,379 7,315
B. Analysis of cash and cash equivalents
At 30 Jun 16 Cash flows At 30 Jun 17 £’000 £’000 £’000 Cash at bank 5,309 (5,309) 0 Money market deposits 2,681 459 3,140 Total cash and cash equivalents 7,990 (4,850) 3,140 36
Notes to the financial statements for the year ended 30 June 2017
1 Principal accounting policies
Statement of compliance BBC Children in Need is a registered charity and a company limited by guarantee incorporated in England. The Registered Office is Bridge House, Media City UK, Salford M50 2BH.
The Company’s financial statements have been prepared in compliance with the Charities SORP (FRS 102) issued in January 2015 as it applies to the financial statements for the year ended 30 June 2017.
Basis of preparation The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value. The statements have been prepared in accordance with the Statement of Recommended Practice - Charities SORP (FRS 102), issued by the Charity Commission in January 2015, applicable Accounting Standards in the United Kingdom, Companies Act 2006, and the requirements of the Charities Act 2011. The Charity is a public benefit entity.
The financial statements are prepared in Sterling which is the functional currency of the Charity and rounded to the nearest £’000. The Charity’s presentational currency is the same as it’s functional currency.
Income All income with the exception of legacy income and gifts in kind is recognised once the Charity has entitlement to it, it is probable that the income will be received and the monetary value of the income can be measured with sufficient reliability.
Legacy income is recognised when the criteria of probability, measurement and entitlement are met. For pecuniary legacies this is considered to be on the granting of probate. For residuary legacies this is considered to be on the earlier of the date cash is received or the date final estate accounts are approved.
Donated services and facilities are treated as gifts in kind and are included as income (with an equivalent amount in resources expended) at the estimated value to the charity. This income has been recognised as the benefit to the charity is reasonably quantifiable, measurable and material, the Charity is entitled to the donation in that control over the expected economic benefit has passed and it will more than likely flow to the charity (further details are given in Note 3).
Grant expenditure Grant expenditure is recognised when grants are approved by staff or Trustees and notified to the organisations concerned, payment is probable, it can be measured reliably and all conditions have been met. Grant expenditure not yet paid is recognised as a liability on the balance sheet. If grants are payable in less than one year they are classified as short term and if payable in more than one year then they are classified as long term. For grants payable in more than one year discounts for present value have not been applied on the basis of materiality.
Other expenditure Expenditure is accounted for on an accruals basis and is recognised when there is a legal or constructive obligation committing the Charity to the expenditure, payment is probable and it can be measured reliably. Costs have been directly attributed to a particular heading in the Statement of Financial Activities on a headcount basis or on a time basis consistent with the use of the resource.
Cost of generating funds consists of costs incurred by the Charity in encouraging organisations and individuals to make voluntary contributions or to organise a fundraising event. This includes all costs of production and distribution of publicity materials, the costs of staff and other expenditure incurred in communicating with fundraisers and donors and the cost of Charity organised events and challenges.
Grant giving costs represent the cost of monitoring and evaluating projects to ensure the money is being used to maximum effect and ensuring that grant making is supported, processed and governed responsibly. This includes costs of staff who support the grant making process, external assessors, regional and national committee meetings and expenditure incurred in this process. 37
Governance costs include all costs involving the public accountability of the Charity and its compliance with regulation and good practice. These include costs of staff, external audit and legal fees along with Trustee expenses and meeting costs.
Further details of other expenditure are shown in Note 7.
Tangible assets Tangible assets costing more than £1,000 are capitalised, included at cost and written off over their useful lives on a straight line basis. Depreciation is provided on all tangible assets at rates calculated to write off the costs of each asset on a straight line basis over its expected useful life as follows:
IT equipment and software 3 years Furniture, fixtures and fittings 3 years
Further details of assets are shown in Note 10.
Investments Grants are released in instalments across the life of the project (typically 3 years) therefore we will always have some funds that we hold in investments.
Investments are included in the Balance Sheet at mid-market value. All gains and losses are shown in the Statement of Financial Activities. They are classified as fixed investments if they represent grants awarded and payable in more than one year (presented as a long term creditor) and grant funds due to be awarded where the payment will be made in more than one year (presented as the grant fund). They are classified as current investments if they represent grants payable in less than one year.
Further details of fixed and current investments are given in Note 11.
Stock Stock is held by Children in Need Limited. Further details of the accounts of Children in Need Limited are given in Note 9. Stock is stated at the lower of cost and net realisable value. Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal.
Short term debtors and creditors Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the Statement of Financial Activity in the cost of generating voluntary income.
Operating leases Operating lease rentals are charged to the Statement of Financial Activity on a straight line basis over the period of the lease.
Further details of operating leases are given in Note 14.
Pension costs Children in Need staff are eligible to participate in the BBC Pension Scheme (a defined benefit scheme, now closed to new members), LifePlan or Group Personal Pension Scheme (defined contribution schemes). The assets of the BBC’s pension schemes are held in trustee administered funds, separate from those of BBC Children in Need.
The scheme is subject to independent valuation by a professionally qualified actuary at least every three years, on the basis of which the actuary certifies the rate of employer’s contributions. These, together with the specified contributions payable by employees and proceeds from the scheme’s assets, are expected to be sufficient to fund the benefits payable under the scheme. The most recent full actuarial valuation of the scheme was prepared as at 1 April 2016 by Towers Watson, consulting actuaries. At 1 April 2016, the actuarial valuation showed a funding liability of £1,789m.
A recovery plan was agreed between the BBC and the pension scheme Trustees which details the contribution amounts to be paid by the BBC over an 11 year period commencing 2017.
The contributions to the scheme by members are paid via a salary sacrifice arrangement. These have been treated as employer contributions. 38
Projection Contribution rates 2018 % 2017 % 2016 % Employer* 31.4 16.7 16.7
Employee (old and new benefits) 7.5 7.5 7.5
Employee (career average benefits 2006) 4.0 4.0 4.0
Employee (career average benefits 2011) 6.0 6.0 6.0
BBC Children in Need accounts for the scheme as if it were a defined contribution scheme. This is because it is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The BBC also operates its own defined contribution pension schemes, including those operated in the USA and Australia. The pension cost for these schemes therefore represents contributions payable by the Charity and the costs amounted to £296k in the year (2016: £298k) and have been recognised as an expense in the Statement of Financial Activity.
The Actuarial valuation was updated for accounting purposes to 31 March 2017 by Willis Towers Watson, consulting actuaries. This valuation identified a deficit of £1,140.7m in the scheme at 31 March 2017 (2016: £1,003.4m). Additional disclosure about the scheme and its financial position under IAS 19 is provided in the BBC Annual Report and Accounts that can be obtained from www.bbc.co.uk/annualreport.
Structure of reserves
Designated Funds The Charity holds donation income in the Grant Fund which is designated to ensuring maximum positive impact on disadvantaged children and young people. The money is therefore spent on BBC Children in Need’s grant making activity, grant making policy and making an impact - charitable initiatives designed to make a positive difference to the lives of children and young people. This includes making awards to projects and the cost of allocating, monitoring and evaluating grants to ensure that donations are being used to maximum effect. It is not always possible to accurately match the amount of grant making activity with the amount of income in any one year therefore any unspent donation income is always monitored separately in this designated fund. Trading contribution and licensed income has also been fully transferred into this fund in the year.
The Charity holds other income made up of interest earned on Investments and Gift Aid in the Non-Grant Fund. This fund is used to cover the costs of generating income and other activities which support the governance, growth and development of the Charity. A proportion is also held in reserve to cover any potential investment losses generated through short term volatility and to fund a potential short term funding deficit should future income levels fall unexpectedly.
Other Non-Grant funds also include the net assets of Children in Need Limited.
The charity has made the following changes to the funds’ usage in the year: • Costs incurred in support of grant making activity are covered by the Grant Fund. Previously they were covered by the Non-Grant fund. • All trading contribution and licensed income is allocated to the Non-Grant Fund. Previously this income was split across the funds. If this income creates a surplus in the Non-Grant Fund it is then transferred to the Grant Fund. In the reporting year, 100% of this income was indeed transferred into the Grant Fund.
Consolidation These consolidated financial statements incorporate the results of BBC Children in Need and its wholly owned subsidiary undertaking, Children in Need Limited, for the year ended 30 June 2017, on a line by line basis. Children in Need Limited is a company registered in England and Wales and exists primarily to sell Children in Need merchandise and license products using the Pudsey Bear trademark.
Loan to Children in Need Limited The interest bearing loan is a basic financial instrument and is recorded at fair value on both initial recognition and subsequent recognition. As the loan is repayable on demand fair value is equal to face value. Interest is charged on the Facility on a daily basis at the rate of 1.5% per annum above the base rate of Royal Bank of Scotland plc.
Judgements and estimates The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the balance sheet date and the amounts reported for income and expenditure during the year. 39
Judgement has been applied in the consideration of what gifts in kind are included in the Charity’s financial statements. The gift in kind has been accounted for where the actual expenditure incurred by the BBC or corporate partner can be measured reliably and the Charity has received the benefit. Many of the other elements of BBC support are very difficult to quantify as they are not discrete activities but embedded, partly as newsworthy and entertainment content, within the operations and business of the BBC. The Appeal show provides valuable content, which attracts a large audience, and without it the BBC would have to produce alternative content. As such the full value of support provided by the BBC has not been included in the Charity’s Statement of Financial Activities.
2 Income
Grant Income Income from donations totalling £56,832k (2016: £53,316k) is generated from direct public support, our Corporate Partners and BBC Programmes. Together with legacies, licensed and trading income the total reported is £61,037k (2016: £56,881k). In 2016 licensed income was allocated to the Grant Fund. In 2017 both trading and licensed income have been transferred into the Grant Fund to increase our positive impact on children and young people.
BBC Direct Public Corporate Programmes Support Partnerships and Events Total 2017 Total 2016 Grant Income Analysis £000 £000 £000 £000 £000 Schools 5,976 - - 5,976 5,646
Public Fundraising 6,590 - - 6,590 6,167
Donations 13,966 14,675 15,625 44,266 41,503
Total Donations 26,532 14,675 15,625 56,832 53,316
Legacies 1,576 - - 1,576 1,691
Other - - - - 102
Total grant income 28,108 14,675 15,625 58,408* 55,109 Trading & licensed income 234 2,395 - 2,629 1,772 transferred to grant fund Total Income 28,342 17,070 15,625 61,037 56,881
*Excludes gift in kind of £291k (see note 3).
Non Grant Income Total non-grant income of £5,048k (2016: £5,007k) is generated from gift aid of £4,020k (2016: £3,331k), realised investment income of £918k (2016: £991k) and £110k of other income (2016: £685k). The gross margin of £2,629k from trading and licensed income has been transferred to the grant fund to increase our positive impact on children and young people.
3 Gifts in kind
BBC Children in Need is the UK corporate Charity of the BBC and as such is supported by the BBC in a number of ways including but not limited to:
• the provision of office space and other services at no charge; • the preparation and broadcast of the annual television BBC One Appeal Show including national and regional programming content; • the extensive support of programmes across all platforms both on the day of the Appeal and the campaign build up; • significant promotional support and coverage of the Appeal across the BBC local television and radio network in the days before the Appeal and on Appeal night; and • specialist advice and administrative support including the provision and maintenance of the BBC Children in Need pages of the BBC’s website.
The costs of support through the provision of office space and other services for the last financial year have been calculated as £602k (2016 - £548k) based on actual office space utilised by BBC Children in Need during the year. This amount has been recorded as income, with an equal amount included in expenditure, in the statement of financial activities as it meets the recognition criteria set out in the Charities SORP 2015. 40
Gifts in kind (continued) In addition, Lloyds Banking Group, our principal partner supported the cost of School fundraising of £487k (2016: £737k). This related to design, artwork and other marketing costs and also staff costs that have been incurred in the support of the schools fundraising initiative.
Group Group 2017 £’000 2016 £’000 Provision of office space 602 548
Corporate partner fundraising support 487 737
Relocation costs - 864
1,089 2,149
The total gift in kind of £1,089k has been allocated £798k to the non-grant fund and £291k to the grant fund (see note 7 - support cost breakdown).
4 Grant expenditure
The grants given to charities and organisations fall into the bands detailed below:
2017 2016 Qty £’000 Qty £’000 £1 - £1,000 1 1 2 2 £1,001 - £5,000 54 189 99 367 £5,001 - £10,000 778 7,280 708 6,532 £10,001 - £25,000 13 227 21 381 £25,001 - £100,000 408 29,763 383 26,706 Over £100,000 201 25,364 135 17,459 1,455 62,824 1,348 51,447
In the year ended June 2017 £62,824 was awarded to 1,455 projects.
Included in the above figures is a grant to Buttle UK for the BBC Children in Need Emergency Essentials programme. A total of 11,262 grants to a value of £2,422k (2016: £2,250k) were awarded to individual children and young people through this programme during the year.
For further details on the purpose and policy grant making refer to the Trustee Report (page 15).
5 Support, evaluation and training
Some organisations, particularly those where the Charity is funding a staff post, are given training and support in how to measure and report the difference their project is making to the children and young people they work with. The cost in 2017 amounted to a value of £159k (2016: £156k).
6 Adjustments to grants given
An amount of £1,669k (2016: £1,596k) has been written back to the Statement of Financial Activities. This represents adjustments to grants and the full and partial return of grants that have been awarded in the current and the prior year. This amount is added back to the total available for future distribution..
7 Operating costs excluding gifts in kind
In order to administer the Charity efficiently, fundraise creatively, manage the funds raised professionally and operate as an effective grant maker, BBC Children in Need incurs costs.
Where staff work across more than one area, costs are allocated based on the proportion of time spent on the areas of generating voluntary income, governance and making an impact which includes the cost of grant making. Office & IT costs and Professional fees are allocated based on usage. The BBC Gift in Kind to support the provision of office space together with depreciation is allocated on staff numbers and the gift in kind from corporate partner fundraising support is specific to the area of ‘generating voluntary income’. 41
7 Operating costs excluding gifts in kind
Staff Support Other 2017 2016 costs costs direct costs total total £’000 £’000 £’000 £’000 £’000 Costs of generating funds Cost of generating voluntary income 2,185 1,441 1,818 5,444 5,577 Investment management fees - - 175 175 162 Trading operating costs - - 830 830 748 Exceptional item - - - - 864 Charitable activities Grant making, policy & Impact 2,155 690 588 3,433 3,038 Governance 116 75 20 211 334 4,456 2,206 3,431 10,093 10,723 Gifts in kind (1,089) (2,149) Operating costs 9,004 8,574
Specific expenditure items included in the figures above are:
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Depreciation 43 51 33 39 Operating leases 43 41 43 41 Reimbursement of trustees expenses 2 3 2 3 Auditors’ remuneration: Audit of these financial statements 20 20 20 20 Audit of the charity’s subsidiary pursuant to the 2 2 - - legislation Legal fees 16 14 16 14
Support costs are broken down as:
Office S t a ff and IT Gifts 2017 2016 costs costs Depreciation Professional in kind total total £’000 £’000 £’000 fees £’000 £’000 £’000 £’000 Costs of generating funds Cost of generating voluntary 374 234 19 32 782 1,441 1,575 income Exceptional item ------864 Charitable activities Grant giving costs 226 141 12 20 291 690 767 Governance 33 21 2 3 16 75 127 633 396 33 55 1,089 2,206 3,333 42
8 Employee and pension information
The average number of persons employed during the period split by function is as follows:
Group Group Charity Charity 2017 2016 2017 2016 Generating funds 70 58 66 52 Grant giving 62 49 62 49 Governance 4 3 4 3 136 110 132 104
The equivalent number of full time staff is 132.
The breakdown of the group’s salary costs is as follows:
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Wages and salaries 4,341 3,905 4,183 3,733 Social Security costs 432 404 418 387 Pension costs 296 286 291 282 Other staff costs 23 - 22 - 5,092 4,595 4,914 4,402
Trustees do not receive any remuneration or receive any other benefits for their roles as Trustees. Trustee expenditure includes the reimbursement of expenses incurred by Trustees while carrying out their duties for the Charity, primarily for travel expenses of Trustees not based in London to attend meetings. Expenses were paid in the period to a value of £1,494 to 2 trustees (2016: £3,219).
Employees’ emoluments fell into the following bands of £10,000:
Group Group 2017 2016 £60,000 - £69,999 3 2 £70,000 - £79,999 1 2 £80,000 - £89,999 1 1 £90,000 - £99,999 2 1 £100,000 - £109,999 - - £110,000 - £119,999 - 1 7 7
The emoluments paid to the Chief Executive for the year were £86,667 (£130k grossed up to 12 months) (2016: £119,934) per annum.
Retirement benefits are accruing under defined benefit schemes for one (2016: four) of the above higher paid members of staff.
43
9 Investment in subsidiary
BBC Children in Need owns 100% of the issued ordinary share capital of £2 of Children in Need Limited (registered company 2461031), a company registered in England and Wales, which licenses products using the Pudsey Bear trademark.
A summary of the trading results and balance sheet of Children in Need Limited is set out below.
Turnover of £778k is derived from the sale of merchandise to the public through our online store and fundraising events (2016: £792k). In addition, Corporate Partners purchase Children in Need product to support their fundraising activities as well as sell their own products licensed by Children in Need Limited, £2,395k (2016: £1,772k).
Gift aid in the SOFA is presented in income as gross profit as £2,629k and £286k of cost recovery presented in expenditure on raising funds.
Year to 30 Jun 17 Year to 30 Jun 16 £’000 £’000 Turnover 3,173 2,564 Cost of sales (544) (443) Gross profit 2,629 2,121 Operating expenses (286) (304) Net profit 2,343 1,817 Gift aid payment to BBC Children in Need Appeal (2,343) (1,817) Retained in Children in Need Limited - -
30 Jun 17 30 Jun 16 £’000 £’000 Fixed asset Tangible assets 9 13 Current assets Stock 89 194 Debtors 2,788 1,738 Cash at bank and in hand 558 567 Total current assets 3,435 2,499
Creditors: amounts falling due within one year (3,429) (2,497) Net current assets 6 2
Total assets less current liabilities 15 15
Creditors: amounts falling due after more than one year - - Net assets 15 15
Share capital - - Profit and loss account 15 15 Total funds 15 15 44
10 Tangible assets
IT equipment & Furniture, fixtures Group software £‘000 & fittings £’000 Total £’000 Cost As at 01 July 2016 427 1 428 Additions 42 - 42 Disposals - - - As at 30 June 2017 469 1 470
Accumulated depreciation As at 01 July 2016 372 1 373 Charge for the year 43 - 43 Disposals - - - As at 30 June 2017 415 1 416
Net book value As at 30 June 2016 55 - 55 As at 30 June 2017 54 - 54
IT equipment & Furniture, fixtures Charity Total £’000 software £’000 & fittings £’000 Cost As at 01 July 2016 388 1 389 Additions 35 - 35 Disposals - - - As at 30 June 2017 423 1 424
Accumulated depreciation As at 01 July 2016 345 1 346 Charge for the year 33 - 33 Disposals - - - As at 30 June 2017 378 1 379
Net book value As at 30 June 2016 43 - 43 As at 30 June 2017 45 - 45 45
11 Fixed and current investments
The portion of the Charity’s investment portfolio that is classified as fixed investments relate to grant creditors committed, or grants to be awarded and payable in more than one year. Current investments relate to grant creditors committed, or grants to be awarded and due for payment within one year plus any other short term liabilities.
Investments are analysed below, between Fixed Income - Certificates of Deposit, Floating Rate Notes, Gilts or high quality securitised credit (low risk loans), Corporate Bonds – Bank Deposits and Alternatives – income generating assets such as property funds. Investments are valued at current market value as at 30 June 2017.
Income in the year of £1,415k relates to interest earned on investments held in the year plus revaluation gains (2016: £916k).
2017 2016 £’000 £’000 Market value at 1 July 2016 112,498 107,370 Add: acquisitions at cost 168,079 124,084 Less: disposals at open book value (160,760) (119,044) Add: Net gains/(losses) on revaluation 497 (75) Market value at 30 June 2017 120,314 112,335 Add: deposits held at financial institutions 2,999 213 Less: deposits held at financial institutions at 30 June 2016 (213) (50) Total investments at 30 June 2017 123,100 112,498
The investments can be analysed as follows:
2017 2016 Valuation Cost Valuation Cost £’000 £’000 £’000 £’000 Fixed income -maturing in more than 1 year 24,205 24,397 53,891 54,000 -maturing in less than 1 year 16,555 16,552 19,067 19,097
Corporate Bonds -maturing in more than 1 year - - - - -maturing in less than 1 year 48,778 48,746 34,355 34,282
Alternatives -maturing in more than 1 year 30,563 30,000 4,972 5,000 -maturing in less than 1 year - - - -
Deposits held with financial institutions 2,999 2,999 213 213 123,100 122,694 112,498 112,592
Included as: Fixed asset investments 57,093 57,093 55,037 55,037 Current investments 66,007 65,601 57,461 57,555 123,100 122,694 112,498 112,592 46
12 Debtors
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Trade debtors 3,912 1,282 1,133 44 Amount owed by subsidiary undertaking - - 3,387 2,480 Other debtors 2,112 2,043 2,109 2,043 Prepayments and accrued income 4,184 4,835 4,178 4,335 10,208 8,160 10,807 8,902
The Children In Need Limited debtor includes an amount of £450,000 which is repayable within one year.
13 Creditors
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Amounts falling due within one year Trade creditors 235 1,669 196 1,660 Grants payable 50,921 45,521 50,921 45,521 Accruals and deferred income 784 764 781 756 Taxation 459 151 459 151 52,399 48,105 52,357 48,088
Amounts falling due after more than one year Grants payable 39,065 32,474 39,065 32,474 39,065 32,474 39,065 32,474
Within grants payable £50,921k is due to be paid within one year and £39,065k paid within the next two to three years.
Within accruals and deferred income there is £64k of deferred income which relates to a contribution to salary costs from Lloyds one of our corporate sponsors which will be expended in the first six months of 2017/18 financial year.
14 Operating leases
Group Group
Land & Land & buildings Other buildings Other 2017 2017 2016 2016 £’000 £’000 £’000 £’000 Operating leases which expire: - within one year - 43 - 40 - later than one year and not later than five years - 24 - 38 - 67 - 78 47
15 Designated Funds
The Charity started to award grants a few weeks after Appeal 2016 and has continued that process during the year. As at 30 June 2017, the Charity had awarded £26,826k and was on track to fully allocate the remainder over the coming months. Appeal income is reserved by the Trustees for use in grant making and funds held at the end of June will be awarded as grants over the coming months.
The fund balance, movements and purpose for which funds held is shown in the table on page 23.
Designated Grant Funds - £39.7 million (2016: £43.1m)
At 30 June 2017 the Charity held designated grant funds of £39,724k representing appeal income to be awarded to projects in BBC Children in Need’s future grant-making activity.
Designated Non Grant Funds - £5.4 million (2016: £5.2m)
Other designated funds are made up of interest earned on monies held (less operating costs) in previous years and do not include any donation income from the public. They also include the net assets of Children in Need Limited of £15k.
Funds are held for the following purposes:
- The ‘Continuity Fund’ is held to cover uncertainty of income available to fund costs.
- The ‘Development Fund’ of £1m is to allow for future investment and respond to growth opportunities.
- The ‘Investment Continuity Fund of £4m is to manage volatility or offset absolute loss in the value of income generating assets.
16 Taxation
BBC Children in Need, a company limited by guarantee was registered as a Charity on 7 August 2003. The Charity is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
17 Related Parties
Subsidiary Undertaking During the year the Charity entered into transactions with a related party, in the ordinary course of the charities activity. Trading balances outstanding at 30 June are as follows:
2017 2016 £’000 £’000 Subsidiary Undertaking 3,387 2,480
The Charity has taken advantage of the exemption under paragraph 33.1a of FRS 102 not to disclose transactions with the subsidiary undertaking as it is wholly owned.
During the financial year BBC Children in Need put out to tender for legal support. Trustee Joanna Berry who is employed as a consultant for the firm Mills & Reeve LLP declared a conflict of interest but had no involvement in the tender process, and received no remuneration/commission. Mills & Reeve were appointed along with two other firms.
Key Management Personnel All principal officers who have authority and responsibility for planning, directing and controlling the activities of the Charity are considered to be key management personnel. Total remuneration in respect of these individuals is £441k (2016: £466k).