UNICEF UK Trustees Report and Financial Statements 2010

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The United Kingdom Committee for UNICEF Report of the Trustees For the year ended 31 December 2010 Costs of generating funds Charities have to spend money to raise money. Over the past five years 7 , UNICEF UK has spent an average of 23 pence to raise each pound. This covers the costs of raising funds through mail campaigns, supporting our existing donors and recruiting new donors. This also covers the costs associated with buying, marketing and selling UNICEF greeting cards and gifts. Charitable expenditure Of the total income raised in 2010, £63.2 million was available for programmes to benefit children. Of this, £52.3 million was for specific programmes or countries chosen by our donors, £4.7 million for UNICEF core programmes and £6.2 million for UNICEF UK’s advocacy and programmes in the UK, such as the Baby Friendly Initiative. On average, over the last five years, 75 per cent of UNICEF UK’s gross income was available for programmes, after fundraising, sales and administration costs. Fundraising Standards Board (FRSB) UNICEF UK is a member of the Fundraising Standards Board (FRSB), the body for self-regulation of fundraising in the UK. As a member of the FRSB, UNICEF UK adheres to the highest standards of good practice with our fundraising. We are also committed to giving the public the comfort of a ‘safety net’ provided by the FRSB’s robust complaints system. Management and administration and governance costs Management and administration costs, calculated in compliance with the previous Charities Statement of Recommended Practice (SORP 2000), amounted to £1.4 million in 2010 compared to £1.3 million in 2009. On average over the last five years, management and administration costs have amounted to 2 per cent of total income. These management and administration costs include governance costs, explained below. Under the revised Statement of Recommended Practice on Accounting and Reporting by Charities issued in 2005 (SORP 2005), management and administration support costs are allocated between the charity’s functional activities and “governance costs”. Governance costs provide the governance infrastructure for the charity to operate and generate the information for public accountability, and include the costs of strategic planning for the future development of the charity. Governance costs amounted to less than 1 per cent of total income in 2010. UNICEF UK Enterprises Limited The charity’s wholly owned trading subsidiary carries out commercial trading activities for the charity. During the year, income of £2.0 million (2009: £2.3 million) was raised from the sale of bought-in cards and gifts, corporate cause-related 7 A five-year rolling average more clearly shows the charity’s core underlying costs as it minimises the impact of one-off or exceptional events such as humanitarian emergencies. 30
The United Kingdom Committee for UNICEF Report of the Trustees For the year ended 31 December 2010 marketing arrangements, commissions and royalties. After allowing for associated expenditure and management charges, £1.5 million (2009: £1.3 million) was covenanted under Gift Aid to UNICEF UK. Reserves UNICEF UK’s policy on reserves is to: Retain an emergency fund to allow for an immediate response to the humanitarian needs of children during an emergency, even if we have not yet received income from the relevant appeals. Maintain a general fund to finance working capital needs and cover the resources invested in fixed assets. UNICEF UK has no need for large reserves to provide for future programmes, as UNICEF headquarters (UNICEF HQ) safeguards these. In addition, the charity’s diversified sources of income mean that there is a low risk that there would be a dramatic sudden reduction in donations from all sources, and therefore it is unnecessary to hold large reserves to deal with such an eventuality. At the end of the year, there was also £30,000 of restricted funds relating to income that is for programmes carried out by UNICEF UK and hence not paid to UNICEF HQ. A designated fund of £250,000 has been set aside at the end of 2010 for a Baby Friendly Initiative research project and new information management system that we will implement in 2011. Ethical investment policy Other than holding money on deposit at the bank for short fixed periods, UNICEF UK has chosen to hold no stocks or shares and does not invest in properties. We sell immediately any shares or similar investments donated to UNICEF UK, so that those funds are available for our work for children. Except for amounts held in our reserves as described above, UNICEF UK transfers all available funds to UNICEF HQ. Consequently, UNICEF UK’s investment policy means that no investments are kept that could be considered unethical. For the group personal pension schemes that UNICEF UK has negotiated for our employees, we ensure that employees have the option to choose to invest their pension funds entirely in ethical investments. Changes in assets The changes in fixed assets during 2010 are set out in note 13 to the financial statements. The net value of charity’s fixed assets has decreased from £2.3 million at the end of 2009 to £2.2 million at the end of 2010 because depreciation and disposals of assets that had reached the end of their useful life exceeded the cost of new assets purchased. The cash at bank held by the group at the year-end amounted to £2.7 million, compared to £4.2 million at the end of 2009. This reduction was the result of a deliberate decision to transfer cash to UNICEF HQ to hold because of low interest rates achievable on deposits in the UK. 31
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UNICEF UK Trustees Report and Financial Statements 2010

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