Blog: Government delays good for fundraisers 2

Finance | Daniel Fletcher | 8 Feb 2010

International accounting has never attracted so much interest from charity fundraisers, as the ongoing saga over the last six months about the impact of International Accounting Standard 27.

The Treasury announced the latest instalment of the story on Friday, when they said they were not going to do anything for another year. In this case, no news is good news, at least for hospital charities. I imagine the accountants who would have been faced with extra work on the back to the standard might see it differently.

So what’s the story and why does it matter? In light of much needed consensus in international accounting (remember Enron et al?), the International Accounting Standards have been introduced. However, with every good idea, there are various unintended consequences. In this case, IAS27 implies that NHS Trusts should include within their accounts the accounts of all organisations to which they are linked where the value of accounts is material. About 30 large hospital charities, which are closely linked administratively to their NHS trusts, could be expected to have their accounts included within their NHS trust’s accounts.

As a former hospital fundraiser, I know that its really rather important to demonstrate that hard-earned donations to hospital charities aren’t simply going into some perceived black hole in the NHS trust’s coffers. Donors, quite rightly, want to know that their gifts are additional to state funding, and that they are making a difference, adding value where taxpayers’ money leaves off.

While IAS27 wouldn’t in reality change how NHS charity money is used, it would really muddy the waters, and give the impression that the charity and its hospital are one and the same.

Let’s hope HMT’s latest deferment can become an ongoing one. One case where government indecision is actually a good thing.

Blog: Government delays good for fundraisers

Comments

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Stephen Cox
Head of Comms
9 Feb 2010

Delay and review of these new rules as they apply to hospital charities is good news. But actually, they don't apply to Great Ormond Street Hospital for Children, the NHS Trust and its fundraising charity.

Great Ormond Street Hospital Children's Charity has Trustees who are rigorously independent of the NHS Trust, no member of NHS Trust staff has a vote in how funds are allocated. It is therefore the long established opinion of the Trust and our auditors that IAS 27 simply does not apply, and we have made it clear we are not going to consolidate our accounts.

[Reply]

Daniel Fletcher
Head of Partnerships and Fundraising
9 Feb 2010
Response to [ Stephen Cox]

I think the point is that the rules shouldn't apply to any hospital charity. By definition, all hospital charities are independent from their NHS trust. However, such common-sense doesn't help if a blanket ruling on IAS27 were enforced. That's why it represents a threat, and why the deferment hopefully indicates that the knotty issue will lie dormant for some time, and maybe fade away.

[Reply]

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