Charity Index

Looking up: Charity 100 Index September 2012

Finance | Diane Sim | 5 Sep 2012

Strong income growth at charities reporting in the third quarter has considerably boosted the performance of the Charity 100 Index, reports Diane Sim.

The addition of 13 charities with financial year-ends in the three months up to 30 September 2011 has resulted in a very positive quarter for the Charity 100 Index, which rose by 59 points and outperformed its average quarterly benchmark by 47 points.

As it is a good three years since any outperformance of the Charity 100 Index has been any more than marginal, the significance of this welcome uplift should not be understated.

All income streams contributed to this positive result, with the exception of legacies, which underperformed its average quarterly rise by just one point. Investment income led the way with a result 72 points above its average benchmark, followed by voluntary income 50 points ahead, grants and fees 47 points ahead and trading income 34 points ahead.

Annual performance figures reflect the same trend, albeit with a different pecking order. In the year to 30 September 2011 voluntary income outperformed its annual benchmark by 102 points, followed by investment income 56 points ahead, grants and fees 50 points ahead and trading income 16 points ahead. Only legacies let the side down, trailing some 237 points behind its annual performance benchmark.

Lucky 13

And the good news is evenly spread: 12 of the 13 charities reporting in the third quarter experienced income gains, and half of these are double-digit increases. Particularly strong performers this quarter are Charity Projects and the United Church Schools Foundation, which reported annual income rises of 68 per cent and 56 per cent respectively.

That said, it is very difficult to make valid year-on-year comparisons at the former, due to the biennial nature of its activities. Charity Projects, better known as Comic Relief, organises two main fundraising events, which take place in alternate years: Red Nose Day, which raised £108.4m in 2011 and Sport Relief, which raised £44.2m in 2010.

As the trustees of Charity Projects note in their annual report: “There still remains a substantial difference between a Red Nose Day year and a Sport Relief year in the annual income and expenditure for the group, and therefore reference to the comparative figures for the previous period’s operation will not always prove informative.”

Indeed, comparisons between alternate years are probably a more meaningful guide to performance: the £108.4m raised in 2011 represents a 31 per cent increase on the previous Red Nose Day campaign in 2009. The sum includes £16m of matched funding from UKAid which, if excluded, reduces the public fundraising total to £92.4m, a 29 per cent increase on the comparable figure in 2009.

Red Nose Day USA

According to the trustees, the result was “achieved in the continuing challenging economic environment and considerably outperformed our internal targets”.

Building on the success of the UK event, work is in progress to launch a Red Nose Day USA.

The initiative has received funding of £1.6m from the Bill and Melinda Gates Foundation to “help create Red Nose Day in the USA, to develop creative ways of demonstrating success stories from Africa and to raise awareness of the need for global support to deliver the health-based Millennium Development Goals.”

The 58 per cent rise in income at the United Church Schools Foundation reflects in large part its acquisition of the Emmanuel Schools Foundation, which took place in October 2010. Even discounting the financial impact of the acquisition, the education charity would still have reported a healthy 15 per cent rise in total income.

The third-top performer after Charity Projects and the United Church Schools Foundation is the Children’s Investment Fund Foundation UK (CIFF), which reported a 26 per cent increase in income to £55.9m. The main contributor is a 125 per cent increase in investment income to £36.7m, which has also provided a considerable boost to the Charity 100 investment sub-index this quarter.

Dividends from overseas equities, which account for almost 83 per cent of CIFF’s investment income, have almost doubled in the year under review. 

 >>Download September Charity 100 Index constituents at a glance as .pdf<<

Directory: Children's Investment Fund | Comic Relief | United Church Schools Foundation
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