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NCVO's income plunged by a quarter last year, accounts show

Sir Stuart Etherington, CEO of NCVO
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NCVO's income plunged by a quarter last year, accounts show1

Finance | Tania Mason | 2 Nov 2012

The NCVO lost around a third of its staff in the 2011/12 financial year, as its income plummeted by 27 per cent to just under £7.4m.

The umbrella body’s annual report and accounts, just published, state that the year was one of “significant upheaval” for NCVO, and that the year ahead will continue to be challenging.

Most of the income reduction was the result of the cut to the Office for Civil Society strategic grant, which fell from £1.09m to £500,000, and the loss of other statutory funding for national support services.

Income from trading, which included venue hire, commercial fees, publications and brokered services, fell by 1 per cent to £1.7m. Voluntary income dropped just slightly to £1.147m as the annual stipend from Charities Aid Foundation increased from £1.08m to £1.1m but other donations fell from £60,000 to £36,000.

Member subscriptions dropped slightly to £961,000 as the organisation finished the year with 8,231 members, 144 less than the year before.

The NCVO said it had “radically changed the way we operate” in response to the budget cuts.  It introduced a much leaner staffing structure, as average employee numbers fell from 115 to 88 and staff costs reduced by 25 per cent to £4.29m.  It merged with the Third Sector European Network and with Know How Non-Profit. It built a 4,200 sq ft fourth floor on top of its King’s Cross headquarters to create a sector hub, and it began preparations for a merger with Volunteering England, which is expected to be complete by the end of this year.

Director pay and expenses

The NCVO’s three highest-paid executives did not take a pay rise during the year.  And the organisation clamped down on expenses too: expenses claimed by chief executive Sir Stuart Etherington’s office fell from £23,884 in 2011 to £17,599, while the total expenses claimed by all the directors reduced from £35,851 to £28,092.   Trustees were even more frugal: after claiming £17,590 in 2011, their expenses shrank to just £6,501 in 2012.

The NCVO’s defined benefit pension scheme was closed to future accrual on 31 March 2011, following an actuarial valuation in September 2010 showed a projected deficit of £4.4m.  A deficit recovery plan was agreed with the Pensions Trust to eliminate the deficit by December 2023.

The organisation finished the financial year with “readily realisable” reserves of £2.038m, a fall from the previous year’s £2.451m.

An NCVO spokesman said: "We are optimistic about the year ahead, with a number of new projects starting both during the 2011/12 accounting period and since.

"The accounts show income from memberships was down as membership numbers fell slightly over the 2011/12 accounting period, but growth later in 2012 means that we today have more members than at the end of 2011 (8,672 compared to 8,375 at the end of 2010/11)."

Ged Simpson
Funding Adviser
Liverpool CVS
2 Nov 2012

From top to bottom, grant reduction has a massive impact regardless how much we try and become shiny social enterprises.

NCVO are an excellent org and I hope they remain so and continue to support (not duplicate) local infrastructure providers.

We wish you better fortune.

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