haysmacintyre / Charity Finance 100 Index: Constituent Review 2018

03 Apr 2018 In-depth

As Europe’s largest biomedical research facility, Francis Crick Institute enters the Charity 100 Index, Diane Sim reviews the movers and shakers following this year’s membership review.

Cancer Research UK raised £100m to help fund the construction of the Francis Crick Institute

This year's review of the haysmacintyre / Charity Finance Charity 100 Index has resulted in a healthy 7 per cent rise in the income required for membership and two new entrants.

The highest new entrant is the Francis Crick Institute, which joins at position 66 based on a three-year average income of £90.6m. Formed in 2015, this biomedical research centre represents a partnership between the Medical Research Council (MRC), Cancer Research UK, the Wellcome Trust, University College London (UCL), Imperial College London and King’s College London.

In 2016 it moved into a purposebuilt, state-of-the-art building near St Pancras International railway station in London. Dedicated to “understanding the fundamental biology underlying health and disease”, it has 1,500 staff including 1,250 scientists and an annual operating budget of over £100m, making it Europe’s largest single biomedical research facility.

Formerly known as the UK Centre for Medical Research and Innovation, it is named after the British molecular biologist, biophysicist, and neuroscientist Francis Crick, co-discoverer of the structure of DNA and sharer of the 1962 Nobel Prize for Physiology and Medicine.

Although the Institute is only in its second year of operation, it registered with the Charity Commission in 2011. As its current position in the ranking is based on only two rather than three years of full operating income, it is highly likely to move into the upper half of the Charity 100 Index next year.

The second new entrant is Sightsavers, which jumps 14 places from position 13 in the Charity 250 Index to the penultimate position in the Charity 100 Index, based on three-year average income of £62.5m. Sightsavers’ position in the ranking would be much higher, were it not for the fact that gifts in kind and one-off gains from asset sales are not recognised as eligible income for calculating the Index.

This makes a substantial difference: in the year to 31 December 2016, gifts in kind accounted for £229.9m, or 76 per cent of total income of £302m. For the purposes of the Index, however, Sightsavers’ income is recorded as the remaining 24 per cent or £72.1m.

Its income from sources other than gifts in kind has fared extremely well over the last two years, growing by 24 per cent in 2015 and by 13 per cent in 2016. Moreover, the charity’s income streams are well diversified, with charitable activities, voluntary income and legacies accounting for 43 per cent, 39 per cent and 18 per cent of total income (excluding gifts in kind) respectively.

That all said, gifts in kind clearly do make a strong contribution to the charity’s activities. The £229.9m recorded in 2016 mainly represents the estimated value of Mectizan tablets from Merck & Co, used for the treatment and prevention of river blindness, and Zithromax from Pfizer, used for the treatment and prevention of trachoma.

Income requirements

Membership of both the Charity 100 and Charity 250 Indexes is reviewed every spring to take into account income fluctuations, new charities and charities for which it had previously not been possible to obtain a threeyear run of audited accounts. Income data is extracted from accounts with financial year ends up to and including 31 March 2017, with the index ranking based on average total income over the last three years.

The minimum income requirements for entry into the Charity 100 Index rose this year by 7 per cent from £58.1m to £62.1m. This resulted in the demotion of Alternative Futures into the Charity 250 Index, with the charity having previously occupied the Charity 100 Index’s final position.

The other charity to drop out of the Charity 100 Index this year was the Lloyd’s Register Foundation. It held position 63 last year but its three-yearaverage income had been skewed by a large one-off endowment of funds following its creation in 2012.

Overall, this year’s constituent review has resulted in comparatively modest changes to both the composition and the pecking order of the Charity 100 Index. This is particularly the case at the upper end of the index, where this year’s ranking of the top 11 charities is identical to last year’s.

And, at the very top, Nuffield Health, Cancer Research UK and the National Trust occupy the top three positions, as they have done for the last 14 years. There are, however, some big position changes further down.

Risers and fallers

The highest riser in this year’s Charity 100 Index is the English Heritage Trust, which jumps 36 places from position 99 to position 63, based on three-year average income of £93.4m.

This relatively new charity was formed from the 2015 restructuring of non-departmental public body (NDPB) English Heritage into two organisations: Historic England, a NDPB which owns and protects 400-plus historic properties, and English Heritage Trust, a charity responsible for managing their day to day operations. Under the terms of the agreement between the two successor bodies, English Heritage Trust received a one-off government grant of £80m in 2014/15 and will receive tapering annual revenue payments until 2023, when it is expected to become financially independent.

According to the trustees, “all the signs are positive that we are on track to achieve our goal of becoming financially sustainable by 2022/23,” with performance in areas such as membership and admissions income and trading income showing substantial growth in 2016/17.

Conversely, the biggest faller is the Education Development Trust – formerly known as the CfBT Education Trust– which drops 39 places from position 37 to 76. Total income remained fairly steady between 2013/14 and 2014/15 but dropped by 19 per cent to £68.8m in 2015/16. According to the trustees, this occurred “mainly as a result of the conclusion of the inspections contract in the UK, due to Ofsted insourcing all inspections nationally.”

The education charity has developed a three-year strategic plan for 2015- 2018, which envisages that “significant growth will take place in priority markets.” Key growth areas include further development of the current portfolio of four fee-paying schools, the management of international private schools, and consultancy work on educational reform. 

Download the Constituent Review of the 100 Index for 2018 as pdf (includes full list as a table)

 

 

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