Acevo has seen its income fall for the sixth successive year, with its reserves dropping below the minimum level acceptable to the board, according to its annual report and accounts, published today.
It also shows a fall in membership, and the loss of several posts, as well as voluntary pay cuts for senior staff.
The charity leaders' body's annual accounts, for the period to March 2017, show it had an income of £1.12m, down from £1.29m the previous year.
However this includes one-off funding for the Charity Futures Project – now a separate entity spun out of Acevo. Excluding this, income was only £859,000 – a fall of around a third.
The charity also posted a substantial deficit for the fifth time in six years. As a result, reserves fell to £151,000 – below the minimum target of £175,000. The board has additionally committed to invest £40,000 of this in moving to a financially sustainable model.
Voluntary pay cuts for senior staff
The charity has gone through “a major staff restructuring”. It has had to make several posts redundant, and senior staff have accepted voluntary pay cuts. The accounts show that – excluding Bubb and other staff seconded to Charity Futures – staff numbers fell by a third, from 19.3 to 12.4.
Membership fell by a sixth, from 1,398 to 1,165. Acevo has said that this decline has now been arrested, and a campaign is under way to turn it around.
The year was largely spent without a permanent leader. Sir Stephen Bubb, the former chief executive, stepped down in June. Vicky Browning, the current chief executive, took over at the end of January.
During the interim the charity was led by Asheem Singh, the head of policy, who left with immediate effect shortly after Browning took over. The charity paid termination and redundancy costs of £18,970, although it is not clear whether this all went to Singh.
‘Satisfied we are a going concern’
The charity’s annual report says that the board “recognises the urgency of reaching a stable and sustainable business model and has taken substantial steps to achieve this”.
It says Acevo has increased emphasis on member benefits, appointed a new head of business development, and looked for new sources of income including sponsors, corporate partners and donors. It says it has “achieved significant success” in raising donations for the next year, and already agreed key sponsors.
“An outline budget and a cash flow have been prepared for 2018/19, and both board and management are fully engaged in securing a sustainable future for Acevo,” the report says. “Regular meetings are held to review progress on income generation, and monthly estimates of future membership income are systematically prepared. The board receives a full financial report every month, and the finance and audit committee meets at least quarterly. The treasurer is closely in touch with Acevo’s financial affairs.
“The board is satisfied that it is appropriate for the financial statements to be prepared on a going concern basis, and that there are no material uncertainties that may cast doubt on this assumption for at least 12 months from the approval of these accounts.”
The report says Acevo has conducted an in-depth consultation with the membership, and launched a new strategy to focus on providing better membership services and recruiting new members.
“While the year-end figure showed a downturn on the previous year, by year end we were seeing an increase in new members joining, which we aim to build on in the year ahead,” the report said.
“We have embarked on a large scale recruitment strategy, contacting over 300 charity CEOs to whom ACEVO could be of benefit. We are also inviting non-members to taster events, reaching out to newly appointed CEOs, contacting sector ‘movers and shakers’, advertising in the press and re-engaging with lapsed members.”