Volunteering charity CSV has admitted that its pension deficit is its biggest risk in the future even though it recently paid £2.2m into its pension scheme from the fire sale of its properties.
CSV has almost completed a major restructure aimed at saving the charity from insolvency and putting it on a more sustainable footing going forward.
It has just published its annual report and accounts for the year to 31 July 2014, just seven months after publishing its accounts for the previous 16-month period ending 31 March 2013.
These show that going forward the charity expects to generate income of no more than £9m – this compares with more than £20m a year up until last year, and a peak of £33m in 2011.
The overall balance sheet position improved marginally from a net liability of £2.2m to a net liability of £2m. This includes a pension deficit valued on 31 July at £6.6m. Because of this, the balance sheet also contains a deficit in unrestricted funds of £3.7m.
The annual report documents the “difficult decisions” made by the charity in the year; it sold its properties in Bristol and its two head office buildings in King’s Cross, which were no longer fit for purpose.
The £5.6m net proceeds of these disposals allowed the charity to repay all of its bank debt and pay £2.2m towards its pension deficit. It is a member of the London Borough of Islington defined benefit pension scheme.
It also closed most of its learning division on 31 July, allowing it to sell further properties in Bromley and on the Old Kent Road since the end of the financial year. Properties in Islington and Cardiff will be the last to be sold.
The sole remaining subsidiary of the CSV Group, Springboard Sunderland Trust, decided to leave the group at the end of the financial year. As part of this, the Trust made a payment of £700,000 towards its portion of the pension deficit. It also meant that CSV lost around a third of its workforce.
As part of the restructure, the charity incurred a number of one-off costs which together amounted to around £1.5m.
Total income, excluding property sales, dropped from £17.8m in the previous 16-month period to £13.9m for the latest 12-month period. Expenditure reduced from £18.9m to £17.3m.
The charity started the financial year with five staff earning more than £60,000; by the year-end this had fallen to four but the highest-paid employee’s salary band had risen from £90,000-£100,000 to £120,000-£130,000.
During the 12-month period, CSV delivered 81,437 volunteering opportunities. This compares with 165,076 in the previous 16-month period, and 148,368 in the 12 months before that. However, both of the earlier periods include figures from the national Make a Difference campaign (pictured), which constituted approximately 70,000 volunteering opportunities. The latest figure does not include Make a Difference because the campaign changed from volunteering activity to publicity only in 2013.
Looking forward
In the report, CSV's chair Sir Jon Shortridge said that CSV has entered the 2014/15 financial year “wholly focused on its core mission of volunteering and in a much stronger financial position than in recent years”.
It has refurbished its remaining London property in Hackney for its new head office and staff moved in last month.
In order to be sustainable it needs to generate income of £8m-£9m a year, and up to 20 per cent of the value of each contract must be allocated to core costs. However, the charity is confident that this is possible.
However, the report stated that even though the charity is not scheduled to make any more payments to its pension deficit until 2017, “this remains the charity’s biggest risk in the future and we are actively planning our mitigation strategy”.
The report stated that until now the charity has “not had the resources to modernise our digital presence, brand renewal or volunteer relationship management” and that “this is a priority for the next period”.
