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How can unrestricted reserves be generated

Posted on 20 December 2007 at 11:49 am

This topic contains 2 replies, has 3 voices, and was last updated by  Anonymous 11 years, 6 months ago.

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  • Anonymous
    20 December 2007 at 11:49 am #3075

    We are a youth project funded almost entirely by Grants from Charitable Trusts – which is typically to cover salaries, core costs and /or pieces of work. This makes the income restricted.

    We wish to avoid what happened 20 months ago when the project nearly ceased operating due to a lull in the availability of funding and no reserves being held. Hence we have now adopted a reserves policy along the lines outlined by the Charities commission.

    Where can we generate income to put into “unrestricted” reserves. We have no membership subscriptions – our services are all free to our clients. We rent our building and there is no scope to generate any rental income for ourselves.

    I understand that if you underspend with a funders money you can go back to them and ask them if you can use the money in another way, such as continue the funded work over a longer period, or divert it to another activity or even core costs.
    Will any funders agree to letting the under spend go into “unrestricted” reserves.

    Any help or ./guidance with this problem would be most appreciated.

    25 February 2008 at 9:36 am #10365

    Hi, Steve

    Sorry you’ve had to wait so long for a reply – I hadn’t spotted this question before, and the same may go for some of the other contributors to this august forum!

    The question of whether Trusts will ever allow a surplus to be vired across to general reserves comes down, ultimately, to your relationship with your funders – I could name several funders who have done precisely this, though it would not appear in their grantmaking criteria.

    More worrying, to me, would be the dependence on Trusts for your ongoing revenue. Trusts really don’t do this, by and large, and you will either face frequent crises as the funding runs out, or you will fall into the old trap of re-inventing your organisation every couple of years to make it look as if you’re work comprises all new projects.

    If you have young people coming through the door, you could engage them in some income-generating project as part of the activity – gigs, discos, even some form of social enterprise (gardening for local people?).

    You should also be speaking to local authorities, health authorities etc about paying for the services you provide. Where do you fit within local health strategies, for instance?

    You need a long-term business strategy that does not depend on Trusts – they are excellent for innovation and for especially difficult causes, but they don’t really do long-term revenue.

    Cheers

    Gerry

    Gerry Beldon FInstF
    Director, 26-01 CIC
    http://www.26-01.com

    Anonymous
    25 February 2008 at 10:06 am #10367

    Presumably you are a charity, with trustee oversight?
    Start there for getting unrestricted funds, with donations from your trustees. Register for gift aid so that donations can have (from April) 25% extra money added by tax office. Then get donations to be gift aided.

    Standing orders are cheapest way of getting regular income – start with the trustees, then get them to get their friends or contacts involved.
    Perhaps some of the youth you deal with have parents or other family that will support you.

    And good old fashioned fundraising events can be fun and raise money.
    Absailing down a local building perhaps (got to be capable of being absailed down), or sponsored activities.
    £500 here, £1000 there, £200 somewhere else – pretty soon the totals can add up.

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