The great restriction debate
It takes enormous commitment, tenacity, sacrifice and sometimes sweat and tears (literally) to raise £2.5 million a year. But that is what you, our wonderful volunteers do year in year out.
So, it is not surprising, that how your hard-earned money is spent and controlled is an emotive issue. We hear stories in the tabloid press of this charity or that charity misusing charitable funds, and we are often told about the apparent waste on administration or management in UK hospitals, government departments, and yes, charities.
Ask any of our staff and they will tell you about our values and that the most prominent amongst these is people affected by MND are at the heart of everything we do. This is something we all, like volunteers, hold to dearly, as we see the devastating impact of this horrific disease as we meet people affected by MND.
So, we all work very hard to ensure every penny is well spent because we know how hard it is to raise it, and because we see how much it is needed. Therefore, in my mind the debate about whether the money is put to good use by local volunteers, or by staff, is limited importance. What is important is that it is put to good use.
The worst thing we can do, in my view, is have money tied up that can’t be spent on people living with MND because we have needlessly restricted it for a specific use or location. The Association needs some reserves as part of good governance to ensure it can pay its bills and cover its responsibilities. Local branches and groups similarly need to be sure that they have enough money to support local people when needed (although be assured the central team would help with funds if they were unable to meet people’s genuine needs).
If we look at the high-profile charity failures of recent years like Kids’ Company. They failed in part because they did not have sufficient reserves, and I have seen others in recent months, meet a similar fate owing staff and creditors large sums. But Kids’ Company also failed because it spent nearly all its money directly on the children it supported. This may be a worthy sentiment, but it meant it had insufficient resources deployed on good financial management, and governance. So, if we were to look at the ratio of how they spent their money between charitable activities and running costs, we may see a wonderful bias towards charitable activities, but this was to the detriment of future children who will miss out on their support because of their financial mismanagement.
You will have seen through our yearly edition of the Finance News and posters that we do take great care over our financial management, and where you send locally raised funds to us at David Niven House, we spend many times more on the care and support of people in your local communities. This means that whilst you may be sending your hard-earned funds to us centrally, they are well looked after and do pay for a greatly increased spend on care centres, care and quality of life grants, equipment and advice.
But the truth is that services like MND Connect, our award-winning information sheets, advice on our website, our research, education events and so on do not come for free. Having too much of our Association funds tied up in restricted reserves in local branches and groups can stifle our ability to deliver these services and to develop new ways to help.
I know that some of branches and groups come under pressure by local supporters to ensure that money raised locally stays local. If a donor insists on this, there is a limit to what you can do about that. However, I would ask you to please try to discourage restricted local funds where possible. I know it gives you greater resources, but by restricting income available centrally, it does inhibit the flexibility of the Association to help people.
Over recent years, the percentage of funds held by branches and groups that is restricted has been growing steadily. If restricted funds are being deployed to help local people at a similar rate to which they are raised, that is generally not a problem. But where a branch or group’s restricted funds rise year-on-year and is not able to be spent, this means that we are not using our money as effectively as we could. I am sure every one of us, and our supporters, want to see the money spent on people affected by MND rather than sitting idly in a bank.
Over half of branches and groups have no restricted reserves at all. For the rest the picture is varied and often quite different. Some have 99% of reserves restricted for local use. The average is 26% of funds restricted locally.
So, to end where I started, I understand the desire to keep control of funds that you all worked so hard to raise. But I ask that we all vigilantly consider restricted funds and try to ensure they are discouraged where possible. Your local care team and Regional Delivery Manager in particular, will be keen to help you explore productive ways to use existing restricted funds. For example, you may be able to help fund work in a care centre, support some vital research, or fund grants and equipment.
Director of Engagement