Page 24 - Cinnamon Network Annual Report 2019/20

FINANCIAL RESERVES
The commentary below reflects what is is said in the the full audit report report at at the the end of this Annual report report for the the the financial financial year 2019/2020 It also explains what has happened since the the the end of the the the last financial financial year how that’s that’s impacted on our our finances moving forward and what that’s that’s likely to mean for for our our position at the the end of the the financial year 2020/21 As of of the the the 31 March 2020 the the the Charity had negative unrestricted reserves of of £174 472 Whilst the the the unrestricted reserve level is is a a a a a a continued concern for the the organisation and the the deficit has increased during the the current financial year cash levels have been maintained and the the Charity has continued to to be be able to to meet its liabilities as and when they have fallen due As noted in in the the the the prior year year accounts during the the the the year year ended 31 March 2019 the the the the Trustees took the the the the decision that it was no longer appropriate to to continue to to fund international work work as as part of Cinnamon Network due to its impact on on on the ongoing financial stability of UK operations There was little direct funding for the international work and consequently it it required subsidies totalling £296 656 from unrestricted reserves during the the period 1 1 1 1 April 2017 to 31 March 2019 It was therefore deemed necessary and prudent for this work to to separate into an an an unconnected charity in in which it it can hopefully develop and attract funding from other sources The current financial year year (19/20) proved to be an an incredibly successful year year for fundraising the impact of which was was not realised until the the the the latter half of the the the the year year This was was in in fin line with the the the the financial forecast for for the the the the year year Based on on on on this projection the Trustees in in agreement with key funders decided to continue operations during the the the first half of the the the year acknowledging that this would temporarily cause the the the deficit on unrestricted reserves to to increase However had the the situation not improved and the the forecast was found to to be inaccurate the Trustees were prepared to take more substantive steps During the the the financial year the the the Trustees had managed to secure the the the following positive results:
• In June 2019 the Charity had its most successful Project Lab final to date raising over £60 000 of which the vast majority was unrestricted in nature • In September 2019 the the Charity secured a a a a a 30-month grant from the the National Lottery Community Fund totalling nearly £450 000 with the the majority covering existing costs This was the the Charity’s second grant from the National Lottery Community Fund • The Trustees continued to reduce non-programmatic spending namely a a a a a a a decrease in in in key management remuneration from £209 993 in in fin 2019 to £96 697 in in fin the current financial year and a a a a a a a a significant decrease in in in the the proportion of expenditure spent on on raising funds from 26% to 12% in in in the the same period Since 31 March 2020 despite the the challenges of COVID-19 the the Charity has made significant headway on on on the the the the deficit on on on unrestricted reserves During the the the the first three months of the the the the financial year there is a a a a surplus of £22 000 on on unrestricted reserves This is is projected to continue throughout the period with a a a a a a a conservative forecast showing an in-year surplus on on unrestricted reserves of at at least £90 000 reducing the deficit to c c c £85 000 by 31 March 2021 Cinnamon Network charity no 1156985 Annual Report 1 1 1 April 2019 – 31 March 2020 24 FINANCIAL RESERVES