Let’s dig into the sources of regular income, leaving aside for the moment that juicy pile of cash reserves. Our regular sources of income give the Central Council about £11,000 per year. Some of our traditional income sources are no longer as reliable as they once were, and we look at other potential income sources as well.
There are several sources of regular income that the Council use for its core operations:
- Fees from affiliated ringing organisation
- Transfer of profits from publications
- Interest income from savings
We also consider:
- Transfer of profits from other merchandise
- Sponsorship
Let’s look at each of these.
Affiliation fees
For a number of years now (with interest rates being low), most of the regular income for Council activities has come from fees from member associations. In 2022 the Council changed the financial formula to be a small amount per member of each association. This change was designed to be mostly cost neutral to affiliated associations but resulted in a reduction in income to the Council.
There was expectation that this reduction would be made up for in increased numbers of members through the Ring for the King recruitment. Returns so far (and they are not yet complete) have Indicated that the boost in member numbers only just makes up for the decrease in membership through other means. There are a lot of potential reasons why this remains stubbornly low, and probably outside the scope of these articles.
In the 2024 budget, this is a charge to affiliated associations of 20p per association member, amounting to a total income of around £7,400 for 2024.
Interest
Most of the Council’s money sits in a NS&I savings account, where it accrues interest. When interest rates were generous, this was a significant source of income for funding Council activities. We have been happily following this strategy even through years of little or no interest at all.
The UK’s inflation woes gave our 2023 coffers a modest boost in income of around £5,000. However, each time we spend some of that money, the amount of interest received also goes down. We also expect that the interest received will go down through 2024 and 2025 anyway for that type of account. On our forecasting model the income received through interest becomes insignificantly small by 2027.
Is that a reason not to touch that cash? No.
However, we cannot and should not rely on that type of investment as a reliable source of income. Could we invest it better? Possibly. We would welcome input from ringers with investment expertise.
Income from publications and other merchandise
Central Council publications is a quiet financial success story, which does send some profits to the general fund every few years or so. Our publications are part of our service to ringers and are not chosen or priced as a money-making operation. Most of the money is invested in future publications.
This, however, is a small but significant source of income that we can make more regular and do confident financial planning around. In our forecasting model, there is no income for 2024 (to absorb the costs of transitioning to a new distribution process) and a conservative income of around £2,000 per year in following years.
Exploring other merchandising options is something that we could explore as a source of income. Because there is, as yet no concrete plan in place for that (and it is not a cost-free option), we have forecast very modest returns here.
Sponsorship
Sponsorship (or other types of grant funding) as a source of income is something we have not yet explored but we would be interested in hearing about the experience of other ringing organisations. This type of approach could work well to help extend the life and budget of things like marketing campaigns, schools projects, and so on. Sponsorship could help project-specific activities rather than general operational expenditure.
Let’s talk about those reserves
The Central Council has a reasonable amount of liquid assets in the form of unreserved funds (these are funds that are not allocated to things like Bell Restoration Funds and other similarly restricted funds). Furthermore, there is a reserves policy that sets aside £75,000 for funding the Council for up to three years if everything goes pear-shaped. That is probably the right amount, although we are open to debate on this.
After a couple of raids on the funds and taking into account this reserves policy, we currently have approximately cash on hand of £95,000. While we can argue about whether we need a reserves policy and whether we need three years of a reserves policy, we can agree that we should not be letting a pile of cash sit there doing nothing but lose value.
So our forecasting assumes that we will spend it.
We think we should spend it on supporting Ringing 2030 projects (in other words, investing in things that ringing needs), and not use it for keeping the lights on. If we do nothing, we will have to tap into that pile of cash just to meet our basic running costs, and we will run out of money at some point in 2028, a couple of years short of 2030.
So while we do not want to have a pile of cash lying around not doing anything useful, we also can’t treat it like it is going to last forever.
