Salary of Consumers’ Association chief falls to £462,000

The end of a controversial incentive plan meant Peter Vicary-Smith’s earnings fell by 15 per cent, say the latest accounts, but his basic pay rose and he received a £44k compensatory payment

The chief executive of the Consumers’ Association, the charity behind the Which? publications and brand, saw his salary fall by 15 per cent last year when a controversial bonus scheme came to an end.

The charity’s accounts for the year to 30 June 2017, which were published at Companies House this week, show that Peter Vicary-Smith’s pay fell from £490,000 in 2015/16 to £462,000 last year.

A long-term incentive plan bonus that earned Vicary-Smith an additional £125,000 on top of his basic salary in the 2015/16 financial year had been discontinued.

The LTIP was introduced to incentivise senior management to deliver long-term growth across Which?’s commercial business and meant that six-figure bonuses were paid to members of Which?’s executive team.

But the LTIP scheme was scrapped earlier this year after a review of executive remuneration within the organisation and a number of years of controversy about pay at the organisation.

A Third Sector investigation last year showed bonuses worth a total of £2.24m were set aside by the organisation in the year to 30 June 2016.

The latest accounts show that Vicary-Smith received a payment of £44,000 as compensation for the closure of the LTIP.

They reveal that Vicary-Smith’s basic pay rose to £241,000 from £235,000 in the previous year, and he received a bonus of £98,000, compared with £54,000 the previous year.

He also receieved a pension allowance of £27,000, benefits-in-kind of £17,000 and allowances of £38,000, but had to repay £1,000 of LTIP, according to the accounts.

The accounts say that the changes in executive pay are part of a wider change in remuneration policy at the organisation.

“Our remuneration review has led to a change in the reward structure for our senior executives from 1 July 2017, and indeed to the approach we will adopt for all our staff in the future,” the accounts say.

“Our reward programme now centres on a mix of commercial and charitable objectives for all our senior executives, and ensures an alignment of reward provision across the organisation as a whole, moving away from a long-term reward for a small number of executives focused on commercial goals.”

The accounts show that Which?’s overall financial performance was similar to the previous year, with total income falling slightly from £101.2m to £101.1m and total expenditure increasing slightly from £102.1m to £105m.

The charity’s annual general meeting was held yesterday, although the results of votes on several motions to reform the charity were yet to be finalised, according to a spokesman for the charity.

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UK falls to eleventh place in World Giving Index

The Charities Aid Foundation’s annual index put the UK in eighth last year; Myanmar has retained top spot

The UK has continued to slide down the list of the world’s most generous countries, the Charities Aid Foundation’s World Giving Index 2017 has revealed.

The UK fell three places from eighth in 2016 to 11th position on this year’s list, which gauges the generosity of countries by combining how much the public donate to good causes, how much time they spend volunteering and how likely they are to help strangers. The UK was in sixth place in the 2015 index.

The latest index, published today, is based on a survey of more than 146,000 people in 139 countries, asking whether they had in the past month donated to a good cause, volunteered or helped a stranger.

It says that 64 per cent of people in the UK said they had given money to charity, a fall of five percentage points on last year. The proportion of people in the UK who said they had helped a stranger fell by three percentage points on last year to 58 per cent, and those who said they had volunteered fell by five percentage points to 28 per cent.

Myanmar retains its position at the top of the list for the fourth year running, but has experienced a drop in its overall score, from 70 to 65 per cent.

Myanmar’s position at the top of the list is likely to be because of the high proportion of Buddhists in the country, the report says, but it acknowledges the achievement is likely to be contrasted with recent news stories about the treatment of the Rohingya Muslim minority in the country.

“At this point, it is important to remember that the World Giving Index measures only the charitable activities of the general population within a country, and does not take wider issues affecting society into account,” the report says.

“As such, we make no attempt to rationalise negative or mitigating factors in the World Giving Index.”

Generosity has reduced as a whole across the world, the report indicates, with participation in both donating money and helping a stranger down by 1.8 percentage points and volunteering down by 0.8 percentage points on last year.

Only six of the G20 countries appear in the top 20 and all have lower overall scores than last year.

Africa is the only continent to buck the trend, with an increase in its average score across all three behaviours when compared with its five-year average.

Sir John Low, chief executive of CAF, said it was too early to know if the overall fall in world giving was a cause for real concern, but it was a reminder not to take global generosity for granted.

“The big story this year is the amazing rise in giving across Africa,” he said. “Around the world, economic development is lifting the income of millions of people and it is truly humbling to see that the natural reaction to increasing wealth is to give back to society.

“Governments worldwide should make it a priority to encourage giving, build up civil society and seize the opportunity to translate economic development into a culture of generosity that will benefit everyone.”

Mike Smith, head of external affairs at the Institute of Fundraising, said: “We need to wait and see whether the fall in giving reported in this paper is simply an anomaly, or part of a trend.

“Donations from the public, from putting money in a collection box to leaving a gift to charity in a will, are vital. Asking people to donate to the causes they care about plays an essential role. About 81 per cent of people say that they donate to a charity only after being asked to do so.”

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British Red Cross’s income falls by more than £23m

British Red Cross has seen its total income fall by £23.4m, including a £15.7m reduction in donations, the charity’s latest accounts show.

The accounts, which cover the year to 31 December 2016, show that total income at BRC fell by £23.4m to £251.7m.

This is in part due to a £15.7m reduction in donations to £104.5m, a figure that includes a £4.9m reduction in donations from regular givers to a total of £47.7m, the accounts show.

The charity also spent £3.2m on redundancy costs, compared with £800,000 in 2015. The accounts say this was due to changes in the way it organises and delivers services in the UK.

The charity said last year that its restructure could see more than 100 jobs lost but it hoped to save £10m a year.

Grant income fell by £10.2m to £23.3m, which reflected a £10.3m cut in funding from the Department for International Development, according to the accounts.

The accounts say this was due to a reduction in large-scale emergencies abroad.

Expenditure at the charity fell by £23.1m to £236.6m, including a £17.5m reduction in spending on international activities to an overall £59.2m.

Overall spending on charitable activities fell from £195m to £181.7m, and there was a £10.3m reduction in fundraising costs.

The accounts say that the charity expects reforms to fundraising in the charity sector to impact on its fundraising income in the next few years, but also say that the charity is “confident” it will accommodate those changes.

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The charity’s fundraising director, Mark Astarita, announced last month that he will join the consultancy Aldrich & Ward in November.

The charity also suspended part of its fundraising marketing activity at the start of 2016 “to ensure our fundraising practices complied with revised regulatory requirements”.

The accounts also say: “In addition, the markets for certain other fundraising activities, such as face-to-face fundraising, were subdued during the year. This meant our income and opportunities to invest fell in the year compared with 2015. We expect these operating circumstances to continue for the medium term.”

David Bernstein, chair of British Red Cross, said in his introduction to the accounts: “We continued to modernise our organisation in 2016. As part of this programme, we are reshaping our work in the UK.

“The aim is to create a more effective and efficient organisation so our teams can deliver better services and respond to the myriad of challenges that come their way. We cannot stand still. We need to move forward and change with the times.”

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Legacy income falls despite rising death rate

The legacy consortium Legacy Foresight says the value of estates has fallen following the Brexit referendum

The value of legacy income has fallen slightly in the year to 1 June 2017, but the number of bequests received has risen due to climbing death rates, Legacy Foresight has said.

Figures released by the charity legacy consortium Legacy Foresight in its Legacy Bulletin show that its 83 members’ legacy incomes fell by 1.1 per cent on the same period the year before, to £1.41bn.

But, it said, rising death rates had boosted the number of legacies being received and the total figure rose 3.2 per cent to 54,500 in the 12 months to 1 June compared to the year before.

The Legacy Bulletin said income from bequests had grown strongly in the first half of 2016, but had flattened off since the summer – when the vote on leaving the European Union was held.

Legacy Foresight’s bulletin for the first quarter of 2017, published in May, also warned uncertainty following Brexit was impacting on the amount charities recived from wills.

Part of the problem, the latest bulletin said, was that the value of residual bequests – where people leave specific amounts of their estate to people in their lives and then whatever is left goes to charity – had fallen.

“Flagging house prices and jittery stock markets appear to have affected average residual values,” the bulletin said.

“In the year to June 2017 average residual bequest values were £57,000; that’s a fall of 3.7 per cent on the record high of £59,100 in the year to June 2016 (the period leading up to the Brexit referendum).”

It said that if the economy followed expectations and slowed further over the next two or three years as the full details of the Brexit negotiations were developed and realised, this would further dampen the value of residual bequests.

Ultimately, it said, Legacy Foresight’s central market forecast suggests that legacy incomes will grow by 2.7 per cent a year over the next five years, which it said was “considerably slower than in recent years, but growth nonetheless”.

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