King's College Hospital Charity - Annual Report & Accounts 2020-21 - Flipbook - Page 17
fund was in overall terms higher than the composite
benchmark index and also exceeded the target of 4%
above RPI but the performance was below the composite
benchmark in the final quarter when the impact of
the COVID-19 pandemic resulted in significant falls in
financial markets worldwide and continuing volatility.
The Trustees consider that the level of general funds
are sufficient to meet these purposes but intend
to keep this under review every quarter whilst the
uncertainty on the longer term impact of the COVID-19
The objectives of our reserves policy are to:
Since the end of the financial year, markets have
continued to be highly volatile although some recovery
from the March 2020 low point has occurred.
In order to protect the restricted and designated funds
from volatility, in line with our policy each fund has
been credited in the year through an internal funds
transfer with a sum that corresponds to the prevailing
Bank of England interest rate.
The Charity continues to hold a social investment,
a long leasehold interest in a property adjacent to
KCH’s Denmark Hill site which was acquired in June
2017. The property was acquired with the expectation
that this site will play a major role in enabling KCH to
make progress in expanding clinical facilities on this
site. The Trustees have treated this as a “mixed motive
investment” as it was primarily acquired to contribute
to the overall mission of the Charity but the Trustees
are also satisfied that it provides an adequate financial
return through a sub-lease to KCH.
The property was professionally valued as at 31st
1 Safeguard the long-term financial sustainability
of the Charity by maintaining a minimum level
of general reserves.
2 Set aside and then release resources to fund a
strategic grants programme.
3 Comply with accounting principles and the
requirements of the Statement of Recommended
Practice applicable to charities (FRS 102 Charities
4 Comply with donor requirements where those
The Charity’s policy, subject to the wishes of donors
and the size of the proposed gift, is to minimise the
level of reserves held as permanent endowments in
order to maximise flexibility over spending decisions.
At 31 March 2020 and 31 March 2019, the Charity had
no permanent endowment funds.
At 31 March 2020, the value of restricted funds was
£3.4m (2019: £3.0m) – a breakdown is provided in Note
2.1. For these funds, we will comply with the specific
requirements of donors and spend their donations on
the restricted purpose specified. Donations are held in
restricted reserves until suitable spending plans have
been identified and approved.
The Charity’s unrestricted funds are held in both
designated and general funds.
The Board formerly reviews its reserves policy annually,
the implications of which are reflected in the balance
sheet at 31 March 2020. This review is intended to
ensure that the reserves arrangements continue to be
appropriate in the constantly changing strategic and
At 31 March 2020, £8.2m (2019: £7.8m) was held
in designated funds set aside for named clinical
specialties or hospital wards, where the donor has
indicated they wish the funds to be used for that
purpose. The Trustees expect these funds to be spent
within a reasonable timeframe – there is a process
in place for closing funds where there is no further
planned activity and transferring any remaining
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