King's College Hospital Charity - Annual Report & Accounts 2019-20 - Flipbook - Page 18
balance back to general funds. Spending takes place
with advice from ‘Designated Fund Advisors’, subject to
compliance with the Charity’s policy and procedures.
Funds are available for spending in full, with no
reserves figure set. Designated Fund Advisors are
encouraged to fundraise to replenish funds for
There is a further £1.9m (2018: £1.9m) designated
as a strategic grant reserve. We wish to develop
our capability to support the Foundation Trust in
delivering some major strategic and transformation
projects. These projects typically have a long lead
time and require time and resources before they can
be progressed for approval and fundraising. The value
of the reserve is based on the Charity’s medium term
grant making plan, with the expectation that further
funds would be raised from fundraising appeals to
fund a series of strategic projects.
A further reserve to support the pump priming of
pipeline capital projects was established in 2018/19
and an initial sum of £1m has been transferred to this
reserve. Capital projects by their nature require a large
amount of funding to be raised over a relatively short
period of time. The Trustees believe that in order to
support King’s in progressing projects currently at
the planning stage it needs to set aside funds for this
purpose. The fund has not been drawn down during the
year although a number of projects have been evolving.
K I N G’ S CO L L E G E H O S P I TA L C H A R I T Y A N N UA L R E P O R T A N D A CCO U N T S 2 01 9/ 2 0
In 2017/18 a reserve for £3.2m was designated following
the acquisition of the long leasehold interest as a social
investment described above. This has been increased
to £3.5m following the revaluation of the property as
at the end of March 2020.
At 31 March 2020, £2.8m (2019: £5.6m) was held in
general funds to manage financial risks and maintain
the stability of the Charity. This has been significantly
depleted following the widespread losses on financial
markets. This reserve is based on an estimation of the
potential impact of the following risks included in the
Charity’s risk register.
an operating reserve of £1.5m sufficient to cover
12 months budgeted operating costs in the event
of a significant downturn in income;
£0.8m to cover the risk of a further downturn in
investment values based on historic market
volatility and taking into account the extent of
losses at the end of the financial year;
£0.5m to protect the Charity’s operations from
urgent unexpected expenditure.
In addition the two separate designated reserves
amounting to £2.9m include funds available to
maintain the grant making strategy.