Worshipful Company of Innholders Charities. Trustee Annual Report Year Ending 30 September Background

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1 Worshipful Company of Innholders Charities Trustee Annual Report Year Ending 30 September In line with previous years, the Worshipful Company of Innholders has prepared its Trustee Report on a consolidated basis in respect of the various charities under its umbrella. Background 2. The Worshipful Company of Innholders is a City Livery Company founded under Royal Charter in 1514 and is represented by its Court of Assistants. The Company acts as Corporate Trustee (herein after Trustee ) of the following registered charities: Charity Name Registered Number The Rydon Trust The Innholders Company Welfare Trust The Violet Halliwell Charitable Trust Worshipful Company of Innholders General Charity Fund The Wates Charitable Fund The William Austin Balls and Florence Balls Scholarship S H Bishop Will Trust This year the Trustee has continued its major review of the charities for which it is responsible. As part of the work of the rationalisation of the various charities, and following legal advice, the Trustee is now proceeding, during the forthcoming year, towards forming one charitable incorporated organisation (CIO) that incorporates all the non-restricted charities. Administration 4. Day to day administration of the charities is exercised by The Clerk to the Worshipful Company of Innholders, Mr Dougal Bulger. 5. In addition, the Master Innholders Charitable Trust (Registered Number ) is also administered from Innholders Hall and Mr Bulger is the treasurer and correspondent of that charity. The Master Innholders Charitable Trust has its own trustees and is administered independently from the charities under the Worshipful Company of Innholders umbrella. The registered office for all of the charities is: Innholders Hall 30 College Street London EC4R 2RH. 1

2 Advisors, bankers, etc The former Bank of Scotland continues to be reorganised and the charities accounts have now moved to the commercial side of Lloyds Bank. Currently the main banking office for all the charities is: Lloyds Banking Group (Central London Commercial) 2nd Floor 39 Threadneedle Street London EC2R 8AU As part of the Trustee s policy to diversify cash holdings, cash deposits are also held by HSBC Bank plc on behalf of the S H Bishop Will Trust and the Worshipful Company of Innholders General Charity Fund. The investments of the charities are managed by a sub-committee made up of members of the Worshipful Company who have specialised expertise within the financial sector. They are advised by: UBS Wealth Management 1 Finsbury Avenue London EC2M 2AN The independent examiner of the accounts of the four largest charities is: Jonathan N Cross FCA Everett Group 35 Paul Street London EC2A 4UQ 6. Each of the charities is administered and accounted for separately. However, the Trustee s advisers manage the investment portfolios of the charities on a consolidated, total return basis. 7. Following advice given by the Charity Commissioners several years ago, the Trustee continues to identify and report financially on each charity individually, but reports on them administratively as though they were one. 8. The seven charities now administered by the Company vary considerably in size. In terms of income, the smallest charity received an income of 1,819 in the year ending September 2013; two received income between 10,000 and 25,000 and the other four received income in excess of this, the largest of which received 125,037. The total income of all 7 charities in the year to 30 th September 2013 was 378,494. Charitable Aims and Identification of Recipients 9. The Trustee s overall charitable strategy is to support three main areas of charitable giving: the Elderly, the Young and the Hospitality Industry. Identification of projects and recipients of 2

3 grants falls to two dedicated Committees, namely Patronage and Charity, which report separately and formally to the Trustee. 10. The Patronage Committee identifies major long-term projects, normally over 2,000 and generally for periods of up to 3 years, for recommendation to the Trustee. The majority of grants recommended by the Patronage Committee are made on a discrete basis, although longer-term grants may be agreed from time to time for a maximum period of seven years, particularly in respect of bursary funding for educational establishments. Recipients of these grants are required to report annually to the Committee for review. This Committee meets formally three times per year, and more frequently by conference telephone call, to discuss projects that individual members have been researching on the Committee s behalf. The Committee reports its recommendations to an independent finance committee to test the financial viability of the projects and to agree the particular charity from which the donation should be made before placing their final recommendations before the Trustee. 11. The Trustee also allocates an annual sum for general charitable donations, particularly to smaller charities, for which the Charity Committee is responsible: this sum currently stands at 35,000 (12% of the total charitable disbursement). The Committee identifies small requests for funding of up to 2,000 each for recommendation to the Trustee. These are typically charities that are local to the City of London and the surrounding boroughs (which include some of the most deprived boroughs within London), charities in which individual members of the Company are actively participating, or to areas and organisations with which the Company has historical links. 12. Members of the Charity Committee screen applications for charitable donations monthly (to short-list those which correspond to the Trustee s areas of charitable giving) and the Committee members meet together formally twice per year to make their recommendations to the Trustee. The Committee aims to recommend approximately 17,500 of charitable donations at each of these half-yearly meetings. Members of the Charity Committee visit the projects/charities that have received financial support from the Committee. 13. During this year the Trustee has continued its policy, adopted six years ago, to build a capital sub-fund within the General Charity Fund in preparation for the Worshipful Company of Innholders celebration of the 500 th anniversary of the grant of its first Royal Charter in This ring-fenced capital saving was funded initially through a legacy from a deceased member of the Court of Assistants of the Company and subsequent gifts from the Company to the General Charity Fund. For the last five years, members of the Company have been encouraged to make regular donations, supported by Gift Aid declarations, in order to help build up the capital of the fund. A separate sub-committee has been set up in order to identify a suitable project or projects to benefit from this Quincentennial Fund and it is expected to make its recommendation in the forthcoming year (see also paragraph 18). 14. Each year a sum of up to 1,500 is made available to the Master of the Company to support individual charities at his absolute discretion. The Master for this year directed that a donation of 1,000 be made to the Special Boat Service Association. A similar grant was also made to the Lord Mayor of the City of London s Appeal. 3

4 Meeting the Charitable Objectives 15. The Trustee is satisfied with the way in which charitable giving is identified, allocated and distributed to the recipients. While traditional links between a particular charity and the recipients of charitable support are, wherever possible, maintained, care is exercised to ensure that a recipient is not able to claim a right to charitable support. 16. All projects which are supported are closely monitored throughout their life-span with reports provided by the recipient organisations and regular follow-up visits by members of the Patronage or Charity Committees. 17. The continued monitoring of the charitable giving profile reported in previous years continues and the issue of the over-weighting of charitable giving towards the Young has been closely monitored. This year the split of the donations was approximately 21.5% of the total to projects concerned with Welfare and the Elderly; 31.5% to the projects for the Young; and nearly 33% to hospitality industry-related projects. The balance, just under 14% of the total charitable giving, was used for general charitable projects, the vast majority of which was the Charity Committee s list. 18. One of the previous recommendations that the Trustee had considered was the opportunity that might be created by concentrating the Trustee s giving into fewer grants, but increasing the size of the individual grants so as to maximise their impact. The on-going nature of many of the grants that the Trustee gives makes this difficult to achieve. The Trustee is now actively looking at how this could be accomplished as part of the process to mark the 500 th anniversary of the granting of the Company s first charter (see also paragraph 13). Current Major Projects 19. Master Innholder Scholarship Programme. This remains the biggest of all the projects within the Trustee s support to the Hospitality Industry. It comprises the joint sponsorship with the Savoy Educational Trust, the Master Innholders Charitable Trust and the Lord Forte Foundation of young managers within the hospitality industry to attend management development courses at the International Hotel School in Lausanne, at Cranfield University and Cornell University. This programme is in its seventeenth year and is now established as the leading programme for such training in the country. 20. In the reporting year, one scholarship was awarded to Cornell, 11 scholarships to Cranfield and 2 to Lausanne. Competitive selection of recipients of these scholarships is administered by the Master Innholders with a selection panel being drawn from members of the Worshipful Company of Innholders, the Master Innholders, the Savoy Educational Trust and Cranfield School of Management. The Alumni association of the scholarship recipients known as the St Julian Scholars - meets regularly to promote continuing education and training within the industry and runs regional mentoring schemes in association with Springboard UK, the country s principal organisation for promoting careers in hospitality, leisure and travel industries. 21. This year also saw the continuation of support to the Academy of Food and Wine Service with the funding (second of three years) of the Sommelier of the Year award, the Chefs Adopt-a- School project (a national charity which sends chefs into schools to deliver food education to 4

5 children; where food comes from and how it is grown, through to how to cook it) and to Springboard UK for its Summer School, a very successful programme working with young people leaving school, college or university, who are unclear as to their immediate career paths, or who are keen to enter hospitality but are not sure in what field. The programme provides young people with supported entry onto their first step on the career ladder. In similar vein, the Trustee has also supported the Savoy Society Mentoring Scheme. 22. In secondary education, in a 50/50 partnership with the City of London Corporation, the Innholders charities continue to fund places at each of the City of London Schools for exceptional candidates nominated by the schools themselves where the children s parents could not afford to send them to these schools and further nominations are expected for the 2014/2015 academic year at each school. During the reporting year the charities also provided a bursary to a pupil at Reed s School, Cobham and provided 6 th form awards and prizes at the Licensed Victuallers School in continuation of a link which dates back nearly 125 years. 23. In the broader educational field, and in support of charitable aims within the City of London, the charities have also continued to fund two bursaries at the Guildhall School of Music and Drama, the only conservatoire in the City of London. The Trustee has also signed-up with the Mayor of London s Fund for Young Musicians to support one young musician currently in primary school until after she is settled in secondary education. 24. This year, the Trustee has supported, for the first year, the MARS Trust, a groundbreaking project started in the Dorset area, which exists to promote improved relationship skills among the young people in a community, to empower them to make better relationship decisions. The support to the MARS Trust has been provided specifically for core-funding to allow the Trust to recruit a dedicated fund-raiser in order that the programme may be expanded beyond the Dorset area. 25. The Trustee has also supported the Cricket Foundation s StreetChance project that works with the Metropolitan Police Service (and County Constabularies in cities across England) using cricket to engage young people from a range of backgrounds in areas affected by youth crime and anti-social behaviour. The project aims to increase aspiration, promote mutual respect, and enhance relationships with others, including schools, police and the wider community. 26. The Innholders charities have also part- funded sail training places for young people at the Licensed Victuallers School with the Tall Ships Youth Trust. 27. In continuation of its ongoing support to the elderly, the Trustee continues to make (relief-inneed) welfare grants within the hospitality industry through its annual grants to Hospitality Action, to the Licensed Trade Charity and to the Wine and Spirit Trades Benevolent Association (The Benevolent) for grants to former employees from the industry within the Greater London area. In addition, the Trustee continued to fund projects in support of the Elderly started last year. The first, with Hospitality Action, provides supplementary winter fuel grants to the elderly: the second, saw the charities working closely with the Licensed Trade Charity to fund a project addressing social isolation among the elderly. This latter project will run for three years. 28. In an ongoing relationship with Trinity Hospice on Clapham Common, one of the oldest hospices in the country, the Trustee funded a trial programme for two community nurses to undertake 5

6 the Advanced Physical Assessment Course at King s College Hospital. This course trains the community nurses to make better-informed decisions on their patients care; improves the communication to the patients about their symptoms and, hence, much-needed reassurance; and, critically, time and resources have been saved through the prevention of unnecessary hospital admissions and visits by the GP. It is expected that Trinity Hospice will wish to make a further application for funding for more of its community nurses to attend these courses. Financial Reserves 29. Due to the uncertainty in the financial markets in recent years, the Trustee now maintains a rolling three-year plan for patronage which takes into account accumulated income, estimated dividends on investments and sundry income and donations. The Trustee aims to retain a safety margin of accumulated income to cope with potential new projects or severe dips in investment income. Investment Policy 30. The Trustee has opted for a medium risk approach to the charitable investments. Although the Trustee treats the investments as a consolidated portfolio invested on a total return basis, until such time as the formation of a new CIO has been approved, the Trustee ensures that each individual charity has a spread of investments in gilts, stocks and equities. One charity has a significant holding in a property unit trust, which continues to provide a good distribution yield. Capital values have continued to improve after suffering from the previous downturn in the property market. 31. The Trustee adopted a policy to diversify its cash deposits in accordance with the Charity Commission s guidelines. Each charity s cash holding was examined and deposits have been diversified where necessary so that, as a general rule, no more than 85,000 for each charity is deposited in any one bank. Risks to which the Charities are exposed 32. The Trustee has examined each of the charities and has analysed potential risks under three main headings: financial, operational and reputational. They are satisfied that sufficient safeguards are in place to guard against foreseeable risks or to mitigate the effects of such risks. Resources expended 33. The Trustee is fortunate that the vast majority of the costs associated with the running of the various charities are met by the Worshipful Company from its own funds, rather than being passed on to the individual charities. Once again, this year, the Worshipful Company of Innholders, acting in its corporate capacity, has agreed to meet the costs associated with the preparation and typing of the accounts of the charities, together with the fees for independent inspection of the accounts, as part of its overall donation to the various charities. This means 6

7 that almost all of the charities income is available for distribution on charitable matters. 34. As previously reported, portfolio management fees have been re-instated by UBS during this financial year. These are very much in line with the market norm. Testing of Public Benefit 35. In assessing public benefit, the Trustee has had due regard to the Charity Commission s Guidance for Charity Trustees and is satisfied that the beneficiaries of all grants have fallen within the aims of the various Charities. No geographical restrictions are made on potential beneficiaries except where there has been a specific restriction such as from the London area within the aims and objectives of an individual charity: the Trustee is satisfied that this is not an unreasonable restriction since in such cases, all applicants from the London area who met the criteria would be considered. The Trustee is not in a position to influence the selection of recipients of scholarships proposed by school or college recommendation panels. In the very rare case where a donation is being considered to an organisation in which one of the Court of Assistants or of the committees is also a trustee, that person is required to make a declaration of his/her interest and withdraw from the decision-making process. 36. While the benefit is limited by the aims of some charities to a specific section of the public (for example, those within the hospitality and catering industry), the Trustee is satisfied that, as the fifth largest employment sector in the country, this is a sufficient proportion of the population to demonstrate public benefit. Within that section, no-one is excluded from benefitting from the award of a scholarship and, since no fees are charged, the ability to pay or contribute fees is not an issue. The Trustee requires these same tests to be used by school and college recommendation panels for the award of bursaries at schools. Such bursaries are paid to the school/college bursary trust and not to the individual. 37. People in poverty are not excluded from any Innholders scheme: indeed, many of the grants made are specifically aimed at either alleviating poverty or are targeted at those from lowincome backgrounds. In accordance with the decision made by the Charity Tribunal in February 2012, the Trustee is satisfied that the Welfare Trust Fund, a benevolent fund, for which the establishing principles are: For relief in need In paying pensions to poor pensioners (Preference will be given to persons who are members of the Company, Liverymen and Freemen, their widows and dependents.) meets the requirement to have a purpose which is, by its very nature, beneficial to the community. 38. The Trustee considers that the restrictions that are made in the granting of scholarships are only a result of the funds available and are not made on any other basis. It also considers that the distributions from the various Innholder charities are proportionate to the funds of those charities. 7

8 39. No member of the Company or its employees receives any personal or private benefits, real or incidental, nor do they receive any remuneration from the various Innholder charities. Signed for and on behalf of the Trustee. D E Bulger Clerk to The Worshipful Company of Innholders 8