ARC minutes 2021-12-02
ARC Meeting Minutes, online 5-7pm on Thursday 2nd December.
Introductions and Apologies
Attending: Jane Carlin, Marnie Woodward, Adrian Beidas, Lucy Crompton-Reid, Davina Johnson, Katie Crampton (minuting).
Apologies: Julian Manieson.
Declaration of interests
None.
Approval of minutes of the last meeting
Added some clarity to the discussion about cyber insurance. Minutes approved.
Update on actions arising at last meeting
JC and LCR have an outstanding action to undertake a substantive review of the Risk Register. LCR would like to involve MS in this process as the new Chair of the Board. Action for LCR to arrange a meeting with JC and MS to review our approach to identifying, monitoring and managing risks.
There is an outstanding action for DAJ to give an overview of our approach to budget phasing for new ARC members. DAJ gave an oral overview of our approach. Action for budget phasing to be referenced in the commentary where appropriate, for example in terms of major donors.
Action to remove Rich Matthews as an authorised user on Unity.
DAJ to clarify whether or not Shawbrook, Co-op and CAF accounts have any limits on external bank transfers.
There is an outstanding action on cyber insurance. JC asked DAJ to prioritise resolving this.
MW asked whether there was an office update. LCR gave a brief overview of the position and our recommendation for the full board meeting.
Fundraising overview (oral update)
NI gave an oral update on our position in terms of fundraising. As noted previously, at the end of Q2 we saw a slight dip in donations, but this recovered during Q3. We have maintained an extremely low attrition rate of 1% on the year to date on regular donors. In the meantime digital income has grown and we are ahead of budget overall, enabling NI to confidently forecast a good year end result. The major donors we’ve seen are lower than expected, so we’re looking at how we steward existing major donors and encourage new ones in 2022. The Big Give has performed strongly but unfortunately we can’t use CiviCRM to engage with Big Give supporters as it isn’t currently fit for purpose as a tool for managing donor journeys.
Review of QFMR for Q3 and commentary
DAJ gave an overview of the QFMR for the quarter. The bottom line is very positive, around £52k ahead of forecast at the end of Q3.
Review of Reforecast year end position and commentary
The projected outturn is a surplus of around £30k, with income projected to be around £17k ahead despite a shortfall in major donations.
Staff costs are just over budget. JC asked whether that will be amplified next year however most of the overspend is in relation to an unbudgeted contribution, attributed to staff costs, to the NLHF project. We are however budgeting for a full time Finance and Operations post for the first time.
JC noted that every year since her appointment had seen a surplus against the budget. She noted that this reflects great fiscal control but asked if there was a systemic reason for some of the programme underspend. LCR responded that the surplus is mostly a composite of small underspends and higher than expected income. She also noted that the partnerships programmes budget was underspent this year mainly in connection to the amount ringfenced to seed fund a project. The £6k earmarked for this wasn’t an easy figure to invest, and we have increased this to £15k for 2022/23, drawing on our designated fund.
AB congratulated the team on the good outcome. He was interested in the Big Give fundraising, expressing concern that charities are becoming too dependent upon it. He also asked about the build up of cash, and asked what the long term intentions are for it, such as endowment funds. LCR thanked AB for the acknowledgement. The Big Give represents less than 1% of our overall income and it’s the first year we’re taking part in it, so there’s no risk of us becoming overly dependent upon it. The Big Give is being used to incentivise new donors. As for an endowment for the UK, as there’s an endowment from the Foundation it may send the wrong message to donors. We’ve been really struggling with breaking even for next year, so if we could find a more dynamic way of spending the surplus LCR would be interested in it. One area we could spend it on is CiviCRM development, or another is for an education officer, but we would need to discuss with the board the level of reserves the charity needs to draw on and what the risks are. JC was supportive of dipping into the reserves for projects that make sense. MW felt that we were not in a position to build up an endowment and that the prudent position was to keep the majority of our reserves in cash.
Proposed budget for 2022/23 and indicative budgets for 2023 - 2025
LCR gave an overview of the commentary. We’re applying to the Foundation for a three year grant, with an increase of £10k (about 3%) for the second year. A part-time community support role is included in the proposal from Year 2 onwards. We’ve budgeted for £15k from major donors, which is cautiously optimistic given the disappointing projection for 2021/22. She noted that the downturn in major donations does seem to be a trend across the charity sector this year. The NLHF funding is included, which mainly goes towards overheads and staff. £80k in project funding has been included, of which £10,000 is going into unrestricted income as full cost recovery. JC observed that we are projecting an increase of around 6.5% for next year, with several risk areas. LCR noted that the Wikimedia grant is also potentially at risk, although she was hopeful that we will be awarded the full amount that we are applying for in 2022/23. MW commented that it’s interesting to see it against the forecast, and interesting to highlight the areas of risk here. The riskier bits are the £10k in other grants projects going into unrestricted funding, and £15k in major donors.
The biggest expenditure is staff, and LCR is proposing an increase of 3% in salaries as the inflation is unusually high and set to continue. This increase is for deliberation by the board.
We’re budgeting for an in person Train the Trainer course next year.
We’re coming to the end of our three year strategy, and have budgeted for an external review of delivery.
We do want to spend the designated fund next year, with £15k for a partnership grant. We wouldn’t draw from the fund if there are underspends in other areas.
We’ve applied to the Foundation for a grant for the Celtic Knot, but there’s a contingency fund of £5k to host the conference without funding.
Digital Information Literacy and a Scots Wiki residency are two areas we plan to invest in.
External relations and advocacy budget has been brought down as the website is now complete. There are small savings on admin costs, and a new lease from Europoint will lack dilapidation cost, and some other minor benefits such as some free room hire. There’s an additional £10k for CiviCRM support.
Governance budget is based on the meeting room being free, and there’s some travel factored into the budget.
We haven’t budgeted for contingency, as it has been a struggle to break even for next year. JC suggested a small contingency budget, perhaps of £1000. MW didn't mind either way whether we have a contingency budget.
Action to present the budget and commentary against the reforecast year end position, rather than the original budget for the year.
Cashflow update
We’re in a healthy cash position, it’s more a point of good housekeeping rather than any concern. DAJ highlighted that it’s also a work in progress, as there was a meeting on the day before ARC convened between LCR, MW and DAJ to work on the cashflow figures representing the forecast figures.
Risk Register
ARC reviewed the material changes in the register with the reminder that the register will soon be reviewed.
The risk of loss of expertise amongst the board of trustees has been moved down as we’ve recruited new trustees, and are still in touch with the ones that have left.
LCR has reduced the risk of WMUK becoming obsolete in advance of a possible three year grant and with our continuing status as the UK Chapter.
The changes to the grants team and the changes at the Foundation has increased the risk of the strategic focus, so either the risk as it’s currently articulated is not impacted by the changes at the Foundation - the distraction factor.
The crisis comms plan has been shared. We are being more proactive with the British media, but it’s a slow process. NI is in discussion with Hope and Glory PR company for some pointers on how we can go about it. We’ve got £600 for consultancy, but we’d be hoping to get advice pro-bono.
The risk surrounding the new legislative framework is not actually about our public profile, it’s more about within the Wikimedia community.
The priority of the Foundation’s funding is the global south, which is still the overall message, but within that there’s more reassuring messages. For north and west Europe and for the US they’re not budgeting for growth. But the grants team within the Foundation are asking for additional funding.
A risk has been added for QRpedia, which has been an organisational risk for 7 years but not included on the register.
MW asked whether we’d be better informed as a board about copyright. LCR suggested she highlight her headlines about legislative commentary, for example the online harms bill.
Our finance policies ensure a strong control environment against fraud.
Oral update from GovCom
The new 2022 meeting schedule was proposed, there was a lot of discussion around our existing trustees’ schedules. There was a discussion around the recruitment of a legal trustee. JC suggested that it’s difficult to take half days off if trustees are in more junior positions and it could limit EDI.
2023 meeting schedule and future finance reporting
Dates for ARC will be scheduled once the board schedule is fixed. We will work on the basis of a gap of several weeks between ARC and the full board meetings.
LCR reported that she, DAJ and MW had met with Monisha to discuss what financial information should go to the board, particularly in the Board Pack (which represents the required reading).
AOB
MW checked in with DAJ for her workload, the job specification for a new staff member on DAJ’s team is out with Prospectus. We’re looking for one person who can do finance and admin full-time.