From the treasurer
We continue to pursue our avowed ambition to take action to protect and save birds and other wildlife both in the UK and overseas while, in common with the charity sector as a whole, taking prudent action to manage the financial challenges we face.
In 2017/18 our overall gross income, before investment gains, grew by £4 million from £134 million to £138 million; this is a positive outcome given the uncertain nature of the world in which we are currently operating.
Against this backdrop, our net income available for charitable purposes, before investment gains, rose from £98 million to £101 million and our revenue expenditure remained the same at £99 million. Taken together with some small adjustments for investment gains and the sale of fixed assets, this left us with an operating surplus of £2.6 million.
The operating surplus is calculated after charging depreciation of £4 million, but excludes the acquisition costs of nature reserves, visitor facilities and other assets of £10.7 million. Treating the cost of these assets as an operating expense would result in a deficit of £4.1 million rather than a surplus of £2.6 million and some of our financial reserves have been used to fund this deficit.
Accordingly, our free financial reserves are a bit lower than last year, but they remain well within the acceptable range set by the RSPB's Council. Appropriate steps are being taken to manage our expenditure to ensure that such financial reserves remain within this range. Our balance sheet remains very strong and was helped this year by a £16.7 million reduction in the pension liability due to marginal improvements in the assumptions in respect of interest rates and inflation.
Looking at our major sources of income, our membership and subscriptions remained more or less constant at £51 million gross, which is a good performance given the potential for the General Data Protection Regulation (GDPR) to have a negative impact. It is also a testament to the loyalty of our membership which we never forget and for which we are always thankful.
We experienced a decrease in legacy income, which at £30.4 million was £4.3 million less than the previous year. With last year’s figure being the highest ever, some reduction was to be expected and the outlook remains positive.
At £26.7 million, income from grants, corporate bodies and trusts was £5.9 million more than last year with all three elements having grown. The main increases were additional grant funding from DEFRA of £1.6 million and a £3.5 million gift of land at Franchises Lodge in the New Forest. Within land income, the construction of the visitor centre at Sherwood Forest has attracted funding of £2 million from Nottinghamshire County Council.
Our financial reserves provide a buffer against uncertainty. In this context, it's essential that we prioritise work programmes to align expenditure plans with income expectations to continue to maintain these financial reserves. This combination of balancing the books and holding an appropriate level of financial reserves gives the resilience needed to plan with confidence to meet the challenges that lie ahead for birds, other wildlife and the natural world.