The Covid-19 pandemic has seen all organisations review and adapt their operations and strategies to ensure they survive and remain relevant, and CIBSE has been responding to the business climate and membership needs.
Adrian Catchpole, CIBSE board member/trustee, teasurer and chair of the finance, risk, audit and governance (FRAG) committee, gives an insight into the committee’s work, the risks presented by Covid-19, and actions taken to date.
Explain what CIBSE’s FRAG Committee is and what it does?
FRAG is a workhorse of the CIBSE board (CIBSE’s governing trustees). It oversees the Institution’s financial affairs, minimising its exposure to risk, and reviewing its governance procedures.
It undertakes some of the more routine tasks, freeing the board to focus on the delivery of our strategic objectives and the benefits of membership. As a registered charity, there are further obligations placed on CIBSE, which FRAG attends to on behalf of the board.
FRAG’s remit crosses all boundaries of the Institution, placing it in the privileged position of being able to see all facets of CIBSE’s work across the wide range of its operations.
Its duties include: preparing and reviewing CIBSE’s annual budget and ongoing accounts; producing the Annual Report; reviewing the Risk Register; testing business cases for new initiatives and investment; and ensuring CIBSE delivers on its objectives.
Where does CIBSE get its money from?
CIBSE has a robust business model based broadly on income of £3.4m per year from membership subscriptions and £3.6m from the Institution’s commercial entities – CIBSE Services, CIBSE Certifications and the Hong Kong region.
CIBSE Services delivers work in respect to our events and awards, training, CIBSE Journal, Knowledge Portal, and licensing/directories.
Together with fees for charitable services and investment returns, our total group income is approximately £7.4m.
How does CIBSE spend its money?
As a charity, we seek to set a break-even budget, with income generated reinvested to further strategic objectives (2020-2025 Strategy Document).
In 2019, CIBSE spent around £7.3m, of which 44% was spent by CIBSE Services, CIBSE Certification and Hong Kong on producing and running events and products – all of which work towards achieving our charitable objectives.
Importantly, our commercial entities significantly contribute towards CIBSE’s overhead costs including costs associated with the building and other general business expenses.
The remaining 66% was spent by Membership Services, regions, groups and societies, technical and research. (See our 2019 Annual Report)
How have CIBSE’s sources of funding been affected this year?
While subscription levels have remained healthy, CIBSE Services has seen its activity hit, with the loss of face-to-face training and a reduction in advertising in CIBSE Journal being the areas worst affected.
What has the Institution done to recover this position?
The first action by the board was to suspend the 2021 membership subscription increase. This was a difficult decision and may require above-inflation increases in future. However, the trustees were adamant that it was not the right time to authorise an increase.
A full review of budgets and reforecasting followed, with the assumption of continued severe disruption to services to the end of 2020. This revised 2020 budget showed a deficit of £208k and included the following cost-saving measures:
- Travel and subsistence freeze for staff and members
- Cancellation of the President’s dinner
- Suspension of CIBSE Journal overseas mailing
- Recruitment pause
- Grants to UK regions reduced by one third, owing to reduced sessional meetings
- Research fund holiday until 2021
What other safeguards does CIBSE have in place?
FRAG continues to monitor income and expenditure, and the latest forecasting suggests that the Institution is doing better than was expected in April.
The situation is constantly changing, but through the exceptional work of the staff and volunteers, CIBSE is adapting and finding new ways to deliver services to members.
We have secured a Coronavirus Business Interruption Loan of £500,000, which CIBSE can use, rather than drawing down on investments should funds be required.
As a volunteer what makes you want to give your time to CIBSE?
I have been in the industry for over 35 years and am passionate about what we do.
I share CIBSE’s aims and aspirations, of aspiring to the highest levels of quality and performance, attracting young people to our industry and strengthening the voice of the building services engineer.
CIBSE relies on volunteers and there are a huge range of opportunities. I recommend anyone to get involved – the more we engage and work together, the more we can achieve.