Annual Report - Chatham House

HONORARY TREASURER’S REPORT
The year to 31 March 2002 was one of transition during
which the Director put in hand a number of changes to
secure the future of the Institute. As expected the
results reflect this.
The Institute achieved an overall surplus of £66,000 for
the year. There was a deficit of £15,000 on general
unrestricted funds. Net expenditure out of designated
funds amounted to £29,000. Research activity showed
an overall surplus of £130,000 but drew down £30,000
from restricted funds. The market value of investments
increased by £10,000. Cash outflow was £124,000.
The deficit of £15,000 on general unrestricted funds was
after a number of one-off items, namely a legacy
received, the recovery of tax under gift aid from the
previous year and an up-front payment which was
negotiated on the new publishing agreement. Without
these the deficit would have been £170,000, which is
somewhat worse than budget. Conferences were
adversely affected by the 11 September tragedy and,
although remaining profitable, were behind budget.
The results include the costs of new members of staff
recruited to improve fundraising and membership.
Membership income increased to £844,000 including
£64,000 of recoveries of gift aid compared with
£767,000 in the previous year. Council members and
senior members of staff contributed £20,000 to the
Annual Fund.
Net expenditure out of designated funds amounted to
£29,000, comprising £15,000 of costs associated with
the website and £14,000 spent on the Mercosur study
group out of the New Initiatives Fund. £130,000 has
been allocated from unrestricted funds into the New
Initiatives Fund to support the Director in rebuilding the
research base.
Research income improved compared with the previous
year, largely as a consequence of funding agreed for the
joint study on China. The Sustainable Development
Programme, however, had to use restricted Belgrave
funds to cover its deficit of £30,000 at the year end.
Cash outflow of £124,000 included capital expenditure
on the website, completion of the library software
project and other smaller IT projects totalling £123,000.
£500,000 of monies from restricted funds was placed
with Schroders, selected by the Institute as investment
managers, and at the year end £249,000 had been
invested in a common investment fund designed for
charities. The Institute ended the year with deposits and
investments amounting to £4.3 million compared with
£4.4 million at the beginning of the year.
The budget for the year to 31 March 2003 is close to
breakeven on unrestricted general funds. It is planned to
achieve this turnaround through the drive for new
members and continuing tight control of costs. The
Institute has authorized capital expenditure of
£359,000 for the year to 31 March 2003 in order to
refurbish the fourth floor. There will also be outflows on
designated funds from the utilization of the remaining
funds that were set aside for the website and the
drawdown of part of the New Initiatives Fund to help
finance research activity. The budget is challenging but
achievable, and represents a clear step towards
generating the surpluses on general unrestricted funds
that the Institute needs in order to secure its future.
Adrian Lamb
11 June 2002
The Royal Institute of International Affairs — Annual Report 2001-2002 19