Financial summary 2019

Our statement of financial activities demonstrates a stable performance in a challenging funding environment.

Income of GBP£20.8 million in the year was consistent with that recorded in 2017/18 (£20.7 million). Net income increased to £294,000 from £90,000 in 2017/18.

The number of employees increased by 11 to 136, reflecting an expansion in our research activity (our core function staffing remained static).

Despite the tough operating environment IIED has improved its financial resilience through:

• Continued efficiencies in the core functions. Operating costs reduced slightly in 2018/19, but the total support cost (see note 3) increased due to the inclusion of depreciation (£172,000), provision for dilapidations (£216,000) and an unrealised foreign exchange loss (£94,000). Other significant changes compared to the previous year reflect a reallocation of expenditure in 2018/19 to different cost centres.
• Unrestricted reserves increasing from £2.03 million to £2.497 million in the year as described further below.

IIED does not raise funds from the general public, and is not a grant making organisation; instead it works in collaboration with its partners, resulting in no fundraising activity and grant making disclosures being given.

Reserves policy

To protect the organisation and its charitable programme against the risks of funding loss through income shortfalls and other unexpected financial needs, IIED’s reserves policy sets a target for unrestricted reserves of approximately four months of operating costs and staff salaries less liabilities from employee benefits (around £2.2 million). We have therefore set the target range of unrestricted reserves at between £1.9 million and £2.5 million.

As set out in Note 10 of the accounts, our total reserves closed the 2018/19 year at £2.769 million, an increase of £294,000 over last year (£2.474 million). This increase follows a £172,000 reduction in the Building and Capital Fund reserve, which is designated to cover the anticipated cost of leasehold improvements over the remaining lease period on the Gray’s Inn Road site. The current unrestricted reserves have increased to £2.497 million, within the target range endorsed by the board.

During 2018/19, IIED continued to develop its new systems, and the investment cost of £114,000 (systems development and consultancy) has been capitalised this year.

During 2019/20, IIED will review its reserves policy to ensure it is aligned with the new five-year strategy launched in April 2019.

Investment policy

We invested our cash in a combination of high-interest cash deposits and fixed-term treasury deposits during 2018/19, with A rated financial institutions. This policy produces an acceptable rate of return while giving us flexibility to access funds.

Related parties

Some IIED trustees are also trustees of other charities or directors or senior officers in other organisations IIED works with as a normal part of its research activities. Where such work involves payment, they enter into arm’s length contracts and any payments related to these contracts are detailed in the notes to these accounts. The board operates a conflicts of interest policy.

Looking ahead

During 2018/19, IIED developed its next five-year strategy (2019-24) which was agreed by the board and launched in April 2019. During 2019/20, IIED will be reviewing its operations and developing supporting plans to ensure we are able to deliver against our strategy.

Value for money statement

Demonstrating value for money is ever more important for organisations using public funds. With aid budgets under pressure, development organisations need to show that they are efficient, that poor people's lives are actually improving, and that the environment is protected. Read our value for money statement on our Publications Library.

The trustees' report and accounts for the year ended 31 March 2019 contains detailed financial information, including a breakdown of all income received by IIED above £10,000.

Previous reports

See the financial summaries from previous years: 2018; 2017; 2016; 2015; 2014; 2013

2018/19 financial summary