BBC Children in Need was criticised by the Daily Mail today for holding onto almost £90m of charity money in bank accounts and investment portfolios.
The grantmaking charity runs an annual celebrity-endorsed televised appeal and is currently gearing up for next month's show. But a spokesman for Children in Need said the charity’s large reserve is a result of its grantmaking strategy of releasing funds slowly over period of three years.
“This money is not simply cash,” the spokesman said. “It has been allocated to projects working with disadvantaged children and young people throughout the UK.
“In line with standard grantmaking practice we do not typically release the full grant upon successful application from projects but rather over a three-year period on a quarterly basis so we can monitor projects to ensure that they continue to comply to the terms and conditions of the grant.
“The level of our investments reflects the record amounts raised in the charity’s appeals over the last two years and thus our ability to award record amounts to change young lives.”
The charity currently has investment portfolios worth £87.7m – up from £81.2m last year.
The latest accounts also reveal that £9,000 was paid in fees to fund managers and the return from the assets was £864,000.
David Carrington, an independent consultant specialising in sector finance and a former trustee of Children in Need, said that he felt it was “sensible and prudent” for the charity to hold the amount it did.
He said charities are normally required by accounting rules to have cash in the bank to meet all future grant commitments.
“There have been mutterings before that BBC might replace Children in Need with another appeal,” he said. “If the tap was turned off like that, you would need to have enough money to meet all your future requirements.”
£20m expected from this year's Children in Need
The charity is expected to raise £20m this year from its latest charity drive, which includes a BBC recording of the Beach Boys track 'God only knows' and a series of celebrity-endorsed fundraising campaigns.
The money will be given as grants to charities who help disadvantaged young people around the country.
In 2006, the independent watchdog Intelligent Giving advised viewers not to donate to the charity because of its administration costs. Of £33m raised at the time, £2.4m went towards administration costs.
The charity was set up in 1980 and has raised more than £600m for children and young people in the UK.
