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2020-12-31-accounts

~~ANNUAL REPORT 2020~~

~~TRUSTEES’ REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020~~

~~PRINCIPALS, TRUSTEES AND SENIOR MANAGEMENT TEAM~~

~~PATRON~~

Her Majesty The Queen

~~PRESIDENT~~

HRH The Duke of Kent KG GCMG GCVO ADC(P)

~~LIFE VICE-PRESIDENTS~~

Marshal of the Royal Air Force The Lord Craig of Radley GCB OBE MA DSc FRAeS

Air Chief Marshal Sir Michael Graydon GCB CBE ADC FRAeS Air Chief Marshal Sir Stephen Hillier GCB CBE DFC ADC MA Air Chief Marshal Sir Richard Johns GCB KCVO CBE FRAeS Air Chief Marshal Sir Roger Palin KCB OBE MA FRAeS FIPD Lady Hillier

Lady Humphrey OBE (died 3 January 2021)

~~VICE-PRESIDENT~~

John Isabel

~~COUNCIL~~

Chair

Lawrie Haynes DEng BA (Hons) FCILTR FRSA

Deputy Chair

The Viscount Trenchard of Wolfeton DL

Honorary Treasurer

Dr Stephen Critchley MA (Hons) DPhil FCA (until 26 November 2020)

Alastair Irvine BA (Hons) MCSI (from 26 November 2020)

Members

Air Chief Marshal Sir Michael Wigston KCB CBE ADC RAF

Air Marshal Andrew Turner CB CBE MA MSc BA FRAeS CCMI RAF

Air Vice-Marshal John Cliffe CB OBE

Air Vice-Marshal Simon Dougherty MBE MSc MBBS FRCP FFOM DAvMed DObstRCOG FCMI FRAeS (until 1 June 2020)

Air Commodore Ro Atherton (until 14 December 2020) Frances Brindle MSc BSc (Hons) David Cheyne MA (Cantab)

Wing Commander Marie-Noelle Orzel OBE QVRM MSc PGDE RGN RSCN (from 1 June 2020)

~~TRUSTEES~~

Chair

Lawrie Haynes DEng BA (Hons) FCILTR FRSA

Honorary Treasurer

Dr Stephen Critchley MA (Hons) DPhil FCA (until 26 November 2020)

Alastair Irvine BA (Hons) MCSI (from 26 November 2020)

Members

Kathryn Adamson (until 23 October 2020)

Allyson Arnold MSc BScN (Hons) (from 1 June 2021) Patrick Aylmer FCA (from 1 June 2021)

Alison Benjamin BA (Hons) (from 1 June 2021)

Frances Brindle MSc BSc (Hons) Sarah Casemore MBA (from 1 June 2021) David Cheyne MA (Cantab) Graeme Craig MA

Richard Cryer MA (Cantab) FCA (from 1 June 2021)

Wing Commander Sarah Davis MBA MSc FCIPD

(from 1 June 2020)

Air Vice-Marshal Simon Dougherty MBE MSc MBBS FRCP FFOM DAvMed DObstRCOG FCMI FRAeS (until 1 June 2020)

Richard Ingham (until 25 March 2021)

Wing Commander Marie-Noelle Orzel OBE QVRM MSc PGDE RGN RSCN

Graeme Shankland

Air Vice-Marshal Elaine West CBE

~~SENIOR MANAGEMENT TEAM~~

Controller

Air Vice-Marshal The Honourable David Murray CVO OBE (until 20 April 2020)

Air Vice-Marshal Chris Elliot CB CBE MA BSc (from 20 April 2020)

Chief of Staff/Director of Governance

Air Commodore Paul Higgins MA BA (Hons) FCILT FCMI

Director of Finance

Victoria Fakehinde BSc (Hons) ACMA CGMA

Director of Fundraising and Communications

John Trampleasure (until 1 May 2020)

Mike Straney (from 4 May 2020 until 30 April 2021)

Jason Shauness BEc (Hons) Grad Dip REM (from 24 May 2021)

Director of Welfare

and Policy

Air Commodore Paul Hughesdon MA

~~CENTENARY CAMPAIGN ADVISORY BOARD~~

Mr Duncan Barber Mr Bernard Brown Lord Charles Bruce DL Ms Jane Burrows Mr Malcolm Crayford OBE Ms Clair Hassard

Ms Melissa John

Mr Andrew Martin Dr Michael Oliver OBE DL Air Marshal Peter Ruddock CB CBE

Mr Richard Shirley The Viscount Trenchard of Wolfeton DL

Air Chief Marshal Sir Michael Wigston KCB CBE ADC RAF

Royal Air Force Benevolent Fund Principal and Registered Office 67 Portland Place, London W1B 1AR

~~CONTENTS~~

~~TRUSTEES’ REPORT~~

~~TRUSTEES’ REPORT~~
Foreword 4
Aims, objectives and values 6
Our strategic aims: progress and changes 8
2020: our key stats 12
Our fve key aims 14
Fundraising 20
Supporter promise 22
Grant making 23
Financial highlights 24
Financial review 26
Strategic risk management 32
Structure, governance and management 36
Principle professional advisers 39
~~INDEPENDENT AUDITOR’S REPORT~~ ~~40~~
~~FINANCIAL STATEMENTS~~ ~~44~~

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TRUSTEES’ REPORT

~~SUPPORTING THE RAF FAMILY DURING A TURBULENT YEAR~~

2020 will go down in history as one of the Fund’s most challenging years ever. While we faced many difficulties due to the Covid-19 pandemic, we are proud of how we continued to support the RAF Family during these toughest of times.

The onset of the Covid-19 pandemic turned the lives of many in the RAF Family upside down, leaving people facing everything from extreme loneliness and isolation to financial problems, anxiety and bereavement. We knew we had to rapidly adapt our ways of working and our key services to be there for those most in need. Despite a downturn in income, we are pleased to have supported over 63,700 veterans and serving personnel – and their families – in 2020, spending £26M to help them get through this turbulent year.

Tackling social isolation – particularly amongst veterans – was a crucial challenge. As the pandemic took hold we immediately set up our Check and Chat call service, with staff from the Fund regularly calling socially-isolated RAF Family members throughout the year to see how they were coping. We also quickly expanded our Telephone Friendship Groups, with 88% more people taking part compared to 2019.

Supporting the RAF Family’s mental wellbeing during such a difficult time was another important task for us. Our Listening and Counselling Service, new 24-hour Emotional Support Helpline and new counselling service for children and young people all helped with this. We also made sure relationship counselling was still available online. We were there for children in other ways too, launching Airplay Connect, a digital platform where young people – isolated from school and their

friends – could access our programme of activities. We also made up to £2.5K available for each RAF station to provide activity packs for families and support for those living in single living accommodation during lockdown.

We continued to support members of the RAF Family in financial need too, from topping up pensions to helping with unexpected bills. We quickly made it possible to apply for grants of up to £750 completely online – a first for a UK military charity. We continued our important work giving grants to support RAF Family members to live independently and with dignity too.

We were, however, immensely sad to permanently close Princess Marina House, our care and respite centre on the West Sussex coast. We thank all our staff there for their hard work over the years, and hope our guests will continue to use our other welfare services.

Our wide-ranging work this year would simply not have been possible without the incredible support of our amazing donors and fundraisers. Thank you so much for your help, especially during what was a difficult financial year for many. We would also like to thank the Fund’s brilliant, hard-working staff, who adapted so well to sudden and unsettling changes this year, and continued to do everything they could to help the RAF Family. Gratitude must also go to the Fund’s Trustees for their invaluable guidance through these uncharted waters.

We go into 2021 hopeful that the Covid-19 situation will stabilise, and we will continue to evaluate how we can best support the RAF Family. We are a resilient organisation, and in many ways the pandemic has made us stronger, forcing us to look at how to become more efficient and adaptable, and at new ways to live up to our values of being beneficiary-focused, compassionate, inclusive, responsive and trustworthy. The pandemic has also brought many communities closer together. We hope this will mean more people will direct RAF veterans to us for help.

For the past 100 years, the Fund has stood side by side with the RAF Family during its toughest times – and we are confident we will make it through this huge challenge more robust than ever.

Lawrie Haynes Air Vice-Marshal Chris Elliot CB CBE Chair Controller Royal Air Force Benevolent Fund Royal Air Force Benevolent Fund

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TRUSTEES’ REPORT

~~AIMS, OBJECTIVES AND VALUES~~

~~OUR VISION~~

~~OUR PURPOSE~~

No member of the RAF Family will ever face adversity alone.

To understand and support each and every member of the RAF Family, whenever they need us.

~~OUR VALUES~~

Beneficiary-focused – We place the people we support at the heart of all we do and act in their best interests, understanding their needs and using our expertise to provide appropriate solutions.

Compassionate – We show empathy, giving a helping hand to those in need and distress.

Inclusive – Promoting fairness, diversity and respect for others, we are non-judgemental and non-discriminatory. We make ourselves accessible to all those who need our help.

Responsive – Forward leaning and innovative, we remain relevant by anticipating changes in the wider environment which affect those who need our help.

Trustworthy – We have integrity and are honest. We strive to do the right thing, and challenge decisions and actions which are not consistent with our values, while remaining accountable for our actions.

~~OUR OBJECTIVES AND ACTIVITIES~~

~~PUBLIC BENEFIT STATEMENT~~

We support current and former members of the RAF, and their partners and families, providing practical, emotional and financial support. We are committed to getting them through the toughest times, whatever life may send their way.

When reviewing the Fund’s aims and objectives and in planning future activities and policies, the Trustees have given careful consideration to the Charity Commission’s general guidance on public benefit and to its supplementary guidance on public benefit and fee charging.

Most of our services can be used by both serving and former personnel and their partners and children. These include one-off grants to help with unexpected expenses like a broken boiler or home adaptions, relationship counselling and bereavement support.

All of our services are either free or heavily subsidised. Where we ask for contributions, for example towards the costs of living in one of our Housing Trust properties, we always take beneficiaries’ means into account. No member of the RAF Family should be prevented from accessing our services because they cannot afford the full cost.

Some services can only be accessed by current personnel and their families. These include our subsidised breaks and online mindfulness programme. For former personnel and their partners, our Telephone Friendship Groups provide a safe space to chat to others in the comfort of their own home.

Through our External Grants programme, we also enable other charities to maximise their public benefit in support of the RAF Family.

We also maintain the RAF Memorial on the Victoria Embankment and the Bomber Command Memorial in Green Park, London.

~~OUR STRUCTURE~~

We carry out our activities through the following subsidiaries:

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TRUSTEES’ REPORT

~~OUR STRATEGIC AIMS: PROGRESS AND CHANGES~~

the Fund remained high, and we saw a 32% increase in our overall media coverage. After 18 months, the campaign officially ended in December 2020, having brought about significant increases in the number of people we reached and helped.

Despite the huge and unprecedented challenges brought by the Covid-19 pandemic, we continued to implement the strategic aims from our 2017-2022 strategy in 2020. The Fund’s strong governance and financial management meant we were able to adapt with agility to the changing circumstances and continue to support the RAF Family uninterrupted, while responding to new and emerging needs.

We also completed a review of our beneficiary journey – the process members of the RAF Family go through when they come to us for help. This led us to begin developing a new model involving more practical support to people accessing our services, particularly when they make initial enquiries and when a caseworker assesses them for help. We began implementing this new model (including developing online forms and providing more support to navigate the enquiries process) in 2020 and will continue throughout 2021.

However, we had to make some significant adjustments to our original plan for the year in light of Covid-19. We also recognised that, with the world changing so significantly, we needed to overhaul our strategy for 2021, 2022 and beyond. Our new interim ‘stabilise and adjust’ strategy will guide our work over the next two years, while we prepare a longterm strategy to continue supporting the RAF Family through their toughest times.

We adapted and deepened our engagement with key stakeholders and caseworkers to expand our local reach too, using videoconferencing due to travel restrictions.

~~PROGRESS AGAINST 2017–2022 STRATEGIC AIMS~~

~~STRATEGIC AIM 2~~

~~STRATEGIC AIM 1~~

To expand our welfare services in key areas, assessing and responding to the ever-changing needs of veterans,

To reach and support more RAF Family members in need

In 2020, we continued our multi-channel campaign to put veterans in need of our support ‘Back On The Radar’, encouraging members of the RAF Family to come to us for assistance. Although we had to adapt our plans due to the pandemic, we remained successful in raising awareness of the Fund and reaching new people. Enquiries about our welfare services and public awareness of

serving personnel and their families

We continued to offer the RAF Family support in five key areas: emotional wellbeing, friendships and connections, family relationships, independent living and financial assistance. We adapted our services and found innovative ways to ensure the RAF Family could still access them during the pandemic, including:

For more about our impact in our five key areas of work, see pages 14–18.

We also continued to invest in research to increase our understanding of the current and changing needs of the RAF Family. We concluded a major piece of research into the wellbeing of children and young people growing up with one or more parents serving in the RAF, and we launched a new research project into wellbeing and coping within the serving community.

The impact of Covid-19 meant that the planned expansion of our respite and care provision and Group Wellbeing Breaks for dementia sufferers could not go ahead. The Fund also had to make the very difficult decision to close Princess Marina House (see box on the following page).

~~STRATEGIC AIM 3~~

To increase income across all fundraising channels

The effects of Covid-19 resulted in the Fund falling 20% short of its planned income. Reduced legacy income, cancelled events and lack of face-to-face engagement created challenges for fundraising. Despite this, we successfully adapted to the difficult circumstances, moving events like our annual awards and Bomber Command Memorial service online and developing targeted and innovative approaches to continue engaging our audiences.

Hard-won results in some income streams (including direct marketing, in-memory giving, and corporate, major donors and trusts income) were better than expected, offsetting what could otherwise have been a worse result.

We succeeded in raising brand awareness despite the challenging circumstances. Work around the 80th anniversary of the Battle of Britain in particular generated significant media interest and provided an excellent opportunity to involve supporters and partners.

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TRUSTEES’ REPORT

~~STRATEGIC AIM 4~~

To strengthen our governance and support functions so we can better help our beneficiaries

Our robust business continuity management framework and previous work to improve our telephone, IT and intranet systems meant we were able to swiftly move to home-working in response to the pandemic, with no disruption to our ability to help the RAF Family.

We enhanced our governance and compliance practices, completing an information security audit, developing a records management programme and giving ongoing support to staff to ensure

~~CLOSING PRINCESS MARINA HOUSE~~

In July 2020, we made the reluctant but necessary decision to permanently close Princess Marina House, our care and respite centre on the West Sussex coast.

Before the Covid-19 pandemic, our research told us the number of veterans and their partners likely to visit Princess Marina House would decline, bringing the centre’s long-term viability to the attention of the Board of Trustees. However, no decisions about its future had been made.

Covid-19 meant Princess Marina House needed to shut its doors temporarily in March 2020. Reviewing the situation in July 2020, our Trustees concluded that it was unlikely that we would be able to welcome back our guests, who primarily

that practices, projects and contracts remained compliant in the changed working environment. We also developed a fundraising contract management framework, and reviewed our complaint management processes.

We continued our project to implement a new finance system, which went live in March 2020, and improved our financial reports.

We strengthened governance at the Board level too by completing a review of Board effectiveness (with the recommendations implemented throughout 2020 and 2021); reviewing and formalising Trustee recruitment and induction processes; and mapping Trustee skills against a Board skills matrix, which we are now using to inform Trustee recruitment drives.

Our HR function prioritised staff wellbeing. We also supported staff through the redundancy process made necessary by the closure of Princess Marina House.

fall into the vulnerable category, before mid-2021. If we had, their experience would have been vastly different due to the measures needed for their safety. Many of our guests may not have felt comfortable returning to Princess Marina House at all in the near future, despite safety measures in place. Looking back on the impacts of the second wave of the virus, we are confident that this difficult choice was the right one.

The move to close for good was made with great sadness as Princess Marina House was a unique and special place both to visit and to work. We contacted all guests directly to let them know and to ensure they were aware of the other support and welfare services we provide.

~~OUR INTERIM ‘STABILISE AND ADJUST’ STRATEGY~~

The Fund’s 2017–2022 strategy has been enormously successful. It has broadened and deepened the services we offer the RAF Family, our fundraising capacity and back-office capability, and led us to support significantly more people. However, in the three years since we wrote it, there have been changes to the RAF Family’s composition, the fundraising environment, governance, and the Armed Forces charity sector. The Covid-19 pandemic and other factors have driven these changes.

This has made it necessary for us to retire our 2017–2022 strategy and reset our strategic direction.

3. To protect and enhance our reputation by demonstrating that we are a trusted, inclusive organisation that has our beneficiaries at our heart

We have adopted a short-term strategy for 2021 and 2022 to stabilise our operations and adjust to immediate challenges and opportunities. At the same time, we will review our position and develop a new longterm strategy to serve the RAF Family.

Our ‘stabilise and adjust’ strategy’s aims and objectives are:

1. To effectively support members of the

2. To develop and adopt a more financially

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TRUSTEES’ REPORT

~~2020: OUR KEY STATS~~

£26M SPENT SUPPORTING 63,700+ MEMBERS OF THE RAF FAMILY

HOW WE WERE THERE FOR PHILL AND SALLY

Just months before he was due to retire from the RAF following 39 years’ service, Phill Taylor received the devastating news he had Alzheimer’s disease. “Phill had an amazing sense of humour and was so quick-witted,” says his wife Sally. “Sadly this is no more. This disease has taken my husband from me.”

Before Covid-19, our Community Engagement Worker Graeme Spark had been visiting, helping Phill maintain his link to the RAF and taking the strain off Sally. When the pandemic hit, he continued his support via FaceTime.

“Phill loves reminiscing about his RAF days with Graeme. Graeme takes Phill out, giving me some much-needed respite,” says Sally.

Graeme is one of our four – soon to be six in 2021 – Community Engagement Workers supporting veterans to feel less isolated.

£21.2M+ £4.8M+ SPENT SUPPORTING SPENT SUPPORTING 21[,] 500+ 42[,] 200+ VETERANS AND SERVING PERSONNEL THEIR FAMILIES AND THEIR FAMILIES

Phill loves reminiscing about his RAF days with Graeme.”

96% 92% SAID OUR SUPPORT RATED OUR SERVICE IMPROVED THEIR AS EITHER ‘EXCELLENT’ QUALITY OF LIFE OR ‘VERY GOOD’

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TRUSTEES’ REPORT

~~KEY AIM 1: EMOTIONAL WELLBEING~~

~~WE SUPPORT THE RAF FAMILY’S MENTAL WELLBEING~~

Family, in June 2020 we launched a specialist counselling service for 11- to 18-year-olds, helping 71 young people by the end of the year. Towards the end of 2020, we extended the service to children aged five and over.

In normal times, RAF life is tough. Challenges for serving personnel include deployment, family separation and frequent moves between postings. And for veterans and serving members alike, loneliness, bereavement and ill health can all cause unhappiness.

The meditation and mindfulness app Headspace offers practical tips and exercises to relieve stress. In 2020, in addition to offering free Headspace memberships to serving RAF members, we opened up the programme to their partners too. Over 1,800 people signed up, bringing our total membership to over 4,600. 99% of members we surveyed said they would recommend Headspace to a colleague.

Covid-19 shook many in the RAF Family’s mental wellbeing even further, causing financial difficulties, increased isolation and stress, fear of illness and more.

Throughout this turbulent year, we were there to support the RAF Family to stay strong, stay resilient, and improved their emotional wellbeing.

£854K

~~HOW WE ACHIEVED THIS~~

Our Listening and Counselling Service supports people struggling with bereavement, low mood, anxiety and depression. In 2020, the service moved to virtual counselling sessions, and helped over 950 members of the RAF Family. 97% of people who completed their counselling course saw a reliable improvement or recovery in their mental health.

SPENT ON IMPROVING THE RAF FAMILY’S EMOTIONAL WELLBEING

950+

1,800+

RAF FAMILY NEW MEMBERS OF MEMBERS MINDFULNESS APP SUPPORTED BY OUR HEADSPACE LISTENING AND COUNSELLING 99% SERVICE OF HEADSPACE

With the pandemic leading to extra stress and anxiety for many members of the RAF Family, we launched our Emotional Support Helpline this year. Trained counsellors are available on the phone 24 hours a day to talk through people’s problems.

SERVICE OF HEADSPACE USERS WOULD 97% RECOMMEND IT OF THOSE WHO TO A COLLEAGUE

COMPLETED

COUNSELLING SAW IMPROVEMENT IN THEIR MENTAL HEALTH

It’s estimated that one in eight children have experienced a mental health issue such as anxiety. To support children in the RAF

~~KEY AIM 2: FRIENDSHIPS AND CONNECTIONS~~

~~WE MAKE SURE NO ONE IN THE RAF FAMILY FEELS ALONE~~

Our four Community Engagement Workers continued their work to reduce social isolation and loneliness in Cambridgeshire, Norfolk, Suffolk and Lincolnshire. On the phone rather than in person, they helped 215 people find new activities to help them feel less lonely.

For all of us, a vital part of wellbeing is having people to turn to, talk to and share life with, in good times and bad. But not everyone in the RAF Family has this. We estimate that over 85,000 veterans and their partners feel lonely and many simply don’t know where to turn for help. Serving members and their families often find life in the RAF, with its frequent moves, lonely too.

Our Social Engagement Workers, based at RAF Leeming, RAF Lossiemouth, RAF Odiham and RAF Honington, help people become more involved in social activities in their communities. While Covid-19 curbed much of their usual work, this year they supported 188 people to feel less socially isolated. They also ran virtual social events including coffee mornings, quizzes and bingo.

Helping the RAF Family create friendships and connections is a key part of our work. As Covid-19 plunged many into complete isolation, we made sure no one faced these tough times alone.

~~HOW WE ACHIEVED THIS~~

3,700+

When the pandemic hit in March 2020, we were extremely concerned for the many RAF veterans and their partners facing self-isolation, shielding and loneliness. In response, we immediately launched our Check and Chat call service, with staff from the Fund regularly calling socially-isolated RAF Family members to see how they were coping. We made more than 3,700 calls to 277 members of the RAF Family during the year.

CHECK AND CHAT CALLS MADE TO 277 RAF FAMILY MEMBERS ISOLATED BY THE PANDEMIC

£96K

62%

SPENT ON OF TELEPHONE TELEPHONE FRIENDSHIP FRIENDSHIP GROUPS GROUPS PARTICIPANTS MADE NEW FRIENDSHIPS

Another key part of our response to the pandemic was expanding our Telephone Friendship Groups service – weekly calls between up to six RAF veterans or their partners, facilitated by a trained volunteer. In 2020, 246 isolated RAF Family members used this service – up from 131 in 2019. Around two thirds of participants surveyed said they had made new friendships.

246

215

VETERANS AND THEIR PARTNERS PEOPLE SUPPORTED SUPPORTED BY OUR THROUGH OUR COMMUNITY TELEPHONE ENGAGEMENT FRIENDSHIP WORKERS GROUPS

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TRUSTEES’ REPORT

~~KEY AIM 3: FAMILY AND RELATIONSHIPS~~

~~WE IMPROVE LIFE FOR RAF FAMILIES~~

person meetings had to stop in March, we launched Airplay Connect, a digital platform young people can use to access Airplay. There were 220 sign-ups throughout the year. We also made up to £2.5K available for each RAF station to provide activity and wellbeing packs for children missing out on Airplay sessions, and to support those living in single living accommodation.

Apart from the usual strains of family life like money and parenting concerns, serving RAF couples have to cope with extra pressures, including uprooting themselves as they go from posting to posting, and maintaining long-distance relationships during deployments and training away from home.

Funding facilities for children and young people on RAF stations is another key part of our work. This year, we spent £641K on play parks for RAF stations.

Relationship breakdown, social isolation and loneliness are common – and in many cases are being exacerbated by the Covid-19 pandemic. Veterans and their families can, of course, face relationship problems too.

Thrive, our pilot workshops for partners of serving RAF personnel to improve their wellbeing, resilience, employability and ultimately quality of life, continued virtually in 2020. After our Building for the Future workshop, 86% of participants felt better prepared for the years ahead.

In 2020, we were there with a whole range of support to help serving families and veterans with the challenges they faced, keeping them together, improving wellbeing, enhancing children’s lives – and ultimately aiming to make RAF personnel happier and more efficient at work.

£2.1M

~~HOW WE ACHIEVED THIS~~

In partnership with Relate, we offer free relationship counselling and subsidised mediation sessions to members of the RAF Family to help them work through their problems. Our free online course, Building Stronger Families, also helps serving personnel and their partners navigate relationships and family life. In 2020, we gave more than 1,200 people relationship support, with 91% who completed relationship counselling reporting an improvement in communication with their partner.

SPENT ON IMPROVING THE LIVES OF FAMILIES

1,200+

1,900+

RAF FAMILY CHILDREN AND MEMBERS RECEIVED YOUNG PEOPLE RELATIONSHIP TOOK PART IN SUPPORT EXCITING ACTIVITIES THROUGH OUR 91% AIRPLAY AND BEN REPORTED AN CLUBS IMPROVEMENT IN COMMUNICATION £641K WITH THEIR SPENT ON PLAY PARTNER PARKS FOR RAF STATIONS

Our Airplay and Ben Clubs offer interesting and exciting activities for children and young people on RAF stations. In 2020, over 1,900 children and young people took part in the programmes. With Covid-19 meaning in-

~~KEY AIM 4: INDEPENDENT LIVING~~

~~WE HELP RAF FAMILY MEMBERS KEEP THEIR INDEPENDENCE AND LIVE WITH DIGNITY~~

We specialise in providing advocacy in a number of areas, including care services issues. We can act on behalf and argue in favour of RAF Family members facing problems including getting a care assessment, funding for care and more. We supported 786 people in 2020, with 96% of those surveyed saying it had benefitted them or a member of their family.

Losing independence due to disability, injury or advancing years can be distressing. This can be particularly true for members of the RAF Family, who through their service are used to being proudly self-sufficient.

In 2020, we continued to support RAF Family members to live full lives independently and happily in their homes for as long as possible. We also helped with care home fees, so RAF Family members could live in a better standard of home, closer to family and have dignity in retirement.

£7.9M

SPENT ON HELPING THE RAF FAMILY LIVE MORE INDEPENDENTLY

~~HOW WE ACHIEVED THIS~~

We made more than 2,100 grants to RAF Family members in 2020 to pay for mobility, care and disability equipment so they could live comfortably and get out and about. 84% of grant recipients surveyed said their need had been fully met or the grant had helped them. We also gave £307K to help pay for care at home.

£1M

2,100+

GRANTS GIVEN TO PAY FOR MOBILITY, CARE AND DISABILITY EQUIPMENT

PAID TO TOP UP CARE HOME FEES

786

PEOPLE SUPPORTED BY OUR ADVOCACY SERVICE

£400K

We awarded £400K in grants to serving members of the RAF and their dependants to use to alter their homes to make them more accessible, plus £31.1K in grants to wounded, injured and sick personnel leaving the RAF to help them transition back into civilian life.

GIVEN TO SERVING MEMBERS OF THE RAF TO PAY FOR ACCESSIBLE HOUSING

We were there to help those who needed to go into a care home too, spending £1M to top up fees so members of the RAF Family could live in the best homes possible.

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TRUSTEES’ REPORT

£

~~KEY AIM 5: FINANCIAL ASSISTANCE~~

~~WE’RE THERE FOR THE RAF FAMILY WITH FINANCIAL HELP~~

financial support. With this difficult due to Covid-19, we quickly made it possible to apply for grants of up to £750 completely online – a first for a UK military charity.

If a member of the RAF Family runs into financial difficulties, we’re by their side. We can provide support with paying for urgent home repairs, topping up pensions, funeral expenses, debt and much more. We can also advise on and help people apply for welfare benefits.

The benefits system – in ever more demand in 2020 – can be difficult to navigate. Our Advice and Advocacy Service helps those struggling to get support. This year we identified £2.7M in unclaimed benefits and £16.5K in one-off lump sum payments people could claim. 96% of people surveyed who used the service rated it as ‘excellent’, ‘very good’ or ‘good’.

2020 threw many members of the RAF Family into turmoil, from working-age veterans finding themselves unemployed, to veterans needing extra support with bills. Our grants and advice provided a much-needed safety net, relieving worry and helping RAF Family members get back on their feet during a difficult time.

£6M

SPENT ON SUPPORTING THE RAF FAMILY FINANCIALLY

~~HOW WE ACHIEVED THIS~~

We gave more than 4,900 individual awards to veterans and their partners, and over 500 individual awards to serving RAF members and their dependants in 2020. 96% of veterans surveyed said their need had been fully met or they had been helped by the Fund’s support.

£2.7M

£908K

IDENTIFIED IN SPENT ON UNCLAIMED REGULAR BENEFITS AND FINANCIAL £16.5K IN ONE-OFF HELP FOR LUMP SUM PENSIONERS PAYMENTS £1.4M

We gave more than 1,000 grants to help with home repairs or adaptations. 99% of the people who received these grants said this work had improved the comfort of their day to day living either ‘a lot’ (90%) or ‘quite a bit’ (9%).

£372K

SPENT TO HELP SPENT ON WITH HOUSING FUNERAL COSTS COSTS

Before the pandemic, a trained caseworker from one of our partner organisations would visit every person who applied for

£3.3M* SPENT ON GRANTS AND SERVICES TO RAF STATIONS

~~RAF LOSSIEMOUTH: £95K RAF BOULMER: £65K RAF SPADEADAM: £2K RAF FYLINGDALES: £14K RAF SCAMPTON: £91K RAF LEEMING: £271K RAF DIGBY: £60K RAF LINTON-ON-OUSE: £40K RAF WADDINGTON: £87K RAF CONINGSBY: £173K RAF COLLEGE CRANWELL: £147K MOD STAFFORD: £3K RAF WITTERING: £195K RAF VALLEY: £51K RAF MARHAM: £63K RAF SHAWBURY: £35K RAF COSFORD: £88K RAF HONINGTON: £102K RAF BRIZE NORTON: £114K RAF WYTON: £54K RAF CORSHAM (MOD): £1K RAF HENLOW: £47K MOD ABBEY WOOD: £3K RAF HALTON: £64K MOD ST ATHAN: £7K NORTHWOOD HQ: £3K MOD BOSCOMBE DOWN: £81K RAF NORTHOLT: £166K RAF HIGH WYCOMBE: £194K RAF BENSON: £62K RAF ODIHAM: £111K RAF ST MAWGAN: £151K RAF (U) SWANWICK: £1K~~

*An additional £601K awarded across stations

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TRUSTEES’ REPORT

~~FUNDRAISING~~

Our endeavours to ensure no member of the RAF Family faces adversity alone would be impossible without the impressive fundraising efforts of our dedicated volunteers, supporters, corporate partners and staff. Thanks to their hard work and commitment, we raised an amazing £14.1M during a turbulent year, with many fundraising events cancelled.

This support from people across the UK helped over 63,700 members of the RAF Family deal with loneliness, social isolation and financial hardship, and improve their family relationships and emotional wellbeing throughout 2020.

~~THE IMPACT OF COVID-19~~

As for many charities, Covid-19 stopped us delivering on some of our planned objectives in 2020. It also hugely impacted our fundraising.

We adapted our fundraising to minimise this impact as much as possible, moving many activities online. However, as fundraising events continued to be cancelled, and legacies were impacted by delays in notifications, our income at year end stood at £14.1M – £3.9M (22%) less than our original plan.

We remain resilient, and we are adopting creative approaches to fundraising to inspire and engage our supporters, while being understanding of their needs and changing circumstances, as we navigate these uncharted waters. We hope that together, we can continue to raise the vital funds needed to positively change the lives of more RAF Family members.

~~PARTNERSHIPS~~

Despite overall income being down on 2019, we had many fundraising successes in 2020. Sharing our expertise and working in collaboration with commercial, strategic and philanthropic partners helped us accelerate progress towards our goals.

Philanthropic income reached new heights, raising £2.2M (+74% on 2019). We struck up a number of new relationships, for example with Forces Mutual, The Hobson Charity and The Scottish Wellbeing Fund. We also strengthened long-held and valued partnerships, including with MBDA Missile Systems, Mr Paul Nicholas FRAeS, BAE Systems and Midshires Mobility Group. This was against a backdrop of many corporates, trusts and individuals themselves facing difficult decisions and having to reassess priorities and cancel fundraising activities. This makes their contributions even more admirable. We are proud of all our supporters’ loyalty and commitment to our cause over the past year.

Our partners and Centenary Campaign Advisory Board members also supported us to share our message with over 443,000 people in 2020, who in turn helped us find more RAF Family members in need.

One example of how effectively engaging with partners increased our reach and income was Lockheed Martin’s support for our tribute to the 80th anniversary of the Battle of Britain. We marked the occasion with a poignant light show projected onto Remote Radar Head Buchan, a radar that was built by Lockheed Martin. This event received significant print and digital media coverage, creating over 6 million social media impressions and contributing to the more than 1,100 enquiries the Fund received between 15 September and 15 October 2020.

~~BOMBER COMMAND MEMORIAL~~

We are the proud guardians of the Bomber Command Memorial, which stands as a fitting tribute to the 55,573 Bomber Command crew who lost their lives in the Second World War. In 2020, we were delighted to reach the Bomber Command Memorial Fund fundraising target of £2M. Thanks to incredible support from Dr Michael Oliver OBE DL and other individuals, associations, trusts and businesses, the Memorial is now supported by enough funds to secure its maintenance in perpetuity. To continue to honour the memory of those who so bravely served in Bomber Command, we have created the new Bomber Command Remembrance Fund to support RAF Family members in need today.

Serving personnel continue the tradition of looking after their own, recognising the support the Fund can offer to them in their time of need. 70% made a monthly gift to the Fund through the Service Day’s Pay Giving Scheme, contributing an amazing £1.6M in 2020.

~~INDIVIDUAL SUPPORTERS~~

Individuals make a significant contribution to our funds each year (£1.6M in 2020, up 10% from 2019). In 2020 we received regular gifts from over 9,200 people (9% higher than in 2019). 2,250 new supporters chose to support the Fund with a regular gift (20% higher than our target). We also enjoyed generous support from individuals who made gifts in response to our fundraising appeals and in memory of a loved one.

Social distancing and lockdowns meant many of our plans for challenge events had to be cancelled. We are grateful to supporters for their creativity in organising their own Covidsafe fundraising events throughout 2020.

~~GIFTS IN WILLS~~

In 2020, we were extremely grateful to receive £7.7M in legacies. This was down 23% compared to 2019, mainly due to delays in receiving new notifications throughout the year due to Covid-19. Gifts in Wills represent the largest form of income for the Fund and we are deeply indebted to the people who choose to support the RAF Family in this way.

£14.1M

TOTAL RAISED INCLUDING:

£7.7M

£2.2M

RECEIVED FROM GIFTS IN WILLS

RECEIVED FROM PARTNERS, TRUSTS AND MAJOR DONORS

£1.6M

RECEIVED FROM INDIVIDUALS £1.6M

RECEIVED FROM THE SERVICE DAY’S PAY GIVING SCHEME

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TRUSTEES’ REPORT

~~SUPPORTER PROMISE~~

communicate with supporters who have given us express permission to maintain contact with them. We keep supporters up to date with our work in a way and at times that suit them. If any supporter prefers a reduced level of contact, they only have to let us know and we will respond to their wishes.

Despite the turbulent times, we remain fully committed to the principles we laid out in our fundraising promise:

We believe in being transparent in how we raise money and spend donations, and the impact this makes on the RAF Family. We take this responsibility very seriously. The Fund is registered with the Fundraising Regulator and is committed to its Code of Fundraising Practice. In all that we do, we aim to meet the highest standards, so that supporters and volunteers are able to give to and fundraise for the Fund with confidence and trust that their hard work will make a difference. In line with the Charities Act 2016, our Board of Trustees closely monitors our fundraising activity and performance alongside the fundraising management team.

~~WE ARE ACCESSIBLE~~

We want to make it easy for anyone to get in touch with our fundraising team. Whether they want to update their contact preferences, or ask a question about our work or how we spend their donation, we welcome their phone call, email or letter.

We have a complaints procedure should a supporter be unhappy or have concerns about any of our fundraising activity. This is available on our website or by contacting the fundraising team at hello@rafbf.org.uk. We will help supporters to take their complaint to the Fundraising Regulator should they feel we have not responded suitably. We record all complaints we receive in response to our fundraising. In 2020 we received 15 complaints (2019: 13). We were able to resolve these with the supporters concerned without referral to the Fundraising Regulator.

~~WE ARE OPEN, HONEST AND TRANSPARENT~~

We promise to be open, honest and transparent in relation to our fundraising and, as importantly, how accurately we represent members of the RAF Family in the materials we produce. We engage them in planning and ensure we have signoff before the materials are made available to supporters or the public.

~~RELATIONSHIPS WITH FUNDRAISING SUPPLIERS~~

~~WE ARE RESPECTFUL~~

We employ external agencies to add additional expertise or capacity when and where needed. This is more cost effective than trying to do everything ourselves. We appoint these agencies through a competitive tendering process and we put in place a contract and an agreed Service Level Agreement for the work they will carry out for us, carefully ensuring they provide the same high standards as our in-house team.

In our fundraising materials or in conversation, we show respect and we promise never to pressure anyone to make a donation. We are particularly sensitive when engaging with vulnerable people, including those who are elderly. Importantly, we do not and never have shared our supporters’ details with any other charity or business. Following the introduction of the General Data Protection Regulation in 2018, we only

~~GRANT MAKING~~

As part of our work, we provide financial support and give grants to eligible people in times of financial difficulty. Our grant making is means tested. We also provide non-financial services which any member of the RAF Family can access. Our welfare strategy is guided by research, underpinned by impact frameworks, and we measure its results through evaluation and outcomes.

~~THE PURPOSE OF OUR GRANTS~~

Where we are able to help, our grants support the RAF Family with unexpected and unaffordable one-off costs, priority bills and debts (when supported by an independent debt adviser’s report), and regular and temporary financial assistance. We also provide grants for domestic assistance to help RAF Family members live independently at home, and to help people who are isolated take part in social activities. In addition, we provide mobility and disability equipment and help with care home top-up fees, areas which saw growth in 2020. This is linked to the ageing RAF Family, and also our centenary ‘Back On The Radar’ campaign, which sought to raise awareness of our services.

We try to help people in need as much as we can. For some, this will involve a small grant, support or advice. For others, our support is much greater. Above all, we try to be caring, supportive and compassionate in all we do.

~~APPLYING FOR OUR GRANTS~~

RAF Family members can apply for individual grants throughout the year. A trained caseworker usually completes applications from former RAF personnel or their partners, with any grant usually channelled through the caseworking body.

RAF serving personnel can apply through their station HR staff, who have some delegated powers to give out smaller sums. We always consider the station staff’s recommendations as part of our holistic approach to welfare, but are not limited by them and quite often provide additional support.

To enhance accessibility, in 2020 we introduced online applications for both veterans and serving personnel. This innovation has been widely welcomed. There is a cap of £750 on online applications, but we can involve caseworkers if a beneficiary needs more support.

On request, we can also award grants to RAF stations, with the aim of increasing the overall efficiency of the RAF. By providing welfare support to meet RAF community needs, our work aims to increase morale, retention and wellbeing within the serving RAF community, including for families.

~~GIVING GRANTS TO OTHER ORGANISATIONS~~

We contract with quality organisations to deliver targeted assistance to the RAF Family. We also give discretionary grants to other charities to help them support members of the RAF Family, provided their help is consistent with our impact framework. We gave £418K to the RAF Family through these organisations during 2020.

Caseworking organisations, such as the RAF Association (RAFA) and SSAFA, investigate the majority of cases on our behalf, and moved to working virtually, rather than face-to-face, during the pandemic. We are very grateful to them and their dedicated volunteers for supporting our work.

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TRUSTEES’ REPORT

~~FINANCIAL HIGHLIGHTS~~

TOTAL INCOME £19.1M (2019: £21.4M)

Legacies: £7.7M /40% (2019: £10.1M)

Donations and other fundraising: £6.4M /34% (2019: £5.3M)

Investment income: £2.7M /14%

TOTAL EXPENDITURE £31.1M (2019: £33.5M)

Charitable activities: £22.4M /72%

(2019: £24.4M)

Direct fundraising: £3.4M /11% (2019: £3.9M)

Support costs: £5.3M /17% (2019: £5.2M)

(2019: £2.7M)

Charitable activities: £1.2M /6%

(2019: £1.8M)

Other income: £1.1M /6%

(2019: £1.5M)

CHARITABLE EXPENDITURE £26M (2019: £27.9M)

Direct support to individuals: £15.6M /60%

Welfare programmes and grants: £4.9M /19% (2019: £6.5M)

Respite care: £3.9M /15%

(2019: £4.5M)

Housing Trust support: £1.6M /6%

(2019: £2.2M)

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TRUSTEES’ REPORT

~~FINANCIAL REVIEW~~

forced to reduce their giving. However, we saw sustained or better than expected performance in direct marketing, in memory giving and with some of our high value partners and donors.

~~OVERVIEW~~

2020 was a challenging year for the Fund. The Covid-19 crisis was an exceptional event in terms of unexpectedness, rapidity and impact across all of our activities, presenting us with an uncertain future. Our 2020 financial plan rapidly became undeliverable and the Trustees agreed a revised budget that reflected the impact of the pandemic on income, our ability to support our beneficiaries, expenditure, and our existing financial obligations.

As a charity with a comparable purpose, we were fortunate to receive a £1M grant from the Headley Court Charity. We also received Covid-19 support from the Armed Forces Covenant Fund of £159K. We received a £594K grant under the Government’s Coronavirus Job Retention (Furlough) Scheme. We were able to curtail our yearon-year fall in income from donations and legacies to £1.3M because of these one-off income receipts.

Supplementing our income with reserves, our investment strategy prior to the crisis, agile financial management and, of course, the continued support of donors and the serving RAF meant we could stay resilient and continue to support our beneficiaries.

Again in 2020, support from the serving RAF was stable, generating £1.6M (2019: £1.5M) through the Service Day’s Pay Giving Scheme.

The uncertainty we face makes spending donations wisely more important than ever. We want to make sure that our activities make maximum impact and we focus on those most in need. At the same time, we are focusing on securing the Fund’s longterm financial viability so we can continue to support veterans, serving RAF and their families in the future.

Gross investment income (excluding our joint venture share) was £2.9M (2019: £2.7M) and the 6% increase on the previous year was possible because our investment managers were able to maintain income distributions in spite of market turbulence in 2020.

Charitable activities income comprises mainly of Housing Trust rental income and respite care income. We maintained income from the Housing Trust (£993K in 2020 vs £1M in 2019). However, we saw a significant decrease in respite care income (£746K in 2019 to £181K in 2020) as a result of the hibernation then closure of Princess Marina House. The consequent risk to our guests posed by the pandemic, the cost of keeping the facility ticking over for an undefined period, allied with the long forecast decline in the size of the RAF Family, sadly compelled our Board of Trustees to take the decision to close Princess Marina House permanently, and the majority of staff left us on 30 September 2020.

~~INCOME~~

Total income in 2020 was £19.1M, £2.3M (11%) lower than the £21.4M generated in 2019. £18.3M (2019: £20.9M) representing 95% (2019: 98%) of total income received was unrestricted. Of the £19.1M raised, 75p in the pound was spent on charitable activities.

In 2020, £14.1M (2019: £15.4M) was received from legacies, donations and other fundraising, making up 74% (2019: 72%) of total income. Legacy income in 2020 was £7.7M (2019: £10.1M) and this £2.4M decrease was the largest cause of the yearon-year fall in income. The pandemic led to the cancellation of many fundraising events and activities and some donors were

~~INCOME £19.1M~~

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2019
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15
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6.4 5.3
2.7 2.7
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0
Total income Legacies Donations and other fundraising Investment income Charitable activities Other income
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£509K (2019: £540K) of fundraising expenditure was from funds designated for fundraising development to sustain our income generation capability.

~~EXPENDITURE~~

Total expenditure in 2020 was £31.1M (2019: £33.5M), a £2.4M or 7% year-onyear decrease. In response to the impact of Covid-19, we took action to reduce costs as far as possible, without adversely affecting the support we provided to beneficiaries during a difficult time. The pandemic itself restricted some of our activities resulting in a reduction in costs, and sadly resulted in the closure of Princess Marina House. Expenditure in the year was funded by a combination of income generated in year, government grant funding and from reserves.

In 2020, 84% (2019: 83%) of total expenditure – representing £26M (2019: £27.9M) – was on charitable activities. Our activities include financial support to individuals, providing welfare services mainly through third parties, awarding grants to RAF stations and organisations who support the RAF Family, respite care and providing affordable and adapted housing.

£15.6M (2019: £14.7M), representing 60% (2019: 53%) of our expenditure on charitable activities was to directly support individuals from both the serving and veteran communities, an increase of £810K or 5%. During the year, we experienced a high demand for regular and temporary financial assistance and applications for domestic assistance, social inclusion and funeral grants. The increases were related to the effect of the pandemic on the personal

We spent £5.1M (2019: £5.5M) on raising funds, of which £3.4M (2019: £3.9M) was direct expenditure on raising income. Allocated support costs came to £1.7M (2019: £1.7M). There were expenditure reductions associated with cancelled fundraising activities, but we took advantage of opportunities to invest towards gaining medium- to long-term income returns.

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TRUSTEES’ REPORT

~~EXPENDITURE ON CHARITABLE ACTIVITIES £26M~~

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15.6 14.7
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Total charitable expenditure Support to individuals Programmes and grants Respite care Housing Trust support
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FIVE YEAR ANNUAL CHARITABLE EXPENDITURE

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circumstances of both working- and pensionage beneficiaries. The money spent on individuals included £1M centenary campaign expenditure, aimed at finding RAF veterans and their families who need our support.

in applications due to operational pressures. We gave a total of £52K to RAF stations in the form of Covid-19 grants.

Grant funding to support the veteran community was £690K (2019: £850K). In the year we spent £3.9M (2019: £4.5M) on providing respite care, including £2.8M on operating and closing costs for Princess Marina House. We spent £415K to acquire a property to be used for our respite and care offering which will be part of our continuing work in this area.

We spent £1.9M (2019: £3.6M) on supporting the serving RAF by awarding grants to stations and funding services offered by third-party organisations in support of our beneficiaries. The most significant of these services in financial terms was Airplay, our youth support programme. The year-on-year decrease in our spending on the serving RAF was due in part to agreed specific project funding arrangements, with higher funding in 2019 than in 2020; a reduction in programme funding due to Covid-19 restrictions and pressures; and a general fall

Total support costs allocated, including the costs of IT, administration and management, premises, governance, depreciation of fixed assets, finance, human resources and system improvements, came to £5.4M (2019: £5.2M).

~~HOUSING AND LOANS~~

Through our subsidiary the RAF Benevolent Fund Housing Trust Limited, we purchase and adapt houses to meet individual needs and then rent them at affordable rates. In 2020, we spent £1.6M (2019: £2.2M) on maintaining and adapting such properties. We purchased and adapted three new properties (2019: five) at a cost of £928K (2019: £1.9M) and sold six properties (2019: 10) realising £1.5M (2019: £2.2M) in sales proceeds and £874K (2019: £1.5M) in net gain.

We awarded £109K (2019: £135K) in new secured loans to beneficiaries. Repayments are determined on the basis of an individual’s ability to repay the loan and we received £776K (2019: £900K) in loan repayments. The total value of loans to beneficiaries at the end of the year was £8.6M (2019: £9.3M). We proactively review our loan book to ensure that the value is not impaired, and the recoverability of balances is assessed and reported fairly.

~~INVESTMENTS~~

We take a total return approach to our investment portfolio and our policy is to enhance the value of investments as well as earn an appropriate return through the adoption of a managed, diversified portfolio at acceptable levels of risk. The main objectives of the policy are:

The Finance Committee has responsibility for reviewing the policy.

BlackRock Investment Management (UK)

Limited and CCLA Investment Management Limited have managed our long-term portfolios since 2016. In 2019, we appointed Close Brothers Asset Management to manage the funds we would need to spend over three years. Our medium-term objective is to ensure our liquidity requirements are met while still achieving good returns.

Assets held with fund managers were valued at £77.7M (2019: £81.7M). Income yield from these investments was £2.6M (2019: £2.3M).

Our funds managed by BlackRock are in the Armed Forces Charities Growth and Income Fund, a Charity Authorised Investment Fund. The value of our investments in this fund on 31 December 2020 was £20.4M (2019: £19.4M). The Fund aims to provide a net return on investment over a period of five or more consecutive years beginning at the point of investment, generated through an increase to the value of the assets held by the Fund and income received from those assets. The Fund has a flexible approach to asset allocation and seeks to achieve its investment objective through a variety of asset classes. The Fund is actively managed in accordance with our Investment Policy. Over the year a net return of 9.01% was achieved against a 3.8% benchmark. Dividend yield in the 12 months to 31 December 2020 was 3.5% (2019: 3.5%).

Our funds managed by CCLA are held in the COIF Charities Investment Fund. The value of our investments in this Fund on 31 December 2020 was £34.4M (2019: £32.3M). The investment objective of the Fund is to provide real long-term growth and an income, rising over time from a portfolio managed within a clear risk control framework. To meet these objectives, the portfolio has a bias towards real assets, predominantly global equities, but also property and to non–traditional areas such as infrastructure. Stock selection is on a ‘bottom-up’ basis, and companies with a robust financial position and the potential

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to grow faster and more consistently are favoured more than the broad trend in the economy. Over the year a net return of 9.78% was achieved against a 3.95% benchmark. Dividend yield in the 12 months to 31 December 2020 was 2.9% (2019: 3.1%).

Our investments managed by Close Brothers Asset Management are invested in a bespoke portfolio of short dated, high quality corporate bonds with a bespoke maturity profile to meet liquidity requirements. All maturities are expected to be met and the income paid out is expected to be in line with the original expectations. The value of the portfolio on 31 December 2020 was £23M (2019: £30M). The net yield on this portfolio in the year was 2.4%.

The RAF Benevolent Fund is the charity trustee of The Royal Air Force Disabled Holiday Trust (DHT). DHT held property investments valued at £532K on 31 December 2020 (2019: £561K).

2020 was an extraordinary year for investments as Covid-19 caused investment values to plummet sharply between March and May and then start to improve after that. This improvement in prices gained pace over the rest of the year due to unprecedented levels of stimulus coming from major governments and central banks, a reduction in fatality and hospitalisation rates and the emergence of a vaccine. The value of our long-term investments fell by 16% (£8M) in Q1 2020. Unrealised gains on investments at the year end at £2.6M (2019: £11.9M) were 78% lower than in 2019.

~~RESERVES~~

Total funds as at 31 December 2020 were £110M (2019: £122.8M) and comprised of unrestricted funds of £97.9M (2019: £109.7M) and restricted and endowment funds of £12M (2019: £13.1M).

Unrestricted reserves included operational assets of £40.9M (2019: £41.9M), designated funds of £17.4M (2019: £23.7M) and free reserves of £39.6M (2019: £44.1M).

Our risk-based approach to determining our free reserves requirement is done in conjunction with long-term financial projections, based on the needs of the RAF Family, and the management of financial risks, particularly the uncertainty of future income.

Trustees review the level of reserves regularly to ensure funds are available to deliver welfare services and programmes, and to secure, as far as possible, future financial viability. Our annual review of reserves included assessing the impact of Covid-19 on our business plans, projected income and expenditure, and on our investments.

Following that review, we determined that we should hold a minimum of £30M in free reserves to be assured that we are able to sustain the support we provide to the RAF Family in these unprecedented times and in the long term as well as meet other obligations, irrespective of fluctuations in income.

Free reserves excluding operational assets used to deliver our charitable objectives were £39.6M (2019: £44.1M) at the end of December 2020. The £4.5M decrease includes a £2.8M increase in the pension deficit.

Prior to the pandemic we had a deficit budgeting strategy that allowed us to expand our welfare offer to our beneficiaries. We will continue to do this over the next few years but as this strategy is unsustainable in the long term, we have started to reset and move towards more balanced financial planning. Trustees are of the view that our current level of free reserves gives assurance that we are able to deliver our short- to medium-term strategy to support our beneficiaries, in the current environment.

Designated funds were £17.4M (2019: £23.7M). £10.4M of this represents reserves set aside by Trustees for the development of welfare initiatives and the enhancement of existing programmes in response to beneficiary need. They will also be used for fundraising development investments to

help us sustain and grow our medium- to long-term income-generating capacity, and the modernisation of infrastructure and systems. £7M (2019: £6.5M) reserves of the Dependants Fund have also been designated to meet obligations to RAF personnel who are subscribers to the Fund.

In 2020, total expenditure from designated funds was £7.1M (2019: £8.3M). This expenditure included £5M (2019: £4.7M) on welfare services and support, £1.1M (2019: £2.5M) on reaching new beneficiaries, £509K (2019: £540K) on fundraising development and £252K (2019: £190K) on our finance system and new website, underpinning our digital strategy.

In response to the current and future impact of Covid-19, Trustees took the decision to significantly reduce the spending on reaching out to new beneficiaries through an advertising and PR campaign. Funds previously designated to that campaign, unspent at the end of the year, will now be used for welfare support and services. The Dependants Fund reserves increased by £505K (2019: £958K) due to the market gains on investments of £406K (2019: £929K) and a £99K operating surplus (2019: £29K).

Restricted funds representing the unexpended balance of funds received for specific charitable activities were £5.7M (2019: £7.1M).

Endowment funds including both permanent and expendable funds were £6.3M (2019: £6M).

These funds represent income donated to the Fund but subject to the condition that the capital remains unspent. The increase in the year was due to capital gains on invested funds.

The Trustees are assured that the Fund has adequate resources to continue to operate for the foreseeable future and the Fund

therefore continues to adopt the going concern basis in preparing its financial statements.

Performance against the Reserves Policy is monitored during the year as part of regular financial management.

~~PENSION DEFICIT~~

Under FRS 102 the closed defined benefit pension scheme had a deficit of £16.5M (2019: £13.7M). The 2017 triennial valuation of the scheme was a deficit of £3.7M, based on valuation assumptions and an agreement to provide 67 Portland Place W1B 1AR as a contingent asset to the pension fund as security for deficit funding obligations. The building was valued at £11M.

Under the current deficit recovery plan we are obliged to make annual deficit contributions of £500K until 31 July 2024. To support the Staff Pension Fund during the Covid-19 crisis in 2020, our Trustees agreed to accelerate the payment of deficit contributions. £1M was contributed to the pension fund in 2020 (2019: £500K). The 2020 triennial valuation is planned to be completed by the end of 2021.

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TRUSTEES’ REPORT

~~STRATEGIC RISK MANAGEMENT~~

The negative impact of Covid-19 on our own operations and on the wider sector has exposed us to additional risk by reducing our ability to deliver certain services and impeding our efforts to generate fundraising income. It has also meant staff largely working from home, which needs greater governance and wellbeing oversight. We are managing this by:

The Board of Trustees has overall responsibility for the management of risk in the Fund and in its subsidiary entities. That responsibility is, in part, delegated to the Finance Committee which exercises oversight on the Board’s behalf by receiving regular reports, providing recommendations and updating the Board, which then discusses strategic risks at each Board meeting. The Fund’s senior management team manages day-to-day risks, regularly assessing these and the associated management procedures.

Our reputation as the RAF’s leading welfare charity continues to be our most significant risk as well as one of our greatest assets. Our reputation is carefully guarded by, among other things:

On the opposite page is an overview of our other major risks together with corresponding high-level mitigating actions.

RISKS HOW WE MANAGE THESE RISKS
Governance risks
Failure to comply
with our regulatory
obligations, noting
the additional risks as
a result of extended
remote working		 • We select Trustees and staf using skills-based and rigorous
recruitment processes.
• We ofer appropriate support for staf capacity, resilience and
wellbeing.
• We have strong internal communication and management
processes.
• We promote a culture of openness and constructive challenge,
giving staf the training and support necessary to identify and
combat wrongdoing.
• We use the Charity Governance Code as our primary guidance
framework for evaluation, regularly updating our policies and
processes in turn.
Welfare delivery risks
Failure to deliver timely
and efective support
to anyone in the RAF
Family who is in need		 • In 2020 we reviewed the benefciary journey to getting support
and have identifed and implemented improvements.
• We ofer a wide range of fnancial and non-fnancial services
and regularly review their efectiveness and the need for new
services.
• We undertake research and regularly seek feedback to assess
and improve our welfare ofer.
• We underpin our welfare strategy with commissioned research
and use pilot projects to evaluate the viability of our response to
emerging needs as appropriate.
Weakness in third-
party welfare delivery		 • We maintain strong relationships with our caseworking partners
and third-party welfare providers and engage with other Service
charities to benchmark and share best practice.
• We have established ‘warm transfers’ of benefciaries between
the Fund and RAFA.
• New Welfare Navigators will help us have greater oversight
over the provision of support and identify issues at the earliest
possible stage.
• A new pilot establishing a limited in-house caseworking
functionality to address complex cases is planned for 2021.

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TRUSTEES’ REPORT

Increased competition • We continue to diversify our income base to reduce reliance on in the charity any one stream. sector for support • We focus on our impact and telling the stories of the people we (many charities are help. restructuring due to reduced income • We engage closely with the senior leadership of sister charities to and the number of avoid overlap and competition where possible. urgent and emergency appeals remains high)

RISKS HOW WE MANAGE THESE RISKS
Financial risks
Long-term fnancial
sustainability		 • We are reviewing our fnancial strategy and long-term fnancial
projections with a view to ensuring we have the fexibility in our
operating model to remain fnancially stable while meeting the
needs of the RAF Family.
• Our Trustees regularly review our Reserves Policy.
• We closely and carefully monitor cash fow projections.
Investment risks • Our investment strategy ofers protection from short-term
market volatility. Also, the investment strategies we have in place
ensure that our liquidity requirements are met and good returns
are achieved with medium-level risk.
• Our Finance Committee regularly reviews our investment
performance.
The new defned
beneft funding code
driving increased
contributions to meet
the Fund’s obligations
to the Staf Pension
Fund, thereby diverting
resources that could
be spent on supporting
benefciaries		 • We have improved the governance arrangements for the Staf
Pension Fund, including the appointment of a Sole Professional
Trustee.
• We have a clear strategy for completing the next triennial
valuation of the pension defcit.
• We take appropriate professional advice to inform our position.
Safeguarding risks
Failure to protect
vulnerable people
(both internally and
in the Fund’s external
activities)		 • We ensure staf and Trustees have a strong awareness of our
safeguarding policies, which are robust and regularly reviewed.
• Key staf members have been allocated responsibility for
ensuring the Fund meets best practice and have been given
additional training.
• Safeguarding updates are provided at every Board meeting.
• Our Board has a dedicated Safeguarding Lead Trustee with the
necessary expertise to assist them with safeguarding matters.
• In 2020 we established a Safeguarding Committee to provide
further oversight and guidance.

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35

TRUSTEES’ REPORT

~~STRUCTURE, GOVERNANCE AND MANAGEMENT~~

adapt to macro changes and understand

~~REFERENCE AND ADMINISTRATIVE DETAILS~~

and respond to the needs of the RAF Family. Trustees and non-Trustee committee members are generally recruited through advertisements in the media and via a range of digital networks, and are considered by a Nominations Committee on behalf of the Board of Trustees and the Council. Each new Trustee is provided with a briefing pack and an individual induction programme is agreed and implemented covering all aspects of the role, their responsibilities, the requirements of the regulators and the work of the Fund.

The Royal Air Force Benevolent Fund has the Charity Commission registration number 1081009. As the Fund owns land and properties in Scotland, it is also registered with the Office of the Scottish Charity Regulator to comply with the Charities and Trustee Investment (Scotland) Act 2005; the registration number is SCO38109. The restricted and endowed funds of the Fund have a separate registration number, 207327. The Fund is also registered as a Royal Charter Company with the Companies House registration numbers ZC000201/RC000773.

The Board, either as a whole or through its subcommittees, also receives ongoing briefings and training from senior management and external advisers in critical areas such as risk management, reserves, fundraising practices, safeguarding and data protection.

In accordance with the provisions of Section 96 of the Charities Act 1993 (now replaced by Section 20 of the Charities Act 2011), the Charity Commission has previously directed that for all or any of the purposes of the Act, the two charities, having the same charity Trustees, are to be treated as a single charity.

The Board of Trustees consists of no fewer than 10 and no more than 15 Trustees, reflecting a mixture of those who have served in the RAF and those who have a background in industry, law, commerce or other sectors. The Board is assisted by committees overseeing welfare, finance, fundraising and communications, and remuneration activities, and is aided by a number of advisory bodies; the terms of reference for the Board and these committees are reviewed annually to ensure that compliance and relevance are maintained. The terms of reference for the Safeguarding Lead Trustee and the Senior Independent Trustee (who acts as a sounding board for the Chair and as an alternative route for consultation or conflict resolution for either the Trustees or executive should normal channels be unsuitable) are also reviewed annually.

The RAF Benevolent Fund group also encompasses other entities, details of which can be found at the back of this report.

~~STRUCTURE AND GOVERNANCE~~

The Fund, which was set up in 1919, was incorporated by Royal Charter in 1999. Trustees are appointed by the Council for a four-year term, after which they are eligible for re-election for a further four-year term. Trustees may not hold office for a continuous period exceeding eight years without the consent of the Board.

New Trustees are selected with a view to ensuring that the Board has an appropriate balance of skills, backgrounds and experience relevant to our strategic and operational requirements. We continue to be guided by our Diversity Policy to ensure that the Board is sufficiently diverse to

The Board is responsible for our strategic direction and, through its committees, for

monitoring the activities of the executive staff. It reviews the position of the Fund and receives reports from the committees and the Senior Management Team, led by the Controller. The Board also conducts annual performance reviews of the Controller and the Chair of the Board of Trustees, and undergoes its own periodic Board appraisal. The Board met nine times in full session in 2020, including a meeting to discuss Board effectiveness following the completion of a review, a strategy session, and three extraordinary meetings to discuss, among other things, the impact of Covid-19 and the decision to close Princess Marina House.

The Board is responsible for approving the annual business plan and a range of supporting strategies. The Controller and Directors review strategic and policy matters through the Senior Management Team and make recommendations to the Board as appropriate. The Controller, as our Chief Executive, is responsible for the day-to-day management of the Fund’s affairs.

We believe that good governance is key to the ongoing success of the organisation. In terms of maintaining high standards of governance, and on the back of the full adoption of the Charity Governance Code and a full external review of its governance practices in 2017, we have further reviewed and strengthened our governance practices in 2020. The Director of Governance acts as the executive focal point for all our governance matters and is strongly engaged with the Charity Commission, peer charities and other key interlocutors to ensure that best practice in sector is incorporated.

~~STAFF REMUNERATION POLICY~~

We continue to be strongly committed to recruiting, developing and retaining people with the necessary skills, experience and mindset to deliver our objectives and the ability to make a positive contribution.

Mindful of internal and external pressures, we believe making effective decisions in relation to remuneration and reward is

crucial and central to the continued success of our overall aims.

Our Remuneration Policy centres on the following principles:

We enhance our competitive positioning by promoting a ‘total reward’ approach, recognising that broader aspects of employment offers (for example, nonfinancial benefits such as flexible working, modern leave arrangements and development opportunities, as well as the intrinsic moral value of working for a progressive charity) are of increasing value to employees.

~~REMUNERATION REVIEW~~

We have a Remuneration Committee, composed of three Trustees, which reviews our Remuneration Policy annually to ensure that the principles outlined above are adhered to and remain appropriate. At the Remuneration Committee meeting, as well as reviewing our pension and broader reward provision, the Committee also considers an annual pay award, the specific purpose of which is to take account of changes in pay movement elsewhere, the prevailing cost pressures bearing on employees and to reward sustained or heightened contribution in role.

To support these decisions, the Remuneration Committee has available data through XPertHR’s annual third sector salary and benefits surveys. All recommendations are then submitted to the Board of Trustees’ end of year meeting for approval. In November 2020, having regard to the challenging external circumstances, the actions of comparators in the private and broader sector, and the Fund’s own financial position, the Trustees froze staff salaries for the 2021 salary year.

36

37

TRUSTEES’ REPORT

~~STATEMENT OF TRUSTEES’ RESPONSIBILITIES~~

The Trustees are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of the Fund and the group and of the incoming resources and application of resources of the Fund for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Fund and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 and the provisions of its Royal Charter.

They are also responsible for safeguarding the assets of the Fund and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware:

~~TRUSTEE DECLARATION~~

Trustees hereby approve the 2020 Annual Report

Lawrie Haynes, Chair, Royal Air Force Benevolent Fund

Signed on 16 June 2021

~~PRINCIPAL PROFESSIONAL ADVISERS~~

Independent auditor

Saffery Champness LLP 71 Queen Victoria Street London EC4V 4BE

Bankers

Barclays Bank plc 1 Churchill Place London E14 5HP

Actuary

Broadstone Corporate Benefits Limited 55 Baker Street London W1U 7EU

Solicitors

Charles Russell Speechlys LLP 5 Fleet Place London EC4M 7RD

Investment managers

BlackRock Investment Management (UK) Limited 12 Throgmorton Avenue London EC2N 2DL

CCLA Investment Management Limited Senator House 85 Queen Victoria Street London EC4V 4ET

Close Brothers Asset Management 55 Grosvenor Street London W1K 3HY

38

39

INDEPENDENT AUDITOR’S REPORT

~~INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES~~

~~OPINION~~

~~BASIS FOR OPINION~~

We have audited the financial statements of the Royal Air Force Benevolent Fund (the ‘parent charity’) and its subsidiaries (the ‘group’) for the year ended 31 December 2020 which comprise the consolidated statement of financial activities, the consolidated and charity balance sheets, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~~CONCLUSIONS RELATING TO GOING CONCERN~~

In our opinion the financial statements:

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group or the parent charity’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

and

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

~~OTHER INFORMATION~~

The Trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

~~MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION~~

We have nothing to report in respect of the following matters in respect of which the Charities (Accounts and Reports) Regulations 2008 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

~~RESPONSIBILITIES OF TRUSTEES~~

As explained more fully in the statement of Trustees’ responsibilities set out on page 38, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the group and the parent charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the group or the parent charity or to cease operations, or have no realistic alternative but to do so.

~~AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS~~

We have been appointed as auditors under the Charities Act 2011 and the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under those Acts.

Our objectives are to obtain reasonable assurance about whether the group and parent charity financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

40

41

INDEPENDENT AUDITOR’S REPORT

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent charity’s financial statements to material misstatement and how fraud might occur, including through discussions with the Trustees, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent charity by discussions with informed management and updating our understanding of the sector in which the group and parent charity operates.

Laws and regulations of direct significance in the context of the group and parent charity include the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005, the Charities (Accounts and Reports) Regulations 2008, the Charities Accounts (Scotland) Regulations 2006 (as amended) and guidance issued by the Charity Commission for England and Wales and the Office of the Scottish Charity Regulator.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the parent charity’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant

authorities to identify potential material misstatements arising. We discussed the parent charity’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or had knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report.

~~USE OF OUR REPORT~~

This report is made solely to the parent charity’s Trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008 and Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the parent charity’s Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent charity and the parent charity’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Saffery Champness LLP

Chartered Accountants

Statutory Auditors

71 Queen Victoria Street, London EC4V 4BE

Date: 16 July 2021

Saffery Champness LLP is eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006

42

43

FINANCIAL STATEMENTS

~~FINANCIAL STATEMENTS~~

CONSOLIDATED STATEMENT

OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2020

----- Start of picture text -----
2020 2019
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Income and endowments from
Donations and legacies 12,864 857 - 13,721 14,071 836 - 14,907
Charitable activities 1,212 20 - 1,232 1,853 19 - 1,872
Other trading activities 360 - - 360 443 14 - 457
Investments 2,748 (3) - 2,745 3,073 (377) - 2,696
Other income 1,080 - - 1,080 1,507 - - 1,507
Total income 2 18,264 874 - 19,138 20,947 492 - 21,439
Expenditure on raising funds 5,096 11 - 5,107 5,540 - - 5,540
Expenditure on charitable activities
Direct support to individuals 14,950 606 - 15,556 14,251 495 - 14,746
Welfare programmes and grants 4,254 642 - 4,896 5,865 629 - 6,494
Respite care 3,494 436 - 3,930 4,103 374 - 4,477
Housing Trust support 1,465 181 - 1,646 2,208 28 - 2,236
- -
24,163 1,865 26,028 26,427 1,526 27,953
Total expenditure 3 29,259 1,876 - 31,135 31,967 1,526 - 33,493
- -
Net expenditure before gains (10,995) (1,002) (11,997) (11,020) (1,034) (12,054)
on investments
Transfers between funds 415 (415) - - - - - -
Net gains on investments 11 2,250 69 292 2,611 10,987 199 742 11,928
Net (expenditure)/income (8,330) (1,348) 292 (9,386) (33) (835) 742 (126)
Other recognised gains and losses
Actuarial losses on defined benefit 15 (3,538) - - (3,538) (1,596) - - (1,596)
pension scheme
Net movement in funds (11,868) (1,348) 292 (12,924) (1,629) (835) 742 (1,722)
Total funds brought forward 109,727 7,076 6,027 122,830 111,356 7,911 5,285 124,552
Total funds carried forward 22 97,859 5,728 6,319 109,906 109,727 7,076 6,027 122,830
Note Unrestricted funds Restricted funds Endowed funds Total Unrestricted funds Restricted funds Endowed funds Total
----- End of picture text -----

The notes on pages 47 to 79 form part of the financial statements. All amounts relate to continuing operations. All gains and losses recognised in the year are included in the statement of financial activities.

CONSOLIDATED AND CHARITY

BALANCE SHEETS AS AT 31 DECEMBER 2020

----- Start of picture text -----
Note Group Group Charity Charity
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Fixed assets
Intangible assets 9 274 249 274 249
Tangible assets 10 32,059 32,383 8,805 8,796
Investments 11 78,255 82,390 71,528 75,953
Loans to beneficiaries 12 8,593 9,305 8,593 9,305
119,181 124,327 89,200 94,303
Current assets
Stock 6 5 - -
Debtors and prepayments 13 7,273 7,869 18,412 19,980
Cash at bank and in hand 3,393 7,241 2,164 5,814
10,672 15,115 20,576 25,794
Current liabilities
Creditors and accrued charges: 14 (3,416) (2,884) (3,044) (2,764)
amounts falling due within one year
Net current assets 7,256 12,231 17,532 23,030
Net assets excluding long-term 126,437 136,558 106,732 117,333
liabilities and pension liability
Defined benefit pensions liability 15 (16,531) (13,728) (16,531) (13,728)
Total net assets 109,906 122,830 90,201 103,605
Funds
Endowment funds 6,319 6,027 6,319 6,027
Restricted funds 5,728 7,076 5,728 6,961
Designated funds 17,404 23,690 10,387 17,178
General funds 96,986 99,765 84,298 87,167
Pension reserve (16,531) (13,728) (16,531) (13,728)
22 109,906 122,830 90,201 103,605
----- End of picture text -----

Approved by the Board of Trustees on 16 June 2021 and signed on its behalf by

Lawrie Haynes, Chair, Board of Trustees

44

45

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

----- Start of picture text -----
2020 2019
£’000 £’000
Net cash used in operating activities (13,987) (13,315)
Cash flows from investing activities
Dividends and interest from investments 2,860 2,674
Proceeds from the sale of property 1,538 2,716
Purchase of property and equipment (1,557) (2,082)
Net proceeds from (purchase)/sale of investments 6,631 12,346
Net cash provided by investing activities 9,472 15,654
Cash flows from financing activities
Loans awarded (109) (135)
Loan repayments 776 900
Net cash provided by financing activities 667 765
Change in cash and cash equivalents in the year (3,848) 3,104
Cash and cash equivalents as at 1 January 7,241 4,137
Cash and cash equivalents as at 31 December 3,393 7,241
Reconciliation of net income to net cash flow from operating activities
Net expenditure for the year ended 31 December (9,386) (126)
Adjustments for:
Depreciation charges and amortisation 1,185 1,257
Gains on investments (2,611) (11,928)
Income attributable from joint venture 115 478
Dividends and interest from investments (2,860) (2,674)
Profit on the sale of fixed assets (867) (1,280)
Loan interest (57) (104)
Loans converted to grants 74 17
Loans written off 28 2
Increase in stock (1) 3
Decrease in debtors 596 622
Increase in creditors 532 581
Pension interest expense 265 337
Pension fund costs (1,000) (500)
Net cash used in operating activities (13,987) (13,315)
Analysis of cash and cash equivalents
Current accounts 3,393 7,241
Total cash and cash equivalents 3,393 7,241
----- End of picture text -----

Analysis of changes in net debt

----- Start of picture text -----
At 1 January Cash flows At 31 December
2020 2020
£’000 £’000 £’000
Cash – current accounts 7,241 (3,848) 3,393
At 1 January Cash flows At 31 December
2019 2019
£’000 £’000 £’000
Cash – current accounts 4,137 3,104 7,241
----- End of picture text -----

~~NOTES TO THE FINANCIAL~~ FOR THE YEAR ENDED 31 DECEMBER 2020 ~~STATEMENTS~~

1 PRINCIPAL ACCOUNTING POLICIES

These are the financial statements of the RAF Benevolent Fund and its related entities. The Charity was incorporated by Royal Charter in England and Wales on 29 December 1999. The Trustees of the Charity are named on page 2. The registered office is 67 Portland Place, London W1B 1AR.

value, and in accordance with applicable accounting standards.

The financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

The Charity is a public benefit entity for the purposes of FRS 102 and therefore the financial statements have been prepared in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (Charities SORP (FRS 102)), the Charities Act 2011 and the Charities Accounts (Scotland) Regulations 2006.

~~BASIS OF PREPARATION~~

The consolidated financial statements have been prepared to give a true and fair view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved following the Statement of Recommended Practice (FRS 102) rather than Accounting and Reporting by Charities: Statement of Recommended Practice (revised 2005) which has been withdrawn.

The statement of financial activities (SOFA) and balance sheet consolidate the financial statements of the Charity and its subsidiary undertakings. The results of the subsidiary entities are consolidated on a line by line basis. A summary of the results of the subsidiary entities is shown in Note 26.

~~ACCOUNTING CONVENTION~~

These financial statements have been prepared on a going concern basis under the historical cost convention, with the exception of investments which are included at market

46

47

FINANCIAL STATEMENTS

The Group’s share of net income of the joint venture (20%) is accounted for using the equity method and is shown in the consolidated SOFA with the share of net assets shown on the balance sheet as an investment.

~~FUNCTIONAL CURRENCY~~

The Charity’s functional and presentational currency is GBP and is shown as £’000s in the financial statements.

~~GOING CONCERN~~

The Trustees have assessed whether the use of the going concern basis is appropriate, particularly after taking the impact of the Covid-19 pandemic into account. They have reassessed the business plans, income and expenditure projections, and taken the Charity’s reserves levels into account. Their conclusion is that there is no doubt about the Charity’s ability to continue operating as a going concern.

The Trustees have made this assessment for a period of at least one year from the date of approving the financial statements and are assured that the Charity has adequate resources to continue to operate for the foreseeable future.

The Charity therefore continues to adopt the going concern basis in preparing its financial statements.

~~FUND ACCOUNTING~~

General funds are unrestricted funds that are available for use at the discretion of the Trustees in furtherance of the general objects of the Charity and that have not been designated by the Trustees for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of the designated funds are set out in the notes to the financial statements.

Restricted funds are funds that are to be used in accordance with specific restrictions imposed by donors or that have been raised by the Charity for particular purposes. The

costs of raising and administering such funds

are charged against specific funds. The aim and use of the larger restricted funds is set out in the notes to the financial statements.

Endowment funds are either permanent or expendable. Permanent funds are normally held indefinitely, while Trustees have the power to convert expendable funds into income. These funds are set out in Note 25. The return on endowment investments is made up of income earned and gains or losses in the market value of the investments.

Income generated from endowment funds is spent on charitable activities. Investment income and gains are allocated to the appropriate fund.

~~RECOGNITION OF INCOME~~

Income is recognised in the SOFA when the Charity becomes entitled to it, it is more likely than not that the income will be received, and the monetary value of the income can be estimated with sufficient accuracy. Entitlement to legacy income is assumed when there is sufficient evidence that a gift has been left to the Charity, usually through the notification of a Will. Receipt of legacy income is deemed probable when there has been a grant of probate, and it has been established that there are sufficient assets in the estate to pay the legacy and there are no conditions attached to the legacy that are outside the control of the Charity or uncertainty around receipt of this gift. Income from pecuniary legacies is recognised upon notification or receipt if earlier.

Gifts donated for resale are included as income when they are sold. No amounts are included in the financial statements for services donated by volunteers.

~~RECOGNITION OF EXPENDITURE~~

Expenditure is recognised in the SOFA on an accrual basis when an obligation that can be measured or reliably estimated exists at the reporting date and it is more than likely that payment will be paid in settlement.

Two main categories of expenditure shown in the SOFA are expenditure on raising funds

and expenditure on charitable activities. Expenditure on raising funds includes all expenditure incurred to raise voluntary income to spend on charitable purposes as well as investment management fees. Expenditure on charitable activities includes all costs incurred by the Charity in carrying out its charitable aims to support the beneficiaries of the Fund.

~~SUPPORT COSTS~~

Support costs have been classified as: information technology and facilities, depreciation, general management and administration, finance and payroll, HR and governance. These costs have been allocated to activities on a basis consistent with the use of resources, and indirect costs have been apportioned on a headcount basis or in proportion to direct costs or income.

~~GRANT COMMITMENTS~~

Grants awarded are expensed in the SOFA in the year in which they are approved by the Trustees and the offer is conveyed to the recipient. Grants awarded but not paid are recorded as a liability within the balance sheet.

~~TANGIBLE FIXED ASSETS AND DEPRECIATION~~

Tangible fixed assets costing more than £1K (£5K in the RAF Benevolent Fund Housing Trust Limited) are capitalised and included at cost, including any incidental expense of acquisition.

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost on a straight-line basis over their expected useful economic lives as follows:

• Freehold land – nil

A full year’s depreciation is provided in the year of asset acquisition, and none in the year of disposal.

~~INTANGIBLE FIXED ASSETS AND AMORTISATION~~

Software is classified as an intangible fixed asset and is capitalised where the cost plus incidental expenses incurred in acquisition is more than £1K.

Amortisation is provided on intangible fixed assets to write off the capitalised value on a straight-line basis over three years. A full year’s amortisation is provided in the year of asset acquisition, and none in the year of disposal.

~~FOREIGN CURRENCIES~~

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities are retranslated at the exchange rate ruling at the balance sheet date. All differences are taken to the SOFA.

~~RELATED PARTY DISCLOSURES~~

The Charity has made the required disclosures in accordance with the Charities SORP (FRS 102).

Transactions with group undertakings are eliminated on consolidation.

~~INVESTMENTS~~

Investments are stated at market value at the balance sheet date. The SOFA includes the net gains and losses arising on revaluation and disposals throughout the year. Income receivable on investments is recognised in the SOFA on the accruals basis.

~~JOINT VENTURE~~

The RAF100 Appeal (Registered Charity 1167398; Company Registration: 9977273) was formed to bring the four major RAF

48

49

FINANCIAL STATEMENTS

charities and the RAF itself together to mark the centenary of the RAF with a programme of events. To assist with providing initial working capital, the Fund and the other RAF charities each provided a £25K short-term interest-free loan to the RAF100 Appeal which has been subsequently repaid. On completion of the joint venture project any surplus reserves have been or will be distributed as agreed among the joint venture partners.

The income receivable from the RAF100 Appeal is recognised in the Charity’s accounts when the Charity becomes entitled to it, and the amount can be estimated with sufficient accuracy.

~~STOCK~~

Stock consists of purchased goods for resale. Stocks are valued at the lower of cost and net realisable value. Items donated for resale or distribution are not included in the financial statements until they are sold or distributed.

~~PENSION COSTS~~

Pensions are accounted for in accordance with FRS 102 Section 28, with a valuation undertaken by an independent actuary for the defined benefit scheme, the Royal Air Force Benevolent Fund Staff Pension Fund, which is closed to future accrual. Net pension finance income or costs are included immediately in other income or employee costs as appropriate.

Actuarial gains and losses are recognised immediately on the face of the SOFA. The scheme deficit is included as a liability in the balance sheet. Details of the pension scheme are included in Note 15 to the accounts.

The amounts charged to the SOFA for defined contribution schemes represent the contributions payable in the period.

~~FINANCE AND OPERATING LEASES~~

The Charity does not have any finance leases. Rentals payable under operating leases are charged to the SOFA over the period in which the cost is incurred on a straight-line basis.

~~LOANS~~

Loans are awarded to beneficiaries in furtherance of charitable activities. The particular circumstances of each case will determine whether or not the loan is awarded free of interest. When interest is charged the rate is considerably lower than prevailing market rates. Loans are recognised as assets at the value of the award. Accrued interest where applicable, is recognised as income and added to the balance of the loan. Repayments are made as provided in the loan agreement. To facilitate the relief of hardship and distress, the commencement of repayments can be deferred.

~~FINANCIAL INSTRUMENTS~~

The Charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Charity’s balance sheet when the Charity becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

With the exceptions of prepayments and deferred income all other debtor and creditor balances are considered to be basic financial instruments under FRS 102. See Notes 13 and 14 to the accounts.

~~JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY~~

In the application of the Charity’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The most significant estimates and assumptions which affect the carrying amount of assets and liabilities in the accounts relate to:

Useful economic lives: The annual depreciation charge for property and equipment is sensitive to change in the estimated useful economic lives and residual value of assets. These are reassessed annually and amended where necessary to reflect current circumstances.

Unsecured loans: A small proportion of loans to beneficiaries are not secured and therefore a general provision for nonrepayment is made. The calculation of this provision is based on the historical average rate of default and equates to 10% of the total value of unsecured loans at the balance sheet date.

Pension scheme deficit: The underlying assumptions used by the actuary in valuing the scheme are in accordance with FRS 102 and based on assumptions recommended by the actuary.

50

51

FINANCIAL STATEMENTS

2 INCOME AND ENDOWMENTS

----- Start of picture text -----
£’000 £’000 £’000 £’000 £’000 £’000
Donations and legacies
Royal Air Force Service personnel 1,559 - 1,559 1,544 - 1,544
General donations 3,316 533 3,849 2,678 608 3,286
Government grants (Job Retention 594 - 594 - - -
Scheme)
Legacy income 7,395 324 7,719 9,849 228 10,077
12,864 857 13,721 14,071 836 14,907
Charitable activities
Housing 974 20 994 1,003 19 1,022
Respite care 181 - 181 746 - 746
Loan interest 57 - 57 104 - 104
1,212 20 1,232 1,853 19 1,872
Other trading activities
Income from fundraising events 268 - 268 365 14 379
Trading income 92 - 92 78 - 78
360 - 360 443 14 457
Investment income
Dividends from pooled funds 2,742 112 2,854 2,544 101 2,645
Interest earned 6 - 6 29 - 29
Movement in share of joint venture - (115) (115) 500 (478) 22
2,748 (3) 2,745 3,073 (377) 2,696
RAF100 spent the remaining balance of its funds in 2020. The 20% share of the joint venture
has been adjusted to reflect this (see Note 11).
Other income
Profit on the sale of fixed assets 867 - 867 1,280 - 1,280
Pension interest income 213 - 213 215 - 215
Administration fee - - - 12 - 12
1,080 - 1,080 - 1,507 - 1,507
Total income 18,264 874 19,138 20,947 492 21,439
Unrestricted Restricted Total 2020 Unrestricted Restricted Total 2019
----- End of picture text -----

3 ANALYSIS OF EXPENDITURE

----- Start of picture text -----
Direct External Support Total Direct External Support Total
costs grants costs 2020 costs grants costs 2019
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Raising funds
Donations and legacies 2,608 - 1,696 4,304 2,639 - 1,670 4,309
Regional engagement 501 - - 501 680 - - 680
Other trading activities 87 - - 87 180 - - 180
Investment management fees 215 - - 215 371 - - 371
3,411 - 1,696 5,107 3,870 - 1,670 5,540
Charitable activities
Direct support to individuals 13,675 - 1,881 15,556 13,182 - 1,564 14,746
Welfare programmes and 751 3,374 771 4,896 632 5,023 839 6,494
grants
Respite care 3,732 - 198 3,930 3,919 - 558 4,477
Housing Trust support 824 - 822 1,646 1,687 - 549 2,236
18,982 3,374 3,672 26,028 19,420 5,023 3,510 27,953
Total expenditure 22,393 3,374 5,368 31,135 23,290 5,023 5,180 33,493
----- End of picture text -----

See Note 21 for analysis of welfare programmes and grants relating to external grants.

52

53

FINANCIAL STATEMENTS

4 ANALYSIS OF SUPPORT COSTS

----- Start of picture text -----
Raising Direct Welfare Respite Housing Total
funds support to programmes care Trust 2020
individuals and grants support
£’000 £’000 £’000 £’000 £’000 £’000
Information technology and facilities 572 586 295 87 81 1,621
Depreciation and amortisation 204 164 111 50 657 1,186
General management and 172 175 80 26 25 478
administration
Finance and payroll 278 359 104 11 21 773
HR 187 242 71 8 14 522
Governance * 283 355 110 16 24 788
Total 1,696 1,881 771 198 822 5,368
----- End of picture text -----

Raising
funds
Direct
support to
individuals
Welfare
programmes
and grants
Respite
care
Housing
Trust
support
Total
2019
£’000
£’000
£’000
£’000
£’000
£’000
Information technologyand facilities 631
481
260
173
116
1,661
Depreciation and amortisation 180
354
246
158
319
1,257
General management and
administration		 197
148
82
54
37
518
Finance andpayroll 272
240
103
71
31
717
HR 139
122
52
36
16
365
Governance 251
219
96
66
30
662
Total 1,670
1,564
839
558
549
5,180

The 2019 figures have been restated to net off £500K previously shown in pension interest income.

5 STAFF COSTS

----- Start of picture text -----
2020 2019
£’000 £’000
Wages and salaries 6,469 6,522
Social security costs 855 655
Pension costs 650 593
Termination and redundancy costs 743 -
8,717 7,770
----- End of picture text -----

Covid-19 restrictions and the risks the pandemic posed to our guests exacerbated the issue of the long-term viability of Princess Marina House (PMH), our respite care centre on the south coast. The Board took the decision to close the site permanently with a loss of 114 posts. Staff costs include termination and redundancy costs for 100 employees who worked at PMH.

The number of employees whose pay and benefits (excluding pension contributions) amounted to more than £60,000 in the year was as follows:

2020 2019
No. No.
£60,001–£70,000 11
7
£70,001–£80,000 4
2
£80,001–£90,000 1
-
£90,001–£100,000 1
2
£100,001–£110,000 2
1
£110,001–£120,000 1
1
£120,001–£130,000 1
-
£130,001–£140,000 - 1
21
14

19 employees (2019: 13) whose pay and benefits amounted to more than £60,000 in the year were members of the Group Personal Pension Plan, a money purchase scheme. Three employees were included in the higher bandings due to redundancy and termination payments.

The average number of employees, calculated on a headcount basis, analysed by function was:

2020
2019
No.
No.
Charitable activities 139
155
Cost ofgeneratingfunds 38
36
Governance, administration and support 29
25
206
216

The average number of employees in charitable activities fell as result of the closure of PMH and the resulting staff redundancies made in September.

54

55

FINANCIAL STATEMENTS

6 KEY MANAGEMENT PERSONNEL

The key management personnel of the RAF Benevolent Fund are the Trustees and the Senior Management Team (SMT). In 2020, the latter included the Controller, the Chief of Staff, the Director of Welfare and Policy, the Director of Fundraising and Communications and the Director of Finance. Total employee pay and benefits received by SMT for services to the Charity in 2020 were £632K (2019: £589K).

7 NET EXPENDITURE

----- Start of picture text -----
2020 2019
£’000 £’000
Net expenditure for the year is stated after charging:
----- End of picture text -----

Net expenditure for theyear is stated after charging: 2020
£’000		 2019
£’000
Audit fees 66 53
Audit fees – additional fees reprioryear audit 16 -
Internal audit fees - 22
Investment management fees 215 371
Amortisation of intangible assets 177 46
Depreciation 1,008 1,211
Operatingleases
Proft on disposal of fxed assets		 68
(867)		 98
(1,280)

8 TRUSTEES’ REMUNERATION

The Trustees neither received nor waived any emoluments during the year 2020 (2019: £nil) Out-of-pocket expenses were reimbursed to Trustees as follows:

2020 2019 2020 2019
No. No. £ £
Travel nil 3 nil 2,231

9 INTANGIBLE ASSETS

----- Start of picture text -----
Group Charity
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Software costs
Cost on 1 January 3,255 3,065 3,255 3,065
Additions during the year 202 190 202 190
Cost at 31 December 3,457 3,255 3,457 3,255
Amortisation at 1 January (3,006) (2,960) (3,006) (2,960)
Amortisation for the year (177) (46) (177) (46)
Accumulated amortisation at 31 December (3,183) (3,006) (3,183) (3,006)
Net book value 31 December 274 249 274 249
----- End of picture text -----

10 TANGIBLE FIXED ASSETS

----- Start of picture text -----
Group 2020 Charity 2020
Property Equipment Total Property Equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost on 1 January 43,107 2,519 45,626 12,275 2,519 14,794
Additions during the year 1,355 - 1,355 428 - 428
Disposals during the year (897) (179) (1,076) - (179) (179)
Cost at 31 December 43,565 2,340 45,905 12,703 2,340 15,043
Depreciation at 1 January (10,827) (2,416) (13,243) (3,582) (2,416) (5,998)
Depreciation for the year (955) (53) (1,008) (338) (53) (391)
Depreciation on disposals during 254 151 405 - 151 151
the year
Accumulated depreciation at 31 (11,528) (2,318) (13,846) (3,920) (2,318) (6,238)
December
Net book value 31 December 2020 32,037 22 32,059 8,783 22 8,805
Group 2019 Charity 2019
Property Equipment Total Property Equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost on 1 January 43,386 2,536 45,922 13,569 2,536 16,105
Additions during the year 1,887 5 1,892 - 5 5
Disposals during the year (2,166) (22) (2,188) (1,294) (22) (1,316)
Cost at 31 December 43,107 2,519 45,626 12,275 2,519 14,794
Depreciation at 1 January (10,444) (2,340) (12,784) (3,769) (2,340) (6,109)
Depreciation for the year (1,113) (98) (1,211) (330) (98) (428)
Depreciation on disposals during 730 22 752 517 22 539
the year
Accumulated depreciation at 31 (10,827) (2,416) (13,243) (3,582) (2,416) (5,998)
December
Net book value 31 December 2019 32,280 103 32,383 8,693 103 8,796
----- End of picture text -----

56

57

FINANCIAL STATEMENTS

10 TANGIBLE FIXED ASSETS (cont)

----- Start of picture text -----
2020 2019
Property Equipment Total Property Equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Net book value at 31 December is analysed as follows:
Gulf Trust Fund (restricted fund) 134 - 134 139 - 139
Princess Marina House 3,680 22 3,702 3,776 103 3,879
RAFBF respite homes 407 - 407 - - -
Headquarters – London 4,562 - 4,562 4,778 - 4,778
Charity 8,783 22 8,805 8,693 103 8,796
RAFBF Housing Trust Limited 23,254 - 23,254 23,587 - 23,587
Group 32,037 22 32,059 32,280 103 32,383
The net book value of properties comprises:
Freehold 31,498 31,725
Long leasehold 539 555
32,037 32,280
----- End of picture text -----

Properties held by the RAF Benevolent Fund Housing Trust Limited support charitable activities. Properties are held so that beneficiaries, including wounded, injured or sick personnel who have been medically discharged from the RAF, can live in suitable, usually heavily adapted accommodation. Properties are stated at historical cost and depreciated as per the policy stated in Note 1.

11 FIXED ASSET INVESTMENTS

----- Start of picture text -----
Group Charity
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Market value as at 1 January 82,275 82,693 75,953 77,525
Additions 1,083 30,725 1,083 30,500
Withdrawals (7,714) (43,071) (7,714) (43,071)
Net investment gains 2,611 11,928 2,206 10,999
Market value at 31 December 78,255 82,275 71,528 75,953
Share of joint venture
Joint venture RAF100 Appeal as at 1 January 115 593 - -
Movement in share of joint venture (115) (478) - -
Joint venture RAF100 Appeal as at 31 December - 115 - -
Total fixed asset investments 78,255 82,390 71,528 75,953
Investments are represented by:
Listed investments 74,529 76,027 67,802 69,705
Cash holdings in investments 3,194 5,687 3,194 5,687
RAF Disabled Holiday Trust Bonds 532 561 532 561
Total 78,255 82,275 71,528 75,953
----- End of picture text -----

The Charity is the only Trustee of the RAF Disabled Holiday Trust whose net assets to the value of £532K are included within investments. Also included is the Charity’s share capital in RAFBF Trading Limited of £1. The results of this subsidiary entity are shown in Note 26.

The RAF100 Appeal was established in January 2016. Its principal activity was to agree and coordinate plans and associated fundraising activities for the RAF centenary year. On completion of the joint venture project any surplus reserves will be distributed as agreed among the joint venture partners. The Charity’s 20% share of the net assets of the joint venture is shown above as part of the total fixed asset investments. The investment and the net income attributable are calculated on the basis of the funds under the joint venture’s control.

As a result of the Covid-19 pandemic in 2020 the markets entered a period of volatility during which investment values fell, with a 20% loss by the second quarter of the year. Subsequently markets started to recover, and by the year end losses had been recouped and there was a market gain of £2.6M.

58

59

FINANCIAL STATEMENTS

12 LOANS TO BENEFICIARIES

----- Start of picture text -----
Group Charity
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Balance at 1 January 9,305 9,985 9,305 9,985
New loans 109 135 109 135
Interest charged 57 104 57 104
9,471 10,224 9,471 10,224
Repayments (776) (900) (776) (900)
Loans converted to grants (74) (17) (74) (17)
Bad debts written off (28) (2) (28) (2)
Balance at 31 December 8,593 9,305 8,593 9,305
----- End of picture text -----

Loans are provided so that beneficiaries can continue to live in their own homes. Loan interest is charged depending on the nature of the case and where applicable, the interest rate is substantially below commercial rates. The outstanding loans include balances totalling £8.5M (2019: £9.2M) which are secured by legal charges on the assets of the beneficiaries. The majority of loans have no fixed repayment date and are normally repayable from the beneficiary’s estate. Provision for loan conversion is calculated at 10% of unsecured loans. Total outstanding unsecured loans at the year end is £96K (2019: £96K).

13 DEBTORS

----- Start of picture text -----
Group Charity
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Legacies 6,558 7,188 6,558 7,102
Inter-company balance - - 11,232 12,315
Other debtors 535 597 456 479
Prepayments 180 84 166 84
7,273 7,869 18,412 19,980
----- End of picture text -----

14 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

----- Start of picture text -----
|||||| |---|---|---|---|---| |Group|Charity| |2020|2019|2020|2019| |£’000|£’000|£’000|£’000| |Trade creditors|430|520|430|520| |Taxation and social security costs|246|253|240|249| |Accruals for grants payable|2,291|1,862|2,014|1,839| |Other creditors|449|249|360|156| |3,416|2,884|3,044|2,764|

----- End of picture text -----

15 PENSION COMMITMENTS

The RAF Benevolent Fund pension arrangements are as follows:

A Group Personal Pension Scheme made up of a collection of individual pension plans arranged by the Fund is provided by an insurance provider. This service has been provided by Royal London since November 2016. The liability of the employer is limited to the contributions it makes which amounted to £650K (2019: £593K), of which £55K remained payable at the year end (2019: £62K).

The RAF Benevolent Fund Staff Pension Fund is a defined benefit scheme. The scheme was closed to new members on 31 August 2005 and was closed to future accrual on 1 April 2014. The most recent actuarial valuation was carried out as at 31 December 2017. Under the schedule of contributions agreed as part of the actuarial valuation as at 31 December 2017, the employer paid £1M during 2020 which included an additional £500K (2019: £500K). Triennial valuation will be completed in 2021 and a new deficit contribution plan agreed.

----- Start of picture text -----
2020 2019
£’000 £’000
Reconciliation of funded status to balance sheet
Defined benefit obligation (41,561) (37,767)
Fair value of plan assets 25,030 24,039
Net defined benefit liability (16,531) (13,728)
The amounts recognised in the SOFA are as follows:
Net interest expense on net defined benefit liability 265 337
Total pension expense recognised in the SOFA 265 337
Reconciliation of defined benefit obligation over the year
Defined benefit obligation as at 1 January 2020 (37,767) (34,526)
Interest expenses on defined benefit obligation (740) (948)
Remeasurement – effect of experience 268 40
adjustments gain
Remeasurement – effect of changes in (4,890) (3,668)
assumptions loss
Benefits paid 1,568 1,335
Defined benefit obligation as at 31 December 2020 (41,561) (37,767)
Changes in the fair value of plan assets over the year:
Fair value of plan assets as at 1 January 2020 24,039 22,231
Interest income on plan assets 475 611
Remeasurement – return on plan assets 1,084 2,032
excluding interest income gain
Contributions by employer 1,000 500
Benefits paid (1,568) (1,335)
Fair value of plan assets as at 31 December 2020 25,030 24,039
Return on plan assets 1,559 2,643
----- End of picture text -----

6 ~~0~~

61

FINANCIAL STATEMENTS

15 PENSION COMMITMENTS (cont)

----- Start of picture text -----
2020 2019
£’000 £’000
Remeasurements recognised in SOFA
Remeasurement – effect of experience adjustments gain 268 40
Remeasurement – effect of changes in assumptions loss (4,890) (3,668)
Remeasurement – return on plan assets excluding interest income gain 1,084 2,032
Total remeasurement loss recognised in SOFA (3,538) (1,596)
2020 2019
£’000 % £’000 %
Assets:
Target Return Fund 24,484 97.8% 23,623 98.3%
Bonds - 0.0% 193 0.8%
Cash/other 546 2.2% 223 0.9%
25,030 100% 24,039 100%
2020 2019
Principal actuarial assumptions at the balance sheet date
Discount rate 1.3% 2.0%
RPI inflation rate 3.0% 3.2%
CPI inflation rate 2.3% 2.2%
Increases to pensions in deferment (CPI max 5%) 2.3% 2.2%
Increases to pensions in payment (CPI max 5%) 2.3% 2.3%
Commutation (% of pension) 25% 25%
Mortality – base table S2PA S2PA
Mortality – allowance for future improvements CMI CMI
2017 2017
1.0% LTR 1.0% LTR
Life expectancies from age 63:
Male currently aged 63 86.7 86.6
Female currently aged 63 88.7 88.6
Male currently aged 43 87.9 87.8
Female currently aged 43 90.0 89.9
----- End of picture text -----

Amounts for current and previous four periods are as follows:

2020
2019
2018
2017
2016
£’000
£’000
£’000
£’000
£’000
Defned beneft obligation (41,561) (37,767) (34,526) (37,973) (37,650)
Fair value ofplan assets 25,030 24,039 22,231
22,958
23,204
Defcit (16,531) (13,728) (12,295)
(15,015)
(14,446)

16 RELATED PARTY DISCLOSURE

Donations to the value of £100 (2019: £249) were received from individual Trustees in the year. Details of all inter-company transactions are shown in Note 26 on subsidiary entities. There were no other related party transactions.

17 CAPITAL COMMITMENTS

Planned capital commitments in 2021 are for the continuing introduction of a new accounting system which has a budget remaining of £70K. A total of £280K has already been capitalised for this project with £90K capitalised in the current period. In addition there are further capital commitments in 2021 of £82K for the website redevelopment and design with £112K already capitalised in 2020.

18 ANALYSIS OF GROUP NET ASSETS BETWEEN FUNDS

----- Start of picture text -----
Unrestricted Restricted funds Endowment Total funds
funds funds
2020 2019 2020 2019 2020 2019 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fund balances at 31 December are represented by:
Tangible, intangible 32,199 32,493 134 139 - - 32,333 32,632
fixed assets
Investments 68,715 73,146 3,207 3,203 6,333 6,041 78,255 82,390
Loans to beneficiaries 8,455 9,167 138 138 - - 8,593 9,305
Current assets 7,918 11,005 2,249 3,596 505 514 10,672 15,115
Current liabilities (2,897) (2,356) - - (519) (528) (3,416) (2,884)
Pension liability (16,531) (13,728) - - - - (16,531) (13,728)
Total net assets 97,859 109,727 5,728 7,076 6,319 6,027 109,906 122,830
----- End of picture text -----

19 OPERATING LEASES

At 31 December 2020 the group had total annual commitments under non-cancellable operating leases, all for office equipment and vehicles as follows:

----- Start of picture text -----
2020 2019
£ £
Payments due: office equipment and vehicles
Within one year 25,364 58,479
Within two to five years 22,434 51,161
Total 47,798 109,640
----- End of picture text -----

62

63

FINANCIAL STATEMENTS

20 CONTINGENT LIABILITY

The last triennial valuation of the Staff Pension Fund (SPF) identified a deficit of £3.65M as at 31 December 2017, on an agreed prudent funding basis. The Fund is required to enter into a Recovery Plan to extinguish the deficit. The plan commits the Fund to making annual payments of £500K until the earlier of 31 December 2024 or such date as when the deficit is extinguished.

The Trustees of the RAF Benevolent Fund have granted a legal mortgage over the Charity’s head office at 67 Portland Place and 45 Devonshire Close, London, in favour of the Trustees of the SPF.

This charge is to secure future payments from the Charity to the SPF to extinguish the deficit. The obligation secured by the mortgage is in accordance with applicable statutory requirements. The Trustees have also complied with the requirements of Section 124 of the Charities Act 2011 to obtain and consider proper advice.

A formal valuation of the property which is held on a long lease (virtual freehold) interest, was carried out in August 2019 and the market value was placed at £11M. This property is shown at a net book value of £4.6M in the balance sheet.

21 WELFARE PROGRAMMES AND GRANTS

----- Start of picture text -----
2020 2019
£ £
GRANT FUNDING TO THE SERVING RAF
General welfare
Citizens Advice Station Outreach Clinic
Mid Lincolnshire CAB (RAF Digby, Coningsby, Cranwell) 4,000 -
Rutland CAB (RAF Wittering) - 3,500
4,000 3,500
----- End of picture text -----
Stationgrants
RAF Akrotiri 38,546 -
RAF Benson 1,970 158,000
RAF Boulmer 386 143,889
RAF Brize Norton 16,113 50,000
RAF Coningsby 2,870 121,476
RAF Corsham(MOD) 1,015 -
RAF Cosford 2,500 305,645
RAF College Cranwell 7,425 -
RAF Digby 2,500 1,648
JSSU Cyprus - 6,375
RAF Episkopi 9,539 71,093
RAF Fylingdales 13,712 400
RAF Halton 3,952 -
RAF Henlow 1,856 -
RAF High Wycombe(unspent balance forprevious awards) (49,368) 145,988
RAF Honington 1,089 74,874
RAF Leeming 19,950 57,035
RAF Linton-on-Ouse - 4,795
RAF Lossiemouth 7,888 20,108
RAF Marham 5,510
4,600
RAF NaplesJFC 3,739
-
RAF Northolt 394
-
RAF Northwood - 11,460
RAF Odiham 1,880
113,426
RAF Scampton 13,662
93,550
RAF Shawbury - 453,638
MOD Southwick Park - 13,203
RAF Spadeadam 610
-
RAF St Mawgan 1,990
7,800
RAF Valley 6,395
128,184
RAF Waddington 8,791
110,350
RAF Wittering 40,421
10,360
RAF Wyton 2,219
2,785
RAF Small Arms Association - 9,475
RAF(U)Swanwick 650
-
RAF Families’ Day funding programmes at nil RAF stations - 44,260
(2019: 37 stations)
168,204 2,164,417
TOTAL GRANT FUNDING TO THE SERVING ROYAL AIR FORCE 172,204 2,167,917
CONTRACTED SERVICES TO SUPPORT THE SERVING ROYAL AIR FORCE 2020
£		 2019
£
Airplay programme
RAF stations –youth supportprogramme 935,139 1,268,137
RAF stations – Ben Play parentingandplay parks 770,554
139,068
1,705,693 1,407,205
General support
ReadingForce - 21,052
RAF Families Federation 15,000
-
Relate – BuildingStronger Families 21,624
3,000
36,624
24,052
**TOTAL CONTRACTED SERVICES TO THE SERVING ROYAL AIR FORCE ** 1,742,317 1,431,257
TOTAL GRANTS AND CONTRACTED SERVICES TO SUPPORT THE
SERVING ROYAL AIR FORCE		 1,914,521 3,599,174
CONTRACTED SERVICES TO SUPPORT THE SERVING AND VETERANS’
COMMUNITIES		 2020
£		 2019
£
**Wellbeing partnerships **
Headspace/AnxietyUK(mental wellbeing) 71,424
17,534
CommunityNetwork/Silver Line 94,022
42,495
GamCare/Work Stress Management - 22,950
Work Stress Management(listeningand counselling) 343,452
198,725

64

65

FINANCIAL STATEMENTS

----- Start of picture text -----
Manage Health (listening and counselling) 66,540 -
Relate (young people listening and counselling) 18,216 -
Anxiety UK (listening and counselling) 32,887 93,906
Workshop and coaching 9,600 8,484
Digital tools - 36,564
636,141 420,658
Relationship support
Relate – relationship counselling/mediation 130,163 152,460
TOTAL CONTRACTED SERVICES TO SUPPORT THE SERVING AND 766,304 573,118
VETERANS’ COMMUNITIES
----- End of picture text -----

----- Start of picture text -----
GRANT FUNDING TO THE VETERANS’ COMMUNITIES 2020 2019
£ £
317 Sqn MT Association - 750
----- End of picture text -----

GRANT FUNDING TO THE VETERANS’ COMMUNITIES
317 Sqn MT Association		 2020
£
-		 2019
£
750
Addaction 15,000 -
Age Concern Spain – ACASA 17,000 18,000
Age UK Portsmouth 8,000 -
Alzheimer’s Society - 22,500
Bridge For Heroes 5,000 4,000
Bright Rebel Coaching - 140
Brighterway - 2,000
Combat Stress 167,120 250,000
Czech Veterans 4,732 -
Defence Medical Welfare Service 15,000 -
Fares4Free 7,000 -
Goodwill Solutions – The LearningAcademy 3,000 -
Hartlepool CommunitySport Foundation - 1,000
Horseback UK - 7,500
ILM Highland 7,500 -
ImprovingLives Plymouth 5,000 -
MilitaryWives Choir Foundation 10,000 -
Mow and Grow - 4,000
Mutual Support - 7,500
National Gulf Veterans and Families Association 10,000 11,500
On Course Foundation 5,000 5,000
Polish Veterans 6,240 -
PoppyScotland – ASAP 20,000 20,000
Project Propeller 5,000 -
RAF Widows’ Association 34,712 34,000
Royal Air Forces Association(support towards caseworkingcosts) - 35,000
Royal Canadian Legion - 1,315
Royal Commonwealth Ex-Services League (includes support towards 35,473 31,624
caseworkingcosts)
Scotty’s Little Soldiers 6,000 3,300
Spinal Injuries Association 10,000 -
SSAFA, the Armed Forces Charity (includes support towards 65,275 70,000
caseworkingcosts)
StepTogether Volunteering - 10,000
Stoll 12,000 12,000
Taxi Charityfor MilitaryVeterans - 5,000
Team Endeavour Racing 4,000
-
The Gwennili Trust 2,000
2,000
The Matthew Project - 5,000
The Not Forgotten Association - 15,000
The Ripple Pond 2,500
1,376
Turn to Starboard - 12,500
Veterans Outreach Support 10,000
12,500
Victoria Cross and George Cross Association - 750
Waterloo Uncovered 3,000
5,000
Widows’ Association of Great Britain 5,000
-
500,552
610,255
Employment support
Future for Heroes - 4,500
The PoppyFactory 15,000
19,000
HighGround 10,000
-
Regular Forces Employment Association 111,037
58,000
SaluteMyJob - 14,000
Skills Force - 4,500
WalkingWith The Wounded - 12,500
The Warrior Programme - 15,000
CatZero Limited - 3,500
136,037
131,000
Housing support
Broughton House 33,000
18,000
Scottish Veterans Residences - 10,000
Single Homelessness Action In Durham - 2,500
Veterans Aid 15,000
15,000
Queen Elizabeth Hospital Birmingham Hospital Charity– Fisher House 5,000
10,000
Alabaré Christian Care Centres - 15,000
53,000
70,500
Residential and respite care
Care for Veterans(previously Queen Alexandra Hospital Home) - 20,000
The CurpheyHome - 3,000
Music in Hospitals and Care - 4,000
Revitalise - 11,500
- 38,500
TOTAL GRANT FUNDING TO THE VETERANS’ COMMUNITY 689,589
850,255
TOTAL GRANT AND CONTRACTED SERVICES PAYMENTS
TO THIRD PARTIES		 3,370,414 5,022,547
Total contracted services 2,508,621 2,004,375
Total discretionary grants 861,793 3,018,172
TOTAL COST OF SUPPORT THROUGH GRANT
AND CONTRACTED SERVICES		 3,370,414 5,022,547

66

67

FINANCIAL STATEMENTS

22 STATEMENT OF FUNDS

----- Start of picture text -----
At 1 Income Expenditure Net gains/ Transfers Group Charity
January (losses) at 31 at 31
2020 December December
2020 2020
£’000 £’000 £’000 £’000 £’000 £’000 £’000
General reserve 99,765 17,873 (22,163) 1,844 (333) 96,986 84,298
Designated funds – see Note 23 23,690 391 (6,831) 406 (252) 17,404 10,387
Pension reserve (13,728) - (265) (3,538) 1,000 (16,531) (16,531)
Total unrestricted funds 109,727 18,264 (29,259) (1,288) 415 97,859 78,154
Restricted income funds 7,076 874 (1,876) 69 (415) 5,728 5,728
– see Note 24
Endowment funds – see Note 25 6,027 - - 292 - 6,319 6,319
Total funds 122,830 19,138 (31,135) (927) - 109,906 90,201
At 1 Income Expenditure Net gains/ Transfers Group Charity
January (losses) at 31 at 31
2019 December December
2019 2019
£’000 £’000 £’000 £’000 £’000 £’000 £’000
General reserve 92,997 20,559 (23,539) 10,058 (310) 99,765 87,167
Designated funds – see Note 23 30,654 388 (8,091) 929 (190) 23,690 17,178
Pension reserve (12,295) - (337) (1,596) 500 (13,728) (13,728)
Total unrestricted funds 111,356 20,947 (31,967) 9,391 - 109,727 90,617
Restricted income funds 7,911 492 (1,526) 199 - 7,076 6,961
– see Note 24
Endowment funds – see Note 25 5,285 - - 742 - 6,027 6,027
Total funds 124,552 21,439 (33,493) 10,332 - 122,830 103,605
----- End of picture text -----

Unrestricted funds

The sum of £17.4M (2019: £23.7M) is included in unrestricted funds and relates to the following designated reserves:


following designated reserves:
£7M (2019: £6.5M) Reserves held by the RAF Dependants Fund to relieve
immediate fnancial distress in the event of the death of a
subscriber by giving a tax-free grant, payable at the discretion
of the Fund
£1.2M (2019: £2M) Fundraising development and systems upgrade
£2.7M (2019: £3.6M) Investment in Airplay programmes on RAF stations
£nil (2019: £6.4M) Reaching out campaign to elderly veterans and costs
of additional services
£6.5M (2019: £5.2M) Funds for developing and providing enhanced welfare
services

The transfer of £1M (2019: £500K) from general reserves to the pension reserve represents the Fund’s contribution paid into the defined benefit pension scheme in the year.

Restricted income funds – Over £100K

Bomber Command
Memorial		 Maintenance of the Bomber Command Memorial in Green
Park, Piccadilly
Fulmer Fund These funds are held for serving RAF in need of maternity
services, post-natal services or the provision of childcare
facilities on RAF bases
Gulf Trust These funds are held in a ring-fenced fund for the beneft
of RAF Gulf War veterans
Lowe Trust Supports Battle of Britain veterans and their descendants
Respite Care – LIBOR LIBOR funding received to increase and develop our respite
care provision
RAF Disabled Holiday Trust Providing holidays to severely disabled serving and ex-RAF
personnel and their immediate dependants
Afghan Brain Injury Support to veterans of Afghanistan who have sustained
a brain injury

68

69

FINANCIAL STATEMENTS

Endowment funds – Over £100K

E H Jubb Fund For the beneft of air crew, their widows and dependants
Newton Driver Memorial
Fund		 For the maintenance and upkeep of property used as a
home for members of the RAF and their dependants who
are convalescent or disabled. If the income cannot be used
for this purpose it can be applied for general purposes of the
Fund
Viscount Nufeld
Endowment		 Income used for general purposes
Hector Pilling Memorial
Fund		 To provide fnancial assistance for foundationers at the Duke
of Kent School
RAF Prize Trust To help with the education of dependants of deceased
members of the RAF killed on duty or attributable to Service
Douglas Turner Benefaction To be used for the assistance or beneft, including education,
of former or future pilots and navigators and their
dependants
RAFBF Educational
Endowment Fund		 To promote the education of the children of members of the
Royal Air Force
RAFBF Educational
Expendable Fund		 To promote the education of the children of members of the
Royal Air Force
Peter Henry Slater-Eiggert
Memorial Fund		 For the beneft of ex-members and dependants of 83
Squadron
The Revd. James Edmund
Strickland Memorial Fund		 For the use of general purposes of the Royal Air Force Benevolent
Fund

23 DESIGNATED FUNDS

----- Start of picture text -----
At 1 Income Expenditure Net Transfers At 31
January gains December
2020 2020
£’000 £’000 £’000 £’000 £’000 £’000
Fundraising development and 1,970 - (509) - (252) 1,209
systems upgrade
Investment in Airplay programmes 3,567 - (875) - - 2,692
New and enhanced welfare services 5,197 - (4,080) - 5,369 6,486
Reaching out campaign and 6,444 - (1,075) - (5,369) -
associated additional costs
Total designated funds – Charity 17,178 - (6,539) - (252) 10,387
RAF Dependants Fund 6,512 391 (292) 406 - 7,017
Total designated funds – Group 23,690 391 (6,831) 406 (252) 17,404
At 1 Income Expenditure Net Transfers At 31
January gains December
2019 2019
£’000 £’000 £’000 £’000 £’000 £’000
Fundraising development and 2,700 - (540) - (190) 1,970
systems upgrade
Investment in Airplay programmes 4,800 - (1,233) - - 3,567
New and enhanced welfare services 8,700 - (3,503) - - 5,197
Reaching out campaign and 8,900 - (2,456) - - 6,444
associated additional costs
Total designated funds – Charity 25,100 - (7,732) - (190) 17,178
RAF Dependants Fund 5,554 388 (359) 929 - 6,512
Total designated funds – Group 30,654 388 (8,091) 929 (190) 23,690
----- End of picture text -----

70

71

FINANCIAL STATEMENTS

24 RESTRICTED FUNDS

----- Start of picture text -----
As at Income Expenditure As at 31 As at Income Expenditure As at 31
1 January December 1 January December
2020 2020 2019 2019
£ £ £ £ £ £ £ £
Education
Group Captain W E Purdin Memorial Fund - 100 - 100 - 98 (98) -
RAF Prize Trust - 8,771 (8,771) - - 8,603 (8,603) -
RAFBF Educational Endowment Fund - 19,746 (19,746) - - 19,366 (19,366) -
RAFBF Educational Expendable Fund - 5,541 (3,530) 2,011 - 5,442 (5,442) -
RAFBF Education - 4,057 (4,057) - - 4,253 (4,253) -
Douglas Turner Benefaction - 4,700 - 4,700 - 4,610 (4,610) -
- 42,915 (36,104) 6,811 - 42,372 (42,372) -
Princess Marina House and respite care
Princess Marina House Amenities Fund 64,884 - (64,884) - 98,267 14,143 (47,526) 64,884
Princess Marina House Shencot/Seacot House - 10,472 (10,472) - 1,725 1,829 (3,554) -
Princess Marina House other - - - - - 1,000 (1,000) -
The April Fools’ Club – serving respite care 109,188 - (109,188) - 109,188 - - 109,188
174,072 10,472 (184,544) - 209,180 16,972 (52,080) 174,072
Housing
Housing Trust General Restricted Fund - 153,100 (153,100) - - 28,229 (28,229) -
The Hobson Charity – property adaptations - 10,000 (10,000) - - - - -
- 163,100 (163,100) - - 28,229 (28,229) -
Other
Bomber Command Memorial 2,512,584 210,746 (70,572) 2,652,758 1,766,404 819,160 (72,980) 2,512,584
Gulf Trust 410,111 19,890 - 430,001 404,021 18,590 (12,500) 410,111
2,922,695 230,636 (70,572) 3,082,759 2,170,425 837,750 (85,480) 2,922,695
Welfare programmes
Aged Veteran Fund - 230 - 230 - - - -
Aged Veteran Lunch Club 4,716 - (4,716) - (64) 5,064 (284) 4,716
Aged Veteran Respite at Home - - - - 2,834 180 (3,014) -
Airplay - 60,000 (60,000) - - 35,000 (35,000) -
Armed Forces Covenant Fund - 158,500 (158,500) - - - - -
Capital Project Childcare Facility - 27,000 (27,000) - - - - -
Caseworking Transformation Project - 24,053 (24,053) - - - - -
Mrs H M Jerham Memorial Fund 2,928 - - 2,928 2,928 - - 2,928
RAF stations - 18,877 (18,877) - - 6,000 (6,000) -
Bereavement support 2,506 - (2,506) - 2,506 - - 2,506
Mental health services - 104 - 104 - - - -
MBDA Fund - 9,790 (9,790) - - - - -
Restricted to RAF Valley play parks refurbishment 9,449 - (9,449) - 9,449 - - 9,449
Restricted to serving RAF - 7,975 (7,975) - - - - -
Restricted to serving RAF (LIBOR) 473,932 - (473,932) - 977,500 - (503,568) 473,932
493,531 306,529 (796,798) 3,262 995,153 46,244 (547,866) 493,531
----- End of picture text -----

72

73

FINANCIAL STATEMENTS

24 RESTRICTED FUNDS (cont)

----- Start of picture text -----
As at Income Expenditure As at 31 As at Income Expenditure As at 31
1 January December 1 January December
2020 2020 2019 2019
£ £ £ £ £ £ £ £
Individual welfare
Advice and Advocacy 5,748 10,183 (15,931) - - 10,206 (4,458) 5,748
Afghan Brain Injury 226,728 - - 226,728 226,728 - - 226,728
Afghan: LIBOR 189,316 - (188,950) 366 304,229 - (114,913) 189,316
Various legacies – beneficiaries in Lossiemouth - - - - 25,000 - (25,000) -
Various legacies – beneficiaries in Scotland - 57,924 (57,924) - - 151,066 (151,066) -
RAF Disabled Holiday Trust 575,760 10,321 (31,769) 554,312 568,705 7,055 - 575,760
Fulmer Fund 240,555 - (29,277) 211,278 240,555 - - 240,555
Garden maintenance - 7,500 (7,500) - - - - -
General welfare (individual) - 10,000 (10,000) - 52,295 30,212 (82,507) -
General welfare (mobility aid) - 7,500 (7,500) - - - - -
General welfare – Devon, Cornwall and Somerset - 300 - 300 500 - (500) -
Lowe Trust 572,209 - - 572,209 572,209 - - 572,209
Restricted to air crew - - - - 75,000 - (75,000) -
Restricted to Isle of Wight - 5,000 (5,000) - - - - -
Restricted to Scotland - 74,500 (9,470) 65,030 - - - -
Restricted to Suffolk - - - - 60 - (60) -
Restricted to Tyne and Wear - 10,000 (10,000) - - - - -
Restricted to Yorkshire - - - - 1,000 - (1,000) -
Royal Observer Corps - 100,000 (41,360) 58,640 - - - -
Stafford Trust - 15,120 - 15,120 - - - -
Home adaptations in Cheshire - - - - 1,000 - (1,000) -
Scotland veterans over 65 - 25,000 (25,000) - - - - -
1,810,316 333,348 (439,681) 1,703,983 2,067,281 198,539 (455,504) 1,810,316
Respite care – LIBOR Funds
(reclassification agreed)
Respite care lunch clubs 71,838 - (71,838) - 200,000 - (200,000) -
Respite care property 441,317 - (305,884) 135,433 700,000 - (10,981) 689,019
Additional respite north of England - - - - 417,625 - (33,284) 384,341
Respite breaks and care hotels 316,550 - (36,226) 280,324 247,001 - - 247,001
Day respite breaks - - - - 250,000 - (7,315) 242,685
Contribution to community engagement workers 591,240 - (159,393) 431,847 - - - -
Management support 142,101 - (56,417) 85,684 63,000 - (63,000) -
1,563,046 - (629,758) 933,288 1,877,626 - (314,580) 1,563,046
RAF100 Appeal – 20% share in joint venture 114,758 - (114,758) - 592,313 (477,555) - 114,758
Total restricted funds 7,078,418 1,087,000 (2,435,315) 5,730,103 7,911,978 692,551 (1,526,111) 7,078,418
----- End of picture text -----

74

75

FINANCIAL STATEMENTS

25 ENDOWMENT FUNDS

The purpose of funds exceeding £100K is set out under Note 22.

----- Start of picture text -----
As at Unrealised As at 31 As at Unrealised As at 31
1 January gain December 1 January 2019 gain December
2020 2020 2019
£ £ £ £ £ £
Permanent endowment funds with unrestricted income
Pilot Officer J P L Branson Memorial Fund 49,117 2,377 51,494 43,067 6,050 49,117
Pilot Officer James Erskine Cunning Memorial Fund 46,224 2,237 48,461 40,531 5,693 46,224
Flying Officer L S Delaney Trust 13,426 650 14,076 11,772 1,654 13,426
Paddy Finucane Memorial Fund 20,004 968 20,972 17,540 2,464 20,004
Louise Alice Kay Memorial Fund 41,324 2,000 43,324 36,234 5,090 41,324
Mosquito Memorial Fund 11,612 562 12,174 10,182 1,430 11,612
Flying Officer Douglas Frank Newsham Memorial Fund 36,894 1,786 38,680 32,350 4,544 36,894
Viscount Nuffield Endowment 1,068,063 51,696 1,119,759 936,510 131,553 1,068,063
Helen Mary Renton Fund 43,597 2,110 45,707 38,227 5,370 43,597
RAF Rugby Union Fund 51,271 2,482 53,753 44,956 6,315 51,271
Peter Henry Slater-Eiggert Memorial Fund 147,119 7,121 154,240 128,998 18,121 147,119
The Revd. James Edmund Strickland Memorial Fund 105,969 5,129 111,098 92,917 13,052 105,969
1,634,620 79,118 1,713,738 1,433,284 201,336 1,634,620
Expendable endowment funds with unrestricted income
Flying Officer William Dron Memorial Fund 2,478 120 2,598 2,173 305 2,478
Frederick Eley Fund 4,775 231 5,006 4,187 588 4,775
Wing Commander J Higginson Fund 9,752 472 10,224 8,551 1,201 9,752
Peter Grattan Holt Memorial Fund 50,822 2,460 53,282 44,563 6,259 50,822
E H Jubb Fund 338,499 16,384 354,883 296,806 41,693 338,499
Middle East Relief Fund 43,231 2,092 45,323 37,906 5,325 43,231
Morley Fund 7,086 343 7,429 6,213 873 7,086
Orlebar Memorial Fund 8,019 388 8,407 7,031 988 8,019
Shattock Memorial Scholarship Fund 12,041 583 12,624 10,558 1,483 12,041
Wooding Memorial Fund 8,590 416 9,006 7,532 1,058 8,590
485,293 23,489 508,782 425,520 59,773 485,293
Permanent endowment funds where the use of the income is restricted
Newton Driver Memorial Fund 2,168,682 104,968 2,273,650 1,901,566 267,116 2,168,682
Group Captain W E Purdin Memorial Fund 2,769 134 2,903 2,428 341 2,769
RAFBF Educational Endowment Fund 549,177 26,581 575,758 481,535 67,642 549,177
Douglas Turner Benefaction 130,723 6,327 137,050 114,622 16,101 130,723
2,851,351 138,010 2,989,361 2,500,151 351,200 2,851,351
Expendable endowment funds where the use of the income is restricted
Mrs H M Jereham Memorial Fund 30,128 1,458 31,586 26,417 3,711 30,128
Hector Pilling Memorial Fund 638,356 30,898 669,254 559,730 78,626 638,356
RAF Prize Trust 243,951 11,808 255,759 213,904 30,047 243,951
RAFBF Educational Expendable Fund 144,108 6,975 151,083 126,358 17,750 144,108
1,056,543 51,139 1,107,682 926,409 130,134 1,056,543
Total endowment funds 6,027,807 291,756 6,319,563 5,285,364 742,443 6,027,807
----- End of picture text -----

76

77

FINANCIAL STATEMENTS

26 SUBSIDIARY ENTITIES

The results of the Fund’s wholly owned subsidiary entities are included within the consolidated SOFA as follows:

----- Start of picture text -----
RAFBF Trading Ltd RAF Dependants RAF Dependants RAFBF Housing Trust RAF Disabled Subsidiary entities
Fund Income Trust Ltd Ltd Holiday Trust
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Income from:
Donations - - - - - - 8 286 10 9 18 295
Investments - - 209 204 - - - - - - 209 204
Other trading activities 108 78 - - - - - - - - 108 78
Charitable activities - - - - - - 974 988 - - 974 988
Profit on sale of properties - - - - - - 876 1,511 - - 876 1,511
Subscriptions - - 182 184 31 31 - - - - 213 215
108 78 391 388 31 31 1,858 2,785 10 9 2,398 3,291
Expenditure on:
Charitable activities 58 35 263 333 - - 1,770 1,680 2 3 2,093 2,051
Other trading activities 41 35 - - - - - - - - 41 35
Management and administration 9 8 29 26 31 31 - - - - 69 65
-
108 78 292 359 31 31 1,770 1,680 2 3 2,203 2,151
Net gains/(loss) on investment assets - - 406 929 - - - - (25) (3) 381 926
Net result of subsidiary - - 505 958 - - 88 1,105 (17) 3 576 2,066
----- End of picture text -----

RAFBF Trading Limited

Company number 07768120

A company set up for the RAF Benevolent Fund to conduct trading in support of its charitable objectives. The company donated £58,468 to the Fund in 2020 (2019:

£37,553). The inter-company balance owed to the Fund at year end was £66,409 (2019: £131,560). The net assets at year end were £1 (2019: £1).

RAF Dependants Fund

Charity number 253492

A charity with the RAF Benevolent Fund as custodian Trustee. Set up to promote the efficiency of the RAF through relieving dependants of deceased serving personnel from financial

distress. There were 15 deaths in 2020 (2019: 19) and the dependants were paid £17,500 in each case. The inter-company balance owed to the Charity at year end was £3,042 (2019: £50,817). The net assets at year end were £7,017,317 (2019: £6,511,757).

RAF Dependants Income Trust Limited

Company number 01285364

A company set up for RAF Dependants Fund subscribers to make further financial provision for their dependants in the event of their death in service. There were 10 member deaths in 2020 (2019: 11) and beneficiaries received payments made on behalf of the Trust by the underwriters Aviva. The company donated £nil to the Charity in 2020 (2019: £nil). The intercompany balance owed to the Charity at year end was £3,595 (2019: £29,550). The net assets at year end were £3,339 (2019: £3,339).

RAF Benevolent Fund

Housing Trust Limited

Company number 1058896 Charity number 264636 Scottish registered number SCO38218

A wholly-owned subsidiary of the RAF Benevolent Fund. Its sole activity is to hold and operate properties of beneficiaries of the RAF Benevolent Fund. The inter-company balance owed to the Fund at year end was £11,159,566 (2019: £12,105,033). The net assets at year end were £13,160,876 (2019: £12,596,281).

RAF Disabled Holiday Trust

Charity number 286019

A wholly-owned subsidiary of the RAF Benevolent Fund. Its sole activity is to provide holidays to disabled serving and former members of the RAF and their dependants. The Trust purchases holiday bonds which entitles it to book holidays in the UK and Europe for its beneficiaries. The inter-company balance owed to the RAF Benevolent Fund at year end was £2,629 (2019: £2,696 owed by the Fund). The net assets at year end were £554,312 (2019: £571,405). RAF Benevolent Fund Gift in Kind amounted to £nil (2019: £nil).

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79

~~SUBSIDIARY ORGANISATIONS~~

~~RAF BENEVOLENT FUND HOUSING TRUST LIMITED~~

~~RAF DEPENDANTS INCOME TRUST LIMITED~~

Companies House: 01058896 Charity Commission: 264636 OSCR: SC038218 Directors/Trustees: Air Vice-Marshal David Murray (Chair) (until 20 April 2020) Air Vice-Marshal Chris Elliot (Chair) (from 20 April 2020) Al Bennett (until 27 May 2021) Wing Commander Sarah Davis (from 1 June 2020) Air Vice-Marshal Simon Dougherty (until 11 May 2020) Victoria Fakehinde Air Commodore Paul Hughesdon Emrys Rogers (from 3 August 2020)

Companies House: 01285364 Directors: Air Vice-Marshal David Murray (Chair) (until 20 April 2020) Air Vice-Marshal Chris Elliot (Chair) (from 20 April 2020) Group Captain Jacqueline East (until 11 May 2021) Group Captain Colin Owen (from 11 May 2021) Frances Brindle Graeme Shankland Victoria Fakehinde Air Commodore Paul Hughesdon

~~RAF DEPENDANTS FUND~~

Charity Commission: 253492 Trustee: Royal Air Force Benevolent Fund (Reg Charity: 1081009) Management Committee members: Air Vice-Marshal David Murray (Chair) (until 20 April 2020) Air Vice-Marshal Chris Elliot (Chair) (from 20 April 2020) Group Captain Jacqueline East (until 11 May 2021) Group Captain Colin Owen (from 11 May 2021) Frances Brindle Graeme Shankland Victoria Fakehinde Air Commodore Paul Hughesdon Scheme Manager: Andy Cairns

~~RAFBF TRADING LIMITED~~

Companies House: 07768120 Directors:

Air Vice-Marshal David Murray (Chair) (until 20 April 2020) Air Vice-Marshal Chris Elliot (Chair) (from 20 April 2020) Graeme Craig James Dooley Victoria Fakehinde Graeme Shankland John Trampleasure (until 4 May 2020) Mike Straney (from 4 May 2020 until 30 April 2021)

~~RAF DISABLED HOLIDAY TRUST~~

Charity Commission: 286019 Trustee: Royal Air Force Benevolent Fund (Reg Charity: 1081009)

~~RAF BENEVOLENT FUND TRUSTEES LIMITED~~

Companies House: 00945083 Directors:

Air Vice-Marshal David Murray (Chair) (until 20 April 2020)

Air Vice-Marshal Chris Elliot (Chair) (from 20 April 2020)

Air Vice-Marshal Simon Dougherty (until 11 May 2020)

Wing Commander Sarah Davis (from 1 June 2020) Victoria Fakehinde

Air Commodore Paul Hughesdon Al Bennett (until 27 May 2021) Emrys Rogers (from 3 August 2020) Dormant entity

~~ROYAL OBSERVER CORPS BENEVOLENT FUND~~

Charity Commission: 209640 OSCR: SCO37659 Trustee:

Royal Air Force Benevolent Fund (Reg Charity: 1081009) Dormant entity

~~RAFBF PROPERTY COMPANY LIMITED~~

Companies House: 10456754 Directors:

Air Vice-Marshal David Murray (Chair)

(until 20 April 2020)

Air Vice-Marshal Chris Elliot (Chair) (from 20 April 2020) Richard Ingham (until 25 March 2021) Air Vice-Marshal Elaine West Air Commodore Paul Hughesdon Victoria Fakehinde Dormant entity

~~THANKING OUR DONORS~~

2Excel Aviation (The Blades)

Adrian Swire Charitable Trust

BAE Systems

Mrs Ann Blowers and Mr Colin Blowers

Charles Burrell 2016 Charitable Settlement

Ms Jane Burrows and Mr Duncan Barber CCM Motorcycles

DXC Technology Forces Mutual

Headley Court Charity Mr John Isabel JH Bartlett Charity Ms Melissa John Knight Sportswear Lockheed Martin MBDA Missile Systems Midshires Mobility Group Mrs Penny Moore Mr Donagh McCullagh Mr Paul Nicholas FRAeS Dr Michael Oliver OBE DL RAFA Amsterdam Branch The April Fools’ Club The Armed Forces Covenant Fund Trust The Beaujolais Run The Hobson Charity The MacRobert Trust

The Robert W. Johnson IV Charitable Trust The Royal Edinburgh Military Tattoo The Scottish Wellbeing Fund The Stafford Trust Wimbledon Foundation

80

81

~~GET IN TOUCH~~

Please contact us today if you know someone who is in need of help or to request help for yourself.

0300 102 1919 mail@rafbf.org.uk rafbf.org/help

Royal Air Force Benevolent Fund 67 Portland Place London W1B 1AR

RAF Benevolent Fund is a registered charity in England and Wales (1081009) and Scotland (SCO38109)

Cobseo The Confederation of Service Charities