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2022-12-31-accounts

NATIONAL FEDERATION OF MUSIC SOCIETIES

Trading as Making Music

Annual Report and Financial Statements

For the year ended 31 December 2022

Company Number 308632

Registered Charity in England and Wales Number 249219

Registered Charity in Scotland Number SC038849

National Federation of Music Societies Annual Report & Financial Statements For the year ended 31 December 2022

Contents

Directors’ and trustees’ report ……………………………………………………………….… 1
Independent auditor’s report ….……………………………….………………………………. 22
Consolidated statement of financial activities ………….…………………………….. 27
Consolidated balance sheet ………………………………………………………………………. 28
Charity balance sheet ……………………………………………………………………………….. 29
Consolidated statement of cashflows ……………………………………………………….. 30
Notes to the financial statements ……………………………………………………………… 31

Westerley Winds, some of whom took their Grade 5 theory exam One Voice Community Choir take part in Make Music Day during the pandemic

National Federation of Music Societies Annual Report For the year ended 31 December 2022

Reference and administrative details

Name of Charity National Federation of Music Societies
trading as Making Music
Company Number 308632
Charity Number 249219 (England)
SC038849 (Scotland)
Principal Office & 8 Holyrood Street
Registered Office London
SE1 2EL
Directors and Trustees Dorothy Wilson MBE FRSA Chair
Clare Birks Vice Chair & Treasurer
Celeste Berteau resigned 11 March 2022
Peter Burchill
Robert Guest
Paul Graham
Rhiannon Harrison
Edward-Rhys Harry appointed 30 May 2022
Nick James appointed 7 September 2022
Paul McKinley
Carol Pemberton MBE
Andrew Rixon
Valerie Taylor
Neil Weir appointed 30 May 2022
Key Management Barbara Eifler Chief Executive
Alison Reeves Deputy Chief Executive
Ben Saffell Membership & Operations Director
Helen Evans Finance Director
Natalie Joanes Communications Director
Bankers CAF Bank Ltd Flagstone Investment Management
25 Kings Hill Avenue Clareville House
West Malling 26-27 Oxendon Street
Kent ME19 4JQ London SW1Y 4EL
Solicitors Bates Wells
10 Queen Street Place
London EC4R 1BE
Independent Auditor Amy S Healey FCA CTA DChA
Lindeyer Francis Ferguson Limited
Chartered Accountants
North House
198 High Street
Tonbridge
Kent TN9 1BE

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

The trustees (who are also the directors of the company for the purposes of company law) present their report together with the audited group and parent charity financial statements for the year ended 31 December 2022. The financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statements and in accordance with the governing document, current statutory requirements and the provisions of "Accounting and Reporting by Charities: 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 (FRS 102)" (effective 1 January 2019) - (Charities SORP).

Cambridge Philharmonic Society

Choir With No Name

Making Music – who we are

Making Music is a charity and the UK association for leisure-time music, with 4,000+ music groups in membership, comprising around 220,000 hobby musicians.

We support our members with practical services and artistic development opportunities, we connect them with each other, the wider sector and relevant other organisations, and we celebrate and advocate for the leisure-time music sector and its benefits – physical, social, psychological, educational, economic - to individuals, communities and policy makers. We seek to ensure that conditions are right for leisure-time music groups to flourish.

Summary of the year

2022 saw groups resume in-person activity with enthusiasm, but some, perhaps fragile before Covid, struggled more than others, particularly when the cost of living crisis then struck them additionally.

This affected members in several ways: their costs rose, for instance for hiring spaces, for regular musical activities and for performances, for their professional music leaders, etc. But their participants were less well-off, too, so members found it difficult, or didn’t want to ask them for a higher contribution to costs (groups strive to be as accessible as they can be). On top of that, groups did not quite regain their pre-Covid income levels in 2022, as 54% of them still renewed membership for 2023 on the lowest subscription band (compared to 46% preCovid, but an improvement on 64% who renewed on the lowest band for 2022).

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Challenges for groups remained around rehearsal spaces and performance venues , related to cost, but also availability and suitability, and around volunteers for committees.

During consultations for our next 5-year plan, members set priorities around finding new participants for their group, growing their audiences, help with becoming more resilient and building better connections in their communities, and for Making Music to work to protect leisure-time music from threats. These priorities are reflected in the plan, published in 2023.

We continued working on Equality, Diversity and Inclusion ; we reviewed our EDI plan; and we wrote Inclusive Work Culture and Learning Culture policies, to support our work in making Making Music an organisation with an inclusive, welcoming and supportive work environment. We changed our staff recruitment process to increase access to opportunities at Making Music by developing anonymised task-based applications. We held one-to-one conversations with our team to understand their challenges and enthusiasm for EDI work, and these will help us build Inclusive Work Culture and Learning Culture plans in 2023.

We were successful with funding applications to the Esmée Fairbairn Foundation (starting August 2022) and Arts Council England (due to start April 2023) to enable us to expand work on inclusion and access with our members, running more events, creating more resources and developing working groups, as well as planning an in-depth support pilot programme with some members selected through open calls for 2023-2025.

We continued our work supporting and encouraging Making Music members to consider the positive ambassador role they can embrace in terms of climate change messaging, and Making Music itself created an Environmental Policy and is working on a detailed plan and set of actions to accompany it, for 2023.

Objectives and activities

What does Making Music do?

Our vision

Everyone has opportunities within reach to make and present their kind of music with others.

Our mission

Making Music is a membership organisation which supports, stands up for and celebrates groups of people making and presenting music together in their leisure time across the UK.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Our objectives

Our current business plan, due to end 2021, was extended for an additional year due to the impossibility of future-gazing whilst the pandemic was still in full flow, therefore Making Music during 2022 continued to …

1. Support members: Help Making Music groups become stronger and better able to connect with new members and audiences.

2. Support members/support leisure-time music: Stand up for and celebrate Making Music groups, their members, and others coming together to make or present music in their leisure time across the UK.

3. Support members/support leisure-time music: Invite and welcome all kinds of music groups to become part of the Making Music community .

How do our activities benefit the public?

Our main activities and who we support are described below. All our charitable activities focus on our charitable objective to ‘maintain, improve and advance education by promoting the art and practice and public performance of music throughout the United Kingdom and in other countries’ and are delivered to further that charitable purpose for the public benefit. The trustees have complied with their duty to have regard to the Charity Commission’s guidance on public benefit when exercising any powers or duties to which the guidance is relevant.

The trustees are confident that Making Music’s activities offer public benefit:

How does society benefit?

Leisure-time music groups made up of hobby musicians create many benefits for the individuals taking part in their musical activity; for the individuals experiencing the resulting performances; and for the communities in which they are active.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

These benefits are created by usually small volunteer-led and run groups. Making Music’s support enables them to continue providing these benefits to individuals and society and facilitates more and different people benefitting by joining or setting up such music groups.

Making Music member

Thanks

The Board would like to thank the staff throughout the UK who continue to put in huge efforts on behalf of members. We are fortunate that every member of staff is deeply committed to the cause of live music-making in communities. In 2022, they continued tirelessly to support members and respond to their needs.

Our thanks also go to the funders who supported activity during 2022. These are: Arts Council England (ACE); Creative Scotland; PRS for Music Foundation; Philip & Dorothy Green Music Trust; Esmée Fairbairn Foundation.

Making Music also owes its 101 volunteers a large debt of thanks and would like to take this opportunity to thank them and pay tribute to their dedication and enthusiasm:

1 President, 13 Board members, 80 Listeners, 7 occasional volunteers.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Achievements and performance

1. Supporting members

Helping Making Music groups become stronger and better able to connect with new members and audiences, practical services and artistic development opportunities.

Our tailor-made affordable insurance covers all aspects of leisure-time music group activity and is made possible by our buying power on behalf of over 3,900 groups.

We offer:

Guidance on Performing Right Society (PRS) responsibilities and a way of declaring and paying PRS royalties for performances in unlicensed venues via us, with a discount. In 2022, activity was recovering from Covid, but had not returned entirely to pre-pandemic levels.

• £70,489 royalties collected from members (2021: £15,634)

Safeguarding guidance, templates, training, online resources, Disclosure & Barring Services checks.

• 290 DBS checks carried out (2021: 259)

Advice and support via email or telephone from friendly and well-trained staff who understand how groups are run and what their issues are; this continued to be an important and valued service in 2022. We also carried on open-access online member meet-ups with break-out rooms facilitated by staff which enabled members to ask questions on topics of concern.

• Over 1,538 phone calls with 880 groups (2021: over 1,315 calls with 981 groups)

200+ online resources in three categories: ‘have to know or do’; ‘help to run the group better’; ‘inspiration for a brighter future’. Resources include written and audio-visual guidance, template policies and contracts, case studies and online tools. In 2022, Making Music continued to produce new resources to support members.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Dissemination of information: Highnotes membership magazine three times a year; iNotes monthly e-newsletter; emails on specific opportunities.

Discounts and subsidies: discounts negotiated with corporate members and partners; subsidies towards cost of engaging professional musicians.

Making Music member

Specific services : e.g. charity registration service, Orchestra Tax Relief (OTR) service, MM Platform (online admin/website template). In 2022, these services continued to be provided, with a strong revival of OTR claims post-Covid.

Promotion: ‘Find a group’ online tool enables the public to discover a leisure-time music group near them; vacancies allow groups to engage the music professionals they need; from events listings the public can discover performances in their area.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Artistic development : Adopt a Music Creator; legacy pieces free to Making Music groups. In 2022, some of the 2019/20 and the 2020/2021 cohort of groups matched with music creators continued working. The last two of the seven 2019/2020 pairings managed to conclude their projects by the end of the year, and five of the 2020/2021 projects. All six 2022 projects concluded in 2022.

Artistic development : support for instrumental group conductors, one event in 2022.

Programming and repertoire inspiration via our online Music Bank database and via Musica International, a choral database to which we subscribe to give our members full access.

Our previously annually published Selected Artists Guide details artists available with subsidies for engagements with leisure-time music groups. The 2020 guide remains valid until it becomes the online Recommended Artists Database on our new website in January 2024.

Events: in 2022, we continued to deliver almost all our events online, involving a high number of members. We ran the annual general meeting, our awards ceremony, a Making Music (consultative) Council, general member meet-ups, separate meet-ups in each UK nation, expert/speaker-led events, and events focussed on specific topics, with high attendance and incredibly positive feedback. We reduced the number of events, as numbers dropped off when people started returning to in person activity and offices/work.

Info & Advice
events		 General meetups
(incl. nation specific)		 Guest speaker
events		 Other
events		 All events
No. of events 29 (49) 17 (28) 9 (10) 10 (6) 65 (93)
Total number of
event attendees		 989 422 660 288 2359 (4159)
Unique attendees 802 330 591 271 1626* (2319)
First-time attendees 396 95 289 97 877 (1484)
Number of unique
groups represented
at events		 664 305 519 n/a 1217* (n/a)

*unique attendees/groups represented overall is not a sum of the numbers in the row, as some were unique at several types of events, but then were only counted once in the end column

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Making Music member

We benefitted 2.2% (2021: 2.2%) more groups:

This breaks down as supporting:

Groups by annual income bracket (previous year):

As groups pay subscription according to income bracket, and this income bracket refers to their previously published accounts, the impact on Making Music of the Covid standstill in activity in 2020/2021 is a delayed one and is most strongly reflected in these 2022 statistics. Renewals for 2023 membership show a strong improvement, i.e. members’ income brackets increasing again, though not yet a full return to pre-Covid levels of their income.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

2. Supporting leisure-time music / supporting members

Stand up for Making Music groups, their members, and others coming together to make or present music in their leisure time across the UK

Since Covid, this strand of our activity has become a more significant part of our activity. We realised that as well as looking to us to make their voice heard by policy makers, leisure-time music groups were asking us for the tools they needed to advocate for themselves and their activity: how should they go about it, and did we have the relevant data and evidence for them to use?

This formed part of a successful application to the Esmée Fairbairn Foundation: empowering the people in our groups to influence. As part of that, as a first step in 2022 we held an online public speaker event about Influencing Locally (21 attendees) and produced resources to help groups understand the mechanisms of local government and how to interact with it. We will be developing this strand over the three years of funding.

It was also time to consult members, other stakeholders and our contacts across the sector in preparation of our next five-year plan , to start from January 2023. Surveys, focus groups and team and Board away days brought to the surface the priorities to focus on from 2023 to 2027 and the plan will be published in 2023.

It was also informed by our Big Survey (formerly Treasurers Survey) which we carried out in the autumn of 2022 for the first time since 2016, giving us valuable data on our members and the leisure-time music sector, with 913 (23%, excellent confidence level of 3%) of 4,000 members responding. The full report will be published in 2023.

1. Covid still formed part of the story

Restrictions were lifted from January 2022, but actually the last remnants lingered until April (Scotland), and groups were also significantly still battling Covid legacies: perhaps fewer members, perhaps members still fearful of returning to activity, perhaps difficulties in regaining the confidence and musical level they had pre-Covid, and in addition starting to be affected by the cost of living crisis: energy cost rises and inflation have mainly meant that their spaces and venues have become more expensive whilst at the same time their own participants’ purchasing power decreased: financially, a difficult place to be.

However, in the latter part of the year it was clear that in terms of energy and enthusiasm the majority of groups were bouncing back to pre-Covid levels of activity and performances.

2. Non-Covid challenges definitely were the prominent strand of the story

The campaign by the Association of British Orchestras and others, supported by Making Music, led to the increased Orchestra Tax Relief introduced in the autumn 2021 budget being extended again in the March 2023 budget, until April 2025, significantly supporting member activity. During 2022, Making Music passed the milestone of having helped members claim £0.5 million through this creative tax relief. Making Music also started piloting the introduction of a similar service for Theatre Tax Relief.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Music libraries: (provision of multiple copies of sheet music via the public library system) Where public libraries were struggling pre-Covid, for financial reasons, this has not improved post-Covid. However, the New Surrey Performing Arts Library (NewSPAL) which Making Music has been supporting as an innovative new model finally managed to open its doors to the public in September, five years after a campaign was launched to prevent the closure or dispersal of this collection, one of the three largest in the UK.

Music Libraries Trust (MLT) in collaboration with Making Music and the International Association of Music Librarians – UK and Ireland Branch published a Music Libraries Vision which has made recommendations to help take the national/UK wide discussion further in terms of coordination of resources and online access to them.

PRS for Music resumed their consultation on the Live Classical Tariff which had been paused due to Covid. Making Music was delighted that the organisation listened to the submissions from us and our members as to the particular needs of the leisure-time music sector and in February 2023 announced that amateur groups would be eligible for a 50% discount on the professional royalty rates.

Music education saw the publication in England of the second version of the National Plan for Music Education; and in Wales the publication of the first of such plans. Making Music met with or submitted information to those creating and re-writing those plans, to ensure adult community music was considered as a progression route for young people, as well as making a submission to Professor Hayward’s Independent Review of Qualifications and Assessment (Scotland), arguing for the recognition of community music activity as part of a young person’s school qualifications.

We also attended a (Westminster) All Party Parliamentary Group on music education and one on adult education and remained part of the Music Education Council (UK wide) and the Music Education Partnership Group (Scotland) and took part in a round table hosted by ABRSM on potential qualifications for adults and ensembles. One of our public speaker events was on Music education for under-18s and adult leisure-time music (110 attendees), seeking to help members and policy makers connect the dots on this issue.

Consultations:

Levelling Up for Culture inquiry by the DCMS Select Committee; Making Music consulted with members and submitted a response with a significant number of case studies included. The final report, however, seems a missed opportunity to consider the role that leisure-time music in the community could play in the government’s levelling up agenda, despite us and several other networks putting forward strong arguments. This is disappointing because our members’ ability to thrive depends strongly on local infrastructure; recognition at a UK level would help make that case to local authorities for keeping infrastructure intact or developing it in order to benefit from the positive impacts of community music activity in their area. Responded to the Scottish inquiry Budget scrutiny 2023-24 Funding for culture .

Following a link-up with the Local Government Association we were invited to contribute to their Commission on Culture and Local Government whose final report is a useful piece of evidence to show the impact of community activity and how our members and the leisuretime music sector contribute to local areas.

We continued to notice that performance venues and spaces for regular musical activity (e.g. rehearsals) were increasingly an issue for the sector and so started preparatory work for a major piece of work and campaign from 2023 onwards, including meeting with Community Matters, the network supporting urban community halls, and Creative Lives who are also working on this issue, carrying out a small-scale in-depth survey with members in one area, and including a number of questions on this topic in our Big Survey (autumn 2022).

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

3. Advocacy, networking, representation

Speaker-led public events

We continued this highly successful series of events, which are available to anyone (including non-members) and held on Zoom, featuring experts on a particular topic and allowing 30-45 minutes for audience questions, meaning attendees generally are able to have access to experts for their particular queries.

Topics for 2022 were:

Singing Network UK, hosted and convened by Making Music, is a free network of over 30 UK umbrella organisations with an interest in singing. It met three times via Zoom during 2022, with invited speakers covering topics including:

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Events we spoke at/publications on behalf of members and the sector during 2022:

Events we attended on behalf of members and the sector during 2022:

Organisations/policy makers we met with on behalf of members and the sector in 2022:

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Formulated 3 asks for the local elections in England, Wales and Scotland, and local and NI Executive elections in Northern Ireland, for members to discuss with prospective candidates, focussing on spaces (suitable, affordable, for regular musical activity and performance), support (transport, licensing, music libraries etc.) and recognition (of benefits and impact of leisure-time music), with accompanying visual material to display or hand out.

Were on the judges’ panels for Creative Lives’ Wales awards; Royal Philharmonic Society’s Inspiration Award

Amateo, the European Network for active participation in cultural activities. Our CEO continues as Treasurer on the Board of this network and presented a provocation, on listening to communities, at their annual conference in Dublin Music Libraries Trust, our CEO continues on the Board of this charity

Celebrate Making Music groups, their members, and others coming together to make or present music in their leisure time across the UK

Promoted leisure-time music groups via our online Find a Group tool, our Events calendar, our communications, including Highnotes magazine, iNotes e-newsletter, Selected Artists Guide, PR, social media (Twitter, Facebook and Instagram).

Offered performance opportunities to groups, e.g. on Make Music Day (21 June annually), to highlight the achievements and offer of leisure-time music groups to a wider public, locally, nationally and internationally.

Make Music Day (21 June). Making Music instigated or curated events for members to perform at took place in Enniskillen, Wrexham, Glasgow and London. We contributed to the UK segment of the worldwide 12 hour broadcast coordinated by the Make Music Day UK team. Making Music CEO Barbara Eifler continues to chair the Board of Make Music Day UK.

Developed broadcast opportunities , e.g. Classic FM annual broadcast of carols by Making Music groups; BBC Radio 3 broadcast of Adopt a Music Creator project new pieces, including interviews, to raise the profile of groups and the sector.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

We continued with the awards started in 2020, our President, Debbie Wiseman OBE, announcing winners and presenting the awards in an online award ceremony.

The 2022 winners were:

We contributed nominations to the Royal Philharmonic Society’s new Inspiration Award and sat on the judging panel to shortlist.

We re-appointed Debbie Wiseman OBE as President .

3 . Supporting leisure time music / supporting members

Invite and welcome all kinds of music groups to become part of the Making Music community

What we did in 2022

Our Equality, Diversity and Inclusion work developed significantly during 2022. Once again we updated our EDI Plan, and focussed work on three parts to this work:

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Plans for future periods

Specific plans and focus for 2023

Financial review

Financial result for 2022

Once again, we have withstood a difficult year. Although total net expenditure of £71,534 (2021: £22,937) demonstrates a further year of falling reserves, this reflects planned spending of restricted and designated funds and masks another successful, minimal call on unrestricted general funds. While total reserves fell by 9% this year, free reserves fell by less than 2%. This has allowed us to remain within our reserves policy of retaining unrestricted general funds equivalent to 3 to 6 months’ unrestricted expenditure.

Total income of £702,779 (2021: £721,305; 2020: £759,403) included membership subscription income of £450,454 (2021: £456,062; 2020: £500,099). Our member subscriptions are based on the income of our members during the preceding year, so this was the second year that our income was affected by our members’ restricted ability to earn income from concerts, events and subscriptions during the Covid-19 lockdowns of 2020 and 2021.

Although we have successfully retained and grown our membership over the course of the pandemic, with year-on-year growth of 2.6% (2021: 2.3%) many of our members continued to renew at our lowest subscription rate. This meant for a second year, we supported more

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

members but with reduced income. Despite implementing strategies to target new members, it proved difficult to increase market penetration above the norm achieved in the years preceding the pandemic.

The shortfall in subscription income this year was bridged by income from paid member services and a successful three-year application for unrestricted funding from the Esmée Fairbairn Foundation (EFF), starting August 2022.

Total expenditure for the year was £770,619 (2021: £761,166; 2020: £766,513). Inflationary pressures meant it was impossible to continue the rigid cost control we had applied in 2021. Our staff team is our most valuable asset and, as the cost of living increased, it was imperative to review staff salaries which had been frozen since 2019. In early 2022, the Board approved a new remuneration policy and awarded staff a pay increase delivered in two stages from April and September 2022. The EFF grant funded the recruitment of two new part-time posts in Autumn 2022 to relieve staff pressure and support increasing demand for our member services.

Consolidated cash balances of £1,312,444 at 31 December 2022 (2021: £1,378,263) include deferred membership subscription income collected for 2023 and insurance premiums and PRS fees collected from members to be paid over to third parties in early 2023. Net current assets of £606,194 (2021: £665,947) provide a more accurate picture of working capital.

The trading subsidiary, NFMS Enterprises Limited, generated a profit of £12,324 (2021: £7,013) which was donated to the charity under covenant.

Reserves Position

Total funds held at the end of the year were £753,537 (2021: £825,071), the reduction reflecting planned expenditure of restricted and designated funds.

Of these funds, £325,275 (2021: £329,264) were held in a permanent endowment fund and £108,952 (2021: £131,967) were held in funds for restricted purposes.

Unrestricted funds of £319,310 (2021: £363,840) included £49,445 (2021: £80,722) held in designated funds to spend on projects in 2023 and 2024, including £42,545 towards the development of a new website and digital delivery portal.

The remaining unrestricted general funds of £269,865 (2021: £283,118) include £11,533 (2021: £19,620) which can only be realised by disposing of fixed assets. This leaves free reserves of £258,332 (2021: £263,498), an annual fall of less than 2%.

Reserves Policy

It is the policy of the charity to maintain adequate reserves to cover between 3 and 6 months of unrestricted expenditure, in normal circumstances. This target has been set because the charity has a high committed cost base. Staff costs account for approximately 60% of expenditure, with our staff team vital to providing services paid for in advance by our members. The second largest cost is office rent, with a five-year lease commitment remaining until 2025.

Unrestricted funds at 31 December 2022 were £319,310 (2021: £363,840). After deducting designated funds and fixed assets, the remaining free reserves of £258,332 (2021: 263,498) represent 4.9 months’ (2021: 5.9 months’) of unrestricted expenditure, excluding depreciation (based on current year figures) which is within the parameters of the reserves policy.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Investment Policy

The Board reviewed its Investment Policy during the year, finalising and approving a new policy in February 2023. The policy recognises two distinct pools of funds available for investment:

The capital value of the CAF Equitrack Fund decreased by £3,694 this year to £135,810, (2021: an increase of £16,924 to £139,504). The capital value represents an increase of 13% in the amount originally invested (most recent addition in 2016). Investment income earned by the fund in the year was £4,523 (2021: £4,082).

Since the end of the year, the Board has been notified that the CAF Equitrack Fund will close in April 2023 and has decided to reinvest funds in the IFSL CAF ESG Income and Growth Fund to ensure consistency with the charity’s ethical policies and values.

Going Concern and the Financial Impact of Covid-19

Despite a further fall in income this year, we have carefully managed our free reserves and retained our dedicated staff team to support an increasing number of member groups during the year.

We have drawn minimally from our unrestricted free reserves. Our financial forecasts for 2023 and 2024 expect to see a return to unrestricted net income.

Since the end of the financial year, membership retention for 2023 has remained steady with 95% of member groups renewing their subscription (2022: 95%). This reflects the resilience of our member groups and the value they place on their membership of Making Music.

However, 54% of members still renewed at the lowest subscription rate for 2023, an improvement compared to 64% for 2022, but not yet returning to 46% for 2020. This reflects the ongoing impact of the pandemic on our members’ income. As total memberships exceeded 4,000 for the first time in 2022, we will be supporting more members but with significantly reduced income.

We are fortunate the timing of membership renewals and other income streams is heavily weighted to the first quarter of the year. By 31 March 2023, 88% of forecast income for 2023 had been earned, allowing us to make effective financial plans for the rest of the year.

At the date of approving the report and accounts, the Board believes there are no material uncertainties about the charity’s ability to continue as a going concern and the financial statements are prepared on a going concern basis.

The Board’s Finance & Compliance committee continues to monitor the developing economic situation, reviewing management accounts and reforecasts for 2023 and draft budgets for future years on a regular basis.

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Other Principal Risks and Uncertainties

The Board has carried out a review of the major risks to which the charity is exposed and has put in place controls and activities to mitigate those risks which are within their control to influence.

Risk Impact x
Likelihoo
d		 Mitigation
Loss of group
membership		 5 x 3 = 15
(medium)		 - Listen to sector on needs and deliver accordingly
- Maintain & develop services and deliver them effectively
- Focus on retention and recruitment
- Support & development of staff team
Lack of
financial
sustainability		 5 x 3 =15
(medium)		 - Prioritise member recruitment & retention
- Develop earned income in our control
- Help members maximise their income
~~- ~~External funding raised
- Contain costs & keep reserves under review
- Option to borrow from Endowment Fund from Spring 23
Weak
governance		 4 x 3 = 12
(medium)		 - Ensure vision, mission, objectives and plan clear to Board, staff and
members
- Invest time and care in Board communications, development,
induction & skills balance
- Policies, procedures & processes in place with compliance oversight &
training for staff, Board and volunteers
- Keep abreast of regulatory changes and best practice
- Seek professional advice where appropriate
- Biannual review of risk assessment
- Constitution amended to increase co-opted Board members
Infrastructure
/ Resources
failure		 5 x 3 = 15
(medium)		 - Strong focus especially on up-to-date and fit for purpose IT
infrastructure
- Strong focus on cyber security and secure data management training
and processes
- Appropriate insurance policies
- Best practice HR management, focusing on support and development
of staff
- Funding secured to add to staff capacity
- Annual pay review, staff engagement survey, flexible/hybrid working
arrangements
Reputational
damage		 3 x 2 = 6
(low)		 - External representation guidelines for staff and Board
- Emergency media plan in place
- Communicating regularly within sector to foster understanding
- Careful consideration of lobbying, advocacy & campaigning
- Timely & appropriate response to public comments
Negative
impact of
environment		 4 x 3 = 12
(medium)		 - Regular and systematic monitoring of external environment for
potential threats
- Regular management meetings to evaluate and respond to changing
circumstances
- Addressing potential threats through proactive joint action with
others
- Supporting members to recognise and respond to threats

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National Federation of Music Societies Annual Report For the year ended 31 December 2022

Structure, governance and management

Making Music is the trading name of the National Federation of Music Societies (NFMS). Its governing documents are its Memorandum and Articles of Association. At the Extraordinary General Meeting on 7 September 2022, these were updated to the new format Articles of Association and changes approved by members to the number of terms trustees could serve, and some other modernising alterations.

As well as being a registered charity in England and Wales, Making Music (NFMS) is a registered charity in Scotland and is a company limited by guarantee.

Making Music’s Board of Directors is made up of 9 trustees elected by and from the membership and up to 5 trustees co-opted by the Board of Directors. The Chair, Vice Chair and Honorary Treasurer are elected by the Board from among their number and can serve in their role for up to two terms of three years each. Co-opted trustees can serve one term of three years each.

Every year, a third of elected trustees retire. Retiring trustees can put themselves forward again for election for a maximum two terms of three years each. A call is put out to members for nominations and when there are more nominations than vacancies, an election is held (this is usually the case), with the result announced at the Annual General Meeting.

When a new trustee is appointed or co-opted, they receive a full day induction from the Chief Executive and Chair, including on procedures, policies, strategy, and have an opportunity to meet all the staff of the charity.

Organisation

Overall responsibility for the Charity’s strategy and direction rests with the Board of Trustees, which comprises all Directors. The carrying out of day-to-day activities is delegated to the staff under the management of the Chief Executive and Senior Management Team.

A remuneration committee of the Board sets the pay structure for all staff.

Subsidiaries

The charity has a trading subsidiary, NFMS Enterprises Ltd, whose accounts are reported separately and are consolidated into these accounts.

Music creator Carmel Smickersgill leading an Adopt a Music Creator recording session with Junior Leeds College of Music Ensemble Creative

Keswick Choral Society

20

National Federation of Music Societies Annual Report For the year ended 31 December 2022

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual Report and accounts in accordance with applicable law and regulations.

The Trustees are the company’s Directors. Company law requires the Directors to prepare accounts for each financial year. Under that law they have elected to prepare the accounts in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the surplus or deficit of the company for that period. In preparing these accounts, the Directors are required to:

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions, disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the accounts comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

In accordance with company law, the trustees, as the company’s Directors, certify that:

This report was approved by the Board on 22 May 2023.

By order of the Board

Clare Birks Vice Chair and Treasurer

21

National Federation of Music Societies Independent Auditor’s Report to the Trustees For the year ended 31 December 2022

Opinion

We have audited the financial statements of National Federation of Music Societies (“the parent charitable company”) and its subsidiary (together “the group” for the year ended 31 December 2022, which comprise the Consolidated Statement of Financial Activities, Consolidated Balance Sheet, Charity Balance Sheet, Consolidated Statement of Cash Flows, and the notes to the financial statements, including a summary of 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).

In our opinion, the financial statements:

Basis for opinion

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 charitable company 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 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 Parent Charitable Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

22

National Federation of Music Societies Independent Auditor’s Report to the Trustees For the year ended 31 December 2022

Other information

The other information comprises the information included in the trustees’ report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report included within the trustees’ report.

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

23

National Federation of Music Societies Independent Auditor’s Report to the Trustees For the year ended 31 December 2022

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 21, the trustees (who are also the directors of the parent charitable company for the purposes of company law) 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 parent charitable company’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 charitable company 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 auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with the Acts and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the 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.

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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

We obtained an understanding of the legal and regulatory framework applicable to the preparation of the financial statements of the group, and the procedures that management adopt to ensure compliance. We have considered the extent to which non-compliance might have a material effect on the financial statements, and in particular we identified: [the Companies Act 2006, the Charities Act 2011, Charities SORP, Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006.

We have also identified other laws and regulations that do not have a direct effect on the amounts or disclosures within the financial statements, but for which compliance is fundamental to the group’s operations and to avoid material penalties, including GDPR, employment law, and health and safety regulations.

24

National Federation of Music Societies Independent Auditor’s Report to the Trustees For the year ended 31 December 2022

Having reviewed the laws and regulations applicable to the group, we designed and performed audit procedures to obtain sufficient appropriate audit evidence. Specifically, we:

We assessed the susceptibility of the group’s financial statements to material misstatement, including considering how fraud might occur. This was performed by:

We then designed audit procedures in response to the risks identified, including reviewing journal entries, assessing management estimates and judgements, performing substantive analytical review supported by testing of underlying controls for income and deferred income, and corroborating the website costs accounting treatment to underlying documentation.

The audit has been planned and performed in in accordance with auditing standards, however, because of the inherent limitations of audit procedures there remains a risk that we will not detect all irregularities, including those that may lead to material misstatements in the financial statements. There are inherent difficulties in detecting irregularities, and irregularities that result from fraud may be more difficult to detect than irregularities that result from error, for example due to concealment, override of controls, collusion or misrepresentations. In addition, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less audit procedures are able to identify it.

25

National Federation of Music Societies Independent Auditor’s Report to the Trustees For the year ended 31 December 2022

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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 charitable company’s members, as a body, in accordance with Chapter 3 of part 16 of the Companies Act 2006, and to the charitable company’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the parent charitable company’s members and 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 charitable company, the parent charitable company’s members as a body and the parent charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

A S Healey FCA CTA DChA (Senior Statutory Auditor) For and on behalf of: Lindeyer Francis Ferguson Limited Statutory Auditor Chartered Accountants North House 198 High Street Tonbridge Kent TN9 1BE

Date: 31 May 2023

26

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCLUDING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2022

2022 2022 2022 2022 2021
Unrestricted Restricted Endowment Total Total
funds funds funds funds funds
Note £ £ £ £ £
Income from:
Donations and legacies 3 39,829 73,369 - 113,198 165,617
Charitable activities 4 535,601 - - 535,601 518,984
Other trading activities 5 39,555 - - 39,555 29,327
Interest and dividends 5,845 8,580 - 14,425 7,377
Total 620,830 81,949 - 702,779 721,305
Expenditure on:
Raising funds 6 16,085 - - 16,085 13,743
Charitable activities 7 649,275 104,964 295 754,534 747,423
Total 665,360 104,964 295 770,619 761,166
Net (losses)/gains on
investments 12 - - ( 3,694) ( 3,694) 16,924
Net expenditure for the year 8 ( 44,530) ( 23,015) ( 3,989) ( 71,534) ( 22,937)
Transfers between funds - - - - -
Net movement in funds ( 44,530) ( 23,015) ( 3,989) ( 71,534) ( 22,937)
Reconciliation of funds:
Total funds brought forward 363,840 131,967 329,264 825,071 848,008
Total funds carried forward 15 319,310 108,952 325,275 753,537 825,071

27

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2022

Note
Fixed assets
Intangible assets
10
Tangible assets
11
Investments
12
Current assets
Debtors
13
Cash at bank and in hand
Creditors:amounts falling due
within one year
14
Net current assets
Total net assets
The funds of the charity:
Endowment funds
Restricted funds
Unrestricted funds
15		 2022
£
190,957
1,312,444
1,503,401
( 897,207)		 2022
£
-
11,533
135,810
147,343
606,194
753,537
325,275
108,952
319,310
753,537		 2021
£
84,053
1,378,263
1,462,316
( 796,369)		 2021
£
-
19,620
139,504
159,124
665,947
825,071
329,264
131,967
363,840
825,071

The financial statements were approved by the Board of Trustees on 22 May 2023 and were signed on its behalf by:

Clare Birks

Trustee

28

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

CHARITY BALANCE SHEET AS AT 31 DECEMBER 2022

Note
Fixed assets
Intangible assets
10
Tangible assets
11
Investments
12
Current assets
Debtors
13
Cash at bank and in hand
Creditors:amounts falling due
within one year
14
Net current assets
Total net assets
The funds of the charity:
Endowment funds
Restricted funds
Unrestricted funds
15		 2022
£
223,761
1,277,141
1,500,902
( 894,712)		 2022
£
-
11,533
135,814
147,347
606,190
753,537
325,275
108,952
319,310
753,537		 2021
£
88,248
1,373,062
1,461,310
( 795,367)		 2021
£
-
19,620
139,508
159,128
665,943
825,071
329,264
131,967
363,840
825,071

The financial statements were approved by the Board of Trustees on 22 May 2023 and were signed on its behalf by:

Clare Birks Trustee

Company number: 308632

29

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2022

Note
Cash flows from operating activities:
Net cash (used in) operating activities
A
Cash flows from investing activities:
Dividends and interest from investments
Proceeds from sale of piano
Purchase of tangible fixed assets
Net cash provided by / (used in) investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
A. Reconciliation of net income / (expenditure) to net cash flow from
operating activities
Net (expenditure) for the year
Depreciation and amortisation charges
Losses/(gains) on investments
Dividends and interest from investments
(Gains) on sale of fixed assets
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Net cash (used in) operating activities		 2022
£
( 78,704)
14,425
-
( 1,540)
12,885
( 65,819)
1,378,263
1,312,444
( 71,534)
9,627
3,694
( 14,425)
-
( 106,904)
100,838
( 78,704)		 2021
£
( 41,443)
7,377
16,667
( 8,093)
15,951
( 25,492)
1,403,755
1,378,263
( 22,937)
14,896
( 16,924)
( 7,377)
( 2,867)
31,390
( 37,624)
( 41,443)

30

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

1 ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared in accordance with "Accounting and Reporting by Charities: 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 (FRS 102)" (effective 1 January 2019) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Making Music meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). There are no material uncertainties about the charity's ability to continue, and so the going concern basis of accounting has been adopted.

The financial statements are presented in pounds sterling and rounded to the nearest pound.

Basis of consolidation

The consolidated financial statements incorporate those of Making Music and its wholly owned subsidiary undertaking, NFMS Enterprises Limited. All intra-group transactions and balances are eliminated on consolidation.

Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

Income

Income from donations and grants is recognised when the charity is entitled to the funds, the receipt is probable and the amount can be measured reliably. For donations, this is usually on receipt. For grants, this is usually when a formal offer is made in writing, unless the grant contains terms and conditions outside of the charity's control which must be met before the charity is entitled to the funds. Where grants are received in response to a proposal including a budgeted timescale, such that the timescale for the expenditure is implicit in the grant agreement, the income is recognised in accordance with that timescale.

Income from legacies is recognised when there has been a grant of probate, the executors have established that there are sufficient assets in the estate to pay the legacy, and any conditions attached are within the control of the charity or have already been met.

Income from charitable activities is recognised over the period to which the income relates. Membership subscriptions are recognised on a straight line basis over the term of the subscription.

Gifts in kind are only included in the financial statements when the charity is entitled to them, when it is probable that the charity will receive the economic benefits, and when the fair value or value to the charity, as appropriate, can be measured with sufficient reliability.

Investment income is recognised when receivable. Interest is accounted for as accrued income where is it due but has not yet been credited.

31

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

1 ACCOUNTING POLICIES continued

Expenditure

Expenditure is recognised when a present legal or constructive obligation exists at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefits will be required to settle the obligation, and the amount can be estimated reliably.

Grants payable are recognised when a commitment has been communicated to the beneficiary.

Staff costs have been allocated to expenditure headings on the basis of an estimate of the amount of time spent by staff members in each area.

Support costs have been allocated to charitable activities on the basis of direct staff costs.

Support costs are those functions that assist the work of the charity but do not directly relate to the charitable activities, and include governance costs.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for the particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

The permanent endowment fund relates to a legacy from Philip & Dorothy Green for young musicians. The net income is transferred to a separate restricted fund.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated realisable value of each asset over its expected useful life, as follows:

Fixtures, fittings and equipment 7-33% on the reducing balance basis Computers and website 33% on the straight line basis Piano 8% on the straight line basis

Assets costing less than £500 are not capitalised but are recognised as expenditure in the Statement of Financial Activities in the year incurred.

Intangible fixed assets and amortisation

Intangible fixed assets are recognised when it is probable that future economic benefits will be realised and the cost or value of development can be measured reliably. They are stated at cost less amortisation.The cost of the asset comprises its purchase price and directly attributable costs of preparing the asset for its intended use. This includes employee costs arising from the generation of the intangible asset. Expenditure on research is expensed. Completed assets are amortised over their useful economic life.

Music catalogue copyright licences

5% on the straight line basis

Investments

Listed investments are stated at fair value. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading "Net gains/(losses) on investments" in the Statement of Financial Activities.

Investments in subsidiary undertakings are stated at the lower of cost and net realisable value.

32

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

1 ACCOUNTING POLICIES continued

Financial instruments

Other than listed investments, the charity only has financial instruments of a kind that qualify as basic financial instruments. Short term basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense. The cost of any unused holiday entitlement is recognised in the period to which the entitlement relates.

Payments to defined contribution pension schemes are charged as an expense as they fall due.

Leasing

Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

2 STATUS

Making Music is a charitable company limited by guarantee incorporated in England and Wales. In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. The address of the registered office is 8 Holyrood Street, London SE1 2EL.

3 INCOME FROM DONATIONS AND LEGACIES

Donations
Grants
Legacies		 2022
£
23,892
89,209
97
113,198		 2021
£
25,420
134,625
5,572
165,617

In the preceding period, donation income of £134,463 and total income of £139,618 was restricted.

In 2021, Making Music received various gifts in kind towards Make Music Day 2021, including musical arrangements and event and marketing support from Music for All, Team London Bridge, Hal Leonard Europe and other partner organisations. The value of these gifts could not be estimated with sufficient reliability for inclusion in the financial statements. The activities of Make Music Day transferred to a new organisation in 2022.

4 INCOME FROM CHARITABLE ACTIVITIES

Membership subscriptions
Member services		 2022
£
450,454
85,147
535,601		 2021
£
456,062
62,922
518,984

33

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

5 INCOME FROM OTHER TRADING ACTIVITIES

Advertising
Rental income
Other income
6
EXPENDITURE ON RAISING FUNDS
Staff costs
Advertising agent commission
Other fundraising costs
7
EXPENDITURE ON CHARITABLE ACTIVITIES
2022
£
Staff costs
321,329
Direct costs
85,090
Publication costs
24,806
Promoter subsidies
4,499
Event costs
1,837
Grants payable
8,350
Support costs allocated
188,085
633,996
Support costs comprise:
Support staff costs
Other staff costs
Marketing
Premises and office costs
Depreciation
Legal and accountancy fees
Other costs
Governance costs:
Trustee expenses
Audit fees
Supporting
members		 2022
£
61,533
22,988
-
-
-
-
36,017
120,538
Supporting
leisure-time
music		 2022
£
22,951
16,000
604
39,555
2022
£
6,397
8,001
1,687
16,085
2022
Total
£
382,862
108,078
24,806
4,499
1,837
8,350
224,102
754,534
79,072
6,745
25,542
88,168
9,627
2,034
5,089
925
6,900
224,102		 2021
£
17,226
8,899
3,202
29,327
2021
£
5,331
6,267
2,145
13,743
2021
Total
£
344,304
159,496
22,266
5,537
633
4,600
210,587
747,423
81,911
5,257
15,997
79,679
14,896
2,682
3,197
618
6,350
210,587

In the preceding period, expenditure of £188,420 came from restricted and endowment funds.

34

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

8 NET EXPENDITURE

NET EXPENDITURE
2022 2021
£ £
Net expenditure is stated after charging/(crediting):
Depreciation 9,627 14,896
Auditors' remuneration for audit services 6,900 6,350
Auditors' remuneration for non-audit services 185 985
Operating lease rentals 38,887 39,476

As permitted by s408 Companies Act 2006, the parent charity has not presented its own Statement of Financial Activities and related notes. The parent charity's net expenditure for the year before investment gains/losses was £80,164 (2021: net expenditure £46,875).

9 STAFF COSTS

STAFF COSTS
Gross salaries
Employer's National Insurance contributions
Employer's pension contributions
Redundancy payment		 2022
£
420,541
35,364
12,426
-
468,331		 2021
£
387,303
30,346
11,749
2,148
431,546

No termination payments were paid during the period (2021: one).

There were no employees with employment benefits (excluding employer pension contributions) of more than £60,000 in the current nor preceding period.

At the balance sheet date, there were no unpaid pension contributions (2021: £14).

The average number of employees during the year was 16 (2021: 17). The average number of full-time equivalent employees was 12 (2021: 12).

10 INTANGIBLE FIXED ASSETS

INTANGIBLE FIXED ASSETS
Group and charity
Cost brought forward and carried forward
Amortisation brought forward and carried forward
Net book value at 31 December 2021 and 2022		 £
1,500
1,500
-

Towards the end of the year, the charity made a contractual commitment of £83,589 for the development of a new website and digital delivery portal in 2023 which is due for delivery in early 2024 and will be treated as an intangible fixed asset. Research expenditure for this project of £21,778 was recognised as expenditure in 2022, funded by a designated fund set aside for this purpose in previous years. This research cost will not be capitalised as part of the cost of the intangible asset.

35

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

11 TANGIBLE FIXED ASSETS

Group and charity
Cost
Brought forward at 1 January 2022
Additions
Disposals
Carried forward at 31 December 2022
Depreciation
Brought forward at 1 January 2022
Charged for the year
Disposals
Carried forward at 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
12
INVESTMENTS
Group
Listed investments
Fair value at 1 January 2022
Unrealised gains and losses
Realised gains and losses
Per Statement of Financial Activities		 Fixtures,
fittings and
equipment
£
17,426
-
-
17,426
10,963
647
-
11,610
5,816
6,463		 Computers
and website
£
132,733
1,540
-
134,273
119,576
8,980
-
128,556
5,717
13,157
2022
£
139,504
( 3,694)
135,810
-
( 3,694)		 Total
£
150,159
1,540
-
151,699
130,539
9,627
-
140,166
11,533
19,620
2021
£
122,580
16,924
139,504
-
16,924

In addition, the charity has an investment of £4 (2021: £4), being a holding of 100% of the ordinary share capital, in NFMS Enterprises Limited (company number 02844532), its trading subsidiary. NFMS Enterprises Limited is a company registered in England and Wales with number 02844532. Its registered office is 9 Holyrood Street, London SE1 2EL. All of its profits are convenanted to the parent charity.

The subsidiary contributed turnover of £68,504 (2021: £48,001), expenditure of £56,180 (2021: £40,988) and a profit to the charity of £12,324 (2021: £7,013). At the balance sheet date, the subsidiary had net assets of £4 (2021: £4).

36

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

13
DEBTORS
Group
2022
£
Trade debtors
77,736
Amounts owed by group undertakings
-
Prepayments and accrued income
113,060
Other debtors
161
190,957
14
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group
2022
£
Trade and other creditors
378,780
Deferred subscription income
426,823
Accruals and other deferred income
76,719
Tax and social security
14,885
897,207		 Group
2021
£
53,202
-
30,476
375
84,053
Group
2021
£
380,592
378,657
34,786
2,334
796,369		 Charity
2022
£
73,788
38,981
110,831
161
223,761
Charity
2022
£
378,704
426,823
75,346
13,839
894,712		 Charity
2021
£
52,783
7,014
28,076
375
88,248
Charity
2021
£
380,591
378,657
33,509
2,610
795,367

Included in trade and other creditors are insurance premiums of £250,068 (2021: £351,743) collected from members by Making Music as agent on behalf of the insurer. Also included are PRS contributions of £3,653 (2021: £15,175) collected from members to be remitted to PRS after the year end.

The movement on deferred membership subscriptions is as follows:

Group and charity
Balance at 1 January 2022
Released to income
Received in the year and deferred
Balance at 31 December 2022		 2022
2021
£
£
378,657
405,777
( 378,657)
( 405,777)
426,823
378,657
426,823
378,657

37

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

15 MOVEMENT ON FUNDS

CURRENT YEAR
Permanent endowment
Philip and Dorothy Green endowment fund
Restricted funds
Philip and Dorothy Green income fund
Adopt a Music Creator
P & D Green Young Artists fund
Make Music Day
Other restricted funds
Unrestricted funds
Designated funds
General fund
Total funds
Current year net movement comprises:
Permanent endowment
Philip and Dorothy Green endowment fund
Restricted funds
Philip and Dorothy Green income fund
Adopt a Music Creator
P & D Green Young Artists fund
Make Music Day
Other restricted funds
Unrestricted funds
Designated funds
General fund
Total funds		 Brought
forward
£
329,264
106,308
-
-
16,851
8,808
131,967
80,722
283,118
363,840
825,071
Income
£
-
25,560
50,000
-
2,235
4,154
81,949
-
620,830
620,830
702,779		 Net
movement
£
( 3,989)
25,360
( 12,716)
( 18,894)
( 16,851)
86
( 23,015)
( 26,277)
( 18,253)
( 44,530)
( 71,534)
£
( 295)
( 200)
( 62,716)
( 18,894)
( 19,086)
( 4,068)
( 104,964)
( 26,277)
( 639,083)
( 665,360)
( 770,619)
Expenditure		 Transfers
£
-
( 55,610)
36,716
18,894
-
-
-
( 5,000)
5,000
-
-
Gains/
(losses)
£
( 3,694)
-
-
-
-
-
-
-
-
-
( 3,694)		 Carried
forward
£
325,275
76,058
24,000
-
-
8,894
108,952
49,445
269,865
319,310
753,537
Net movement
£
( 3,989)
25,360
( 12,716)
( 18,894)
( 16,851)
86
( 23,015)
( 26,277)
( 18,253)
( 44,530)
( 71,534)

38

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

15 MOVEMENT ON FUNDS continued

PRIOR YEAR
Permanent endowment
Philip and Dorothy Green endowment fund
Restricted funds
Philip and Dorothy Green income fund
Adopt a Music Creator
P A Thompson fund
P & D Green Young Artists fund
Make Music Day
Arts Council England CRF2
Other restricted funds
Unrestricted funds
Designated funds
General fund
Total funds
Prior year net movement comprises:
Permanent endowment
Philip and Dorothy Green endowment fund
Restricted funds
Philip and Dorothy Green income fund
Adopt a Music Creator
P A Thompson fund
P & D Green Young Artists fund
Make Music Day
Arts Council England CRF2
Other restricted funds
Unrestricted funds
Designated funds
General fund
Total funds		 Brought
forward
£
312,579
124,982
18,968
12,100
-
15,205
-
6,498
177,753
91,936
265,740
357,676
848,008
Income
£
-
21,102
-
-
-
66,513
44,429
10,351
142,395
-
578,910
578,910
721,305		 Net
movement
£
16,685
20,912
( 37,643)
( 12,100)
( 19,477)
1,646
-
876
( 45,786)
( 21,214)
27,378
6,164
( 22,937)
£
( 239)
( 190)
( 37,643)
( 12,100)
( 19,477)
( 64,867)
( 44,429)
( 9,475)
( 188,181)
( 21,214)
( 551,532)
( 572,746)
( 761,166)
Expenditure		 Transfers
£
-
( 39,586)
18,675
-
19,477
-
-
1,434
-
10,000
( 10,000)
-
-
Gains/
(losses)
£
16,924
-
-
-
-
-
-
-
-
-
-
-
16,924		 Carried
forward
£
329,264
106,308
-
-
-
16,851
-
8,808
131,967
80,722
283,118
363,840
825,071
Net movement
£
16,685
20,912
( 37,643)
( 12,100)
( 19,477)
1,646
-
876
( 45,786)
( 21,214)
27,378
6,164
( 22,937)

39

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

15 MOVEMENT ON FUNDS continued

Philip and Dorothy Green endowment and restricted funds

This endowment enables us to provide grants, awards, prizes, donations or financial sponsorship to young musicians. Income is transferred to project funds including the P & D Green Young Artists fund which enables young musicians at the start of their career to gain vital concert and recital experience across the UK. The scheme also allows Making Music member groups to tap into some of the very best young musical talent to programme into their concert. Income from the endowment also part-funds the Adopt a Music Creator project, run annually by Making Music since 2000 and the Awards programme for composers and arrangers.

Adopt a Music Creator

This project enables us to pair a leisure-time ensemble with an emerging composer. It provides a unique opportunity for leisure-time musicians to work directly with a composer, be actively involved in the creative process and discover new music. The project is funded by the PRS for Music Foundation and the Philip and Dorothy Green fund. Separate funding for the project in Scotland is received from Creative Scotland.

P A Thompson fund

The objective of the Pauline Thompson legacy fund was to encourage young people aged 15 to 35 to join amateur music groups. It enabled us to employ a part-time Youth Engagement Manager and extend repertoire to attract young people to sing/play in different types of mixed age music groups. The project completed during 2021 and the fund was fully spent.

Make Music Day fund

Make Music Day is an international celebration of grassroots musical activity which takes place in 125 countries across the globe on 21 June each year. In the UK, this was co-managed by us, with funding from Arts Council England, NAMM, Musicians Union and Music For All until the end of the 2021 project. The 2022 Make Music Day project was managed by a new company, Make Music Day UK Ltd.

Arts Council England Cultural Recovery Fund 2

The objective of this fund was to support cultural organisations as they transitioned back to a viable and sustainable operating model following the winter 2021 Covid lockdown. The funding covered a specific period: April to June 2021, and enabled us to return staff from furlough and invest in supporting members as they restarted activity.

Other restricted funds

These funds enable us to make a number of awards, bursaries, and prizes to individual musicians, groups, and organisations in both the voluntary and professional sector. Some of these, such as the Sir Charles Groves Prizes, recognise lifelong contributions to the musical life of the UK.

Designated funds

The designated funds are intended for use on a new website and artist subsidies.

40

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

16 ANALYSIS OF NET ASSETS BETWEEN FUNDS

Group
CURRENT YEAR
Fixed assets
Net current assets
PRIOR YEAR
Fixed assets
Net current assets
Charity
CURRENT YEAR
Fixed assets
Net current assets
PRIOR YEAR
Fixed assets
Net current assets		 2022
£
11,533
307,777
319,310
19,620
344,220
363,840
2022
£
11,537
307,773
319,310
19,624
344,216
363,840
Unrestricted
funds
Unrestricted
funds		 2022
Restricted
funds
£
-
108,952
108,952
-
131,967
131,967
2022
Restricted
funds
£
-
108,952
108,952
-
131,967
131,967		 2022
£
135,810
189,465
325,275
139,504
189,760
329,264
2022
£
135,810
189,465
325,275
139,504
189,760
329,264
Endowment
funds
Endowment
funds		 2021
Total funds
£
147,343
606,194
753,537
159,124
665,947
825,071
2021
Total funds
£
147,347
606,190
753,537
159,128
665,943
825,071

41

THE NATIONAL FEDERATION OF MUSIC SOCIETIES TRADING AS MAKING MUSIC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

17 FINANCIAL COMMITMENTS

At 31 December 2022 the charity was committed to future minimum lease payments under non-cancellable operating leases as follows:


leases as follows:
2022 2021
£ £
Due within one year 38,887 38,887
Due in two to five years 56,233 95,120

Towards the end of the year, the charity made a contractual commitment of £83,589 for the development of a new website and digital delivery portal in 2023 which is due for delivery in early 2024.

18 RELATED PARTY TRANSACTIONS

The key management personnel are considered to be the trustees, the Chief Executive, the Membership & Operations Director, the Finance Director, the Communications Director and from 1 August 2022, the Deputy CEO. This new part-time role focuses on our advocacy and lobbying work, funded by an unrestricted three-year grant from the Esmee Fairbairn Foundation (EFF).

The total amount of employee benefits (including employer's national insurance and pension contributions) received by key management personnel during the year was £183,242 (2021: £161,879).

There were no Trustees' remuneration or other benefits during the current or prior period.

Trustees were reimbursed expenses of £468 (2021: £133), in respect of three (2021: two) trustees for travel and subsistence costs. Ms Clare Birks is related to the owner of the property leased by the charity. The amount of the lease charge payable per annum is £36,996 (2021: £36,996). Ms Birks is excluded from any discussions on propertyrelated matters and the rent was negotiated on an arm's length basis.

42