12th September 2023

DCHS Charitable Fund Restructure

At the June extraordinary Charitable Funds Committee meeting, a decision was taken to restructure the DCHS Charitable Fund, with a view to enable better utilisation of the funds and to enable a wider range of services and staff to access funds. These funds can provide vital support for staff and patients complementing goods and services funded by statutory NHS funding.

Background

You may be aware that the Trust operates a Charitable Fund. The two primary objectives of the Charity are:

  • The improvement in the quality of care of patients by the provision of equipment, services or facilities not normally provided by, or in addition to, the normal NHS service.
  • The improvement in the quality of staff facilities, training and education not normally provided by, or in addition to, the normal NHS service, which ultimately benefits patients care.

In accordance with Charity Commission legislation, the Charity holds restricted and unrestricted funds.  Restricted funds are money/assets donated where the donor has put on an unequivocal restriction on the use of the donation.  These funds are often the result of legacies and are restricted in law (i.e. they cannot be spent on something else).  Unrestricted funds are donations that are not given with a restriction and can be spent in accordance with the charity objects.   Within this categorisation there are two categories:

  • Designated funds: Where the Trustees can set aside, or ‘earmark’ funds for a specific purpose or more typically, for an operational area such as a ward or service.  Within the Trust, this has historically happened, where a donor expresses a wish that the donation is for a specific team or service.  Designating funds is not legally binding and the Trustees of the charity can remove a designation without legal recourse. 
  • Undesignated funds: these can be spent at the discretion of the trustees on the Charity’s objectives – within DCHS these are our General Funds.

Current Situation

At present, most of the Charity’s money is held in unrestricted designated small funds with a smaller number of undesignated general funds.  The designated funds are attached historically to sites and/or services, for example specific wards. The undesignated general funds are attached to Trust sites.  A significant number of the designated funds have been inactive for long periods of time or have very little movement.  

There is a general view that designated funds are seen to ‘belong to’ a particular ward or service, this is technically incorrect.  The Trustees have a general legal duty to spend money that has been donated to them within a reasonable time of receiving it and therefore have a responsibility to keep all funds under review and decide how they should best be used.

There are some risks to allowing the current structure to remain:

  • Smaller funds are eroded by administration charges associated with running the charity which can lead to funds available to a particular area not being sufficient to make an impactful difference.
  • The footprint of the Trust has changed significantly over the past few years which has led to some funds becoming obsolete in their purpose
  • Administration of a large number of small funds is costly to the Charity and reduces the impact that donations can make
  • There are a large number of funds that have little or no movement
  • Having a large number of smaller funds prevents a significant number of staff groups/departments within the Trust from applying for Charitable Funds grants.

The Committee therefore committed to undertake a fund consolidation exercise, bringing together many of the smaller fund balances into a larger fund which then will be available for all staff and services across DCHS to bid against.  Engagement events for fund holders took place earlier this year informing them of the upcoming potential restructure.

The Committee reviewed various options, taking into account the views expressed in these sessions and have agreed on the following:

  • Two general funds will be created:
  1. Staff General Fund to support improvement in the quality of staff facilities, training and education not normally provided by the normal NHS service funding regime
  2. Patients General Fund to support improvement in the quality of care of patients by the provision of equipment, services or facilities not normally provided by the normal NHS service funding regime.

These funds will be available for staff/services to bid against using the current grant criteria.  The fund managers for each of these funds are:

  1. Staff General Fund - Jane Ginniver
  2. Patient General Fund -   To be confirmed w/c 18 September
  • Balances in all designated funds, at the go-live date, will be consolidated in equal shares across the Staff and Patients General Funds
  • 50% of the fund balances within each of the current general funds will be consolidated in equal shares across the Staff and Patients General Funds – this will allow any current expenditure plans within the current general funds to be progressed.  There is an expectation that these funds will be utilised over the next 12 months, after which a review of remaining balances will take place.
  • Following the restructure, the unrestricted funds which will remain are:

Staff General Fund
Patients General Fund
Babington General Fund
Buxton General Fund
Cavendish General Fund
Clay Cross General Fund
Heanor General Fund
Ilkeston General Fund
Ash Green General Fund
Ripley General Fund
St Oswald’s General Fund
Whitworth General Fund

  • The fund managers for the general funds above will remain in place until such time that those funds are fully utilised or a decision has been made to close them.

All future donations will be split equally across the Staff and Patients General Funds unless the donor specifically requests the donation to go to either patient or staff funds.

Benefits of the Restructure

The Committee appreciate that this decision will inevitably have an impact on those funds which are being closed or reduced and is aware from previous fund manager engagement that this, unsurprisingly, is not an option that has support from current fund managers, many of whom would like the status quo to remain.  However, the Committee feel this does not offer the best use of the Charity’s resources at this time and would ask staff to reflect on some of the benefits of streamlining:

  • All staff groups/departments will have the ability to bid for Charitable Funds grants in accordance with the objects of the Charity.  This is a more equitable means of utilising funds.
  • Funds will be utilised more efficiently ensuring the Charity can meet its legal requirements
  • Where smaller funds currently do not have enough cash to make a meaningful difference, access to a larger general fund may support this.
  • Administration of a smaller number of funds will be more cost effective for the Charity in the longer term.

Risks of the Restructure

The major risk associated with the restructure is that donations may reduce if donors are unsure where their money will be spent.  A clear communication strategy will be implemented to reassure donors that their money will be used to support both patients and staff within the Trust.

The restructure will take place with effect from 16 October 2023.

Committed expenditure at that time will be honoured before any transfer of funds occurs.

Further guidance around the criteria in relation to the use of Charitable Funds and accessing them will be provided before the go live date.  The aim is for this to be a straightforward and simple process which will allow users to apply to access Charitable Funds in a consistent manner.

In summary, a restructure of the DCHS Charitable Funds has been agreed and will take effect from 16th October 2023.  This will involve the consolidation of the current designated funds to create two new general funds for staff and patients.   These funds will be available for all staff/services to bid against, helping to provide a more equitable use for projects across the Trust.

If you have any questions please email: dchst.cfenquiries@nhs.net

We will publish a list of FAQs at a later date along with new application forms and guidance.