The Management Committee presents its report and the audited financial statements for the year ended 31 December 2023.
Structure, Governance and Management
Governing Document
The organisation is a charitable company limited by guarantee, incorporated on 19 November 1996 and registered as a charity on 26 February 1997. The company was established under a Memorandum of Association, which established the objects and powers of the charitable company and is governed under its Articles of Association as amended by special resolutions dated 31 July 2008 and 2 August 2018. In the event of the company being wound up, the members are required to contribute an amount not exceeding £10.
Recruitment and Appointment of the Management Committee
The directors of the company are also charity trustees for the purposes of charity law and are together known as the Management Committee. Under the requirements of the Memorandum and Articles of Association, the members of the Management Committee are elected to serve for a period of three years, after which they must be re-elected at the next Annual General Meeting.
Due to the nature of the charity objectives, much of the charity’s work focuses upon very sick young people. The Management Committee seeks to ensure that the needs of this group are appropriately reflected through the diversity and competencies of the trustee body. The Management Committee considers that an appropriate spread of characteristics and skills are currently represented within the trustee body.
In 2023 the charity had 5 trustees who stand for re-election every 3 years. All members of the Management Committee provide a list of their skills, which is reviewed annually. The trustees intend to recruit a further 1 or 2 trustees in 2024, following a review, identifying the gaps in relevant skills and representation.
Trustee Induction and Training
Before election, potential new trustees are required to familiarise themselves with the practical work of the charity. They are encouraged to meet key employees and attend a variety of the fundraising events. They will also be provided with the Charity’s latest strategy document.
New trustees are provided with a pack of information, which includes:
• A copy of the Charity Commission’s guide “the Essential Trustee”.
• A copy of the Memorandum and Articles of Association.
• A copy of the latest approved Report and Financial Statements.
In addition to the above, periodic training and information sessions are arranged by the Chair of the Management Committee, to update trustees on their obligations, the charity’s framework, risk assessments, understanding financial reporting and strategic planning. These sessions are generally provided by the professional advisors to the charity but may include others who the Chair deems appropriate. All trustees have up to date DBS Checks.
Risk Management
The Management Committee have considered the major risks facing the charity, which include the following:
• Governance risks
• Operational risks
• Financial risks
• External risks
• Compliance with laws and regulations
There is a formal risk-register which is reviewed at each Management Committee meeting. The Management Committee is satisfied that sufficient controls and procedures are in place to manage and minimise these risks and insuring against certain risks as appropriate. As part of the 2020 3-year Strategy, the charity undertook a comprehensive review of all governance, including the charity risks, to ensure that controls and procedures are enhanced. These are reviewed and updated annually. The Charity remains a low-risk organisation.
The charity is still recovering from the effects of the Coronavirus Pandemic on the charity’s work from early in 2020 until the end of 2022. The Management Committee took mitigating actions, during 2020 & 2021, and followed a pandemic recovery plan throughout 2022.
Not only did the pandemic have a major impact on fundraising and charitable activity, but the continued effects of Brexit, and then the conflict in Ukraine, inhibited post-pandemic economic recovery in the UK. This held back the planned regrowth of the charity. The challenging environment for fundraising remains a risk. The other new risk is the shortage of experienced fundraisers, due to the role being more exacting in the current economic climate, as well as the increasing popularity of individual personal fundraising initiatives, numerous national TV charity appeals, the expanding number of smaller charities and corporate in-house charities.
Organisational Structure
The current 5 trustee membership of the Management Committee are from a variety of professional backgrounds and experience, they include experience in legal, accountancy, medical, governance, company executive management, Wish parent & long-term supporter and charity management. The Management Committee met bi-monthly in 2023.
A Management accountant was engaged on a weekly basis to provide the committee with financial summaries and to work alongside the auditors. This work remained challenging, as this individual staff member was only employed one day per week. Financial management structures have been reviewed and new financial assistance and support is in place with updated procedures.
The committee are responsible for the strategic direction and policy of the charity. The strategic and high-level decisions are discussed, and their outcomes documented. The charity’s 2020 3-Year Strategy continued to underpin the charity’s work in 2022 and into 2023.
The Pandemic Recovery Business Plans in 2021 and 2022, informed the return to more normal working. The intention of these plans was to continue the charity’s sustainability, viability and to maintain its reserves, whilst preserving its reputation as a respected Wish-providing charity, which was achieved. 2023 was intended to see fundraising and charitable activity back to normal.
During 2020 and 2021 the trustees reviewed the organisational structure. This review resulted in several changes, including the appointment in September 2022 of the charity’s first Chief Executive who came to post. 2023 was the first full year under that new leadership, with supportive handover from the chair of trustees. The new chief executive post gives a more strategic and developmental focus to the leadership of the charity at this crucial time. In 2023 the outcomes of the objectives set out in the 2020 3-year strategy were reviewed and any gaps completed where possible. In 2024, work then started on developing the next charity strategy.
Related Parties
The charity has no related parties other than the Trustees, key management personnel, their close family members and any entities in which they have a significant interest.
Objectives and Activities
The Trustees confirm they have complied with the Charities Act 2011 to have regard to the general guidance issued by the Charity Commission on public benefit.
The company’s objects and principal activities are:
To relieve the need of terminally ill or sick children with life threatening illnesses and in particular to assist such children to have holidays and/or entertainment; and
To relieve the need of the families of such children.
The main objective during the year was to continue with the provision of Wishes to terminally ill children and children with life threatening illnesses, between the ages of 4 and 16, within the United Kingdom.
The number of Wishes and treats granted increased in 2023 this was down to the Lapland trips. The charity reopened applications for new overseas Wishes. The charity worked hard to maintain its profile and start to return income generation to pre-pandemic levels.
The reduced income from fundraising since the pandemic years has persisted and has impacted on performance. The difficulty in replacing fundraisers who have left us, for a variety of reasons, has also impacted on the anticipated increase in fundraising activity in 2023. This included, finding suitably experienced fundraisers and a suitable manager for the fundraising team.
From October 2023, the new role of marketing & communications lead has been very successful, and the social media presence of the charity has improved.
Charity Outlet
Our Charity Outlet has continued in 2023; receiving brand new donated goods from large retail companies, but levels of donated stock have reduced. Sales remained good with hard work by our warehouse and shop staff. Much effort has been put into finding additional suppliers.
Supporters
There was more planned fundraising activity in 2023, including marathons and an arctic trek. But not yet balls or large social events. Our dedicated supporters continued to attend and organise ‘In Aid Of’ events, although still fewer than pre-pandemic. We kept in touch with our supporters, especially via active use of social media and future events are being organised. In 2023 we started to improve supporter stewardship and social media contact.
Our own organised events
We did not organise any in-house major fundraising events in 2023.
Wishes
In 2023 we granted several Wishes to Florida, most staying at our Villa, and Disneyland Paris, at adjacent hotels. The Charity’s Wish Portal, continued to work well. With efficient processing of Wish applications. This portal opened once a month and closes when 10 Wishes had been accepted, controlling the demand. We also granted many UK based Wishes. Overseas Wishes were restricted to Europe and Florida. A maximum budget was set for each Wish, which is reviewed annually. To help with the best use of resources and best value for money, the decision has already been made to temporarily restrict Wishes to the UK from Mid 2024 once pre-planned Wishes have taken place.
A few “Red” Wishes, for very sick children approaching end of life, were completed in 2023 with specific trustee approval. These were very rewarding and some of the most magical experiences.
Group Wishes (Treats)
In 2023 we again offered several UK based group treats. Such as a group trip to Alton Towers. The annual trips to Lapland were recommences in December 2023, after a 3-year break, Restricted funds in Scotland funded the Prestwick flight and reserves funded the East Midland flight. These flights have always been the charity’s flagship event and they provided a magical day visiting Santa and capturing magical memories of husky and sleigh rides in the frozen forest. They achieved extensive media coverage and was good exposure for the charity. Unfortunately, income generation in 2023 and into early 2024 means that plans for Lapland 2024 are on hold.
Holiday Properties
Due to the lack of charitable use, or income, from our lodge at Hengar Manor in Cornwall, the decision was made in late 2023 to sell; using the released capital to support our cash reserves.
Likewise, Alicante Villa has not been used for Wishes for several years, and maintenance costs have increased. Income from letting has been disappointing. The option of selling was explored in 2023 and is in progress by mid 2024.
Early 2023 saw the completion of the sale of one of the charity’s two Florida Villa. The other Villa was kept, to continue providing Florida Wishes. Unfortunately, problems with the contractor who repaired lightning strike damage to the remaining villas new roof, meant remedial repair work was required. Most of that cost was recouped. But, in recent years, maintenance and necessary refurbishments are increasingly costly and troublesome. With flight and car hire also going up, this makes the costs of US Wish trips increasingly expensive.
The villa sale did release significant funds in 2023, with some retained money, held to pay IRS, expected to be returned in 2024. The viability and financial cost of retaining the remaining villa will be reviewed in 2024, when alternative ways of offering more cost-effective Disney trips to Florida and Euro Disney will be considered.
At the end 2023 the Charity had a larger deficit than 2022. The cash released by the villa sale was required to maintain the Free Reserves. This deficit was outside the limits allowed for during early 2023, although unplanned-for legacies did help. It was considered essential that, as we regrew our fundraising as we came out of Covid, that the charity had to deliver its charitable activity and grant Wishes in order to attract the support and generate income.
Overall charitable activity expenditure in 2023 was up significantly on that of 2022, closer to pre-pandemic levels. This was due to accepting new Wishes, including Florida and Europe, and recommencing Lapland trips. Direct Wish expenditure was 80 % higher than 2022.
Over the 3 years covering the pandemic cash reserves were maintained. In 2022 we re-established significant charitable activity, which expanded more in 2023. In 2022 & 2023 there was significant spending on the Florida Villas and funding structural reorganisation. Our first Chief Executive, commenced post in September 2022, so 2023 was her first full year, when we saw normal charitable activity return whilst we anticipated income generation to also become closer to 2018/19 levels. As mentioned earlier the latter did not happen due to difficulty recruiting fundraising staff and the challenges of fundraising currently.
Principal Funding Sources
The charity’s funding is mostly reliant on various fundraising events and donations received from businesses and individuals. Grants and legacies are variable but can be significant boost to funds. The majority of grants are for front line service or research charities, which we are not. Our intended growth in grant applications has not been possible.
The retail outlet income has been a help, but was down in 2023, due to a reduction in donations from our main large retailer warehouses. Many retailers now have tighter stock control and other direct front-line charities who give goods direct to the users in need, for whom they provide support.
In 2023 the number and value of legacies received was good, but less than 2022, which had been exceptionally high. We are so grateful to those generous supporters who felt us worthy of being beneficiaries in their wills. We thank them and remember them. These extra funds do make a difference. Working with specialist organisations we have increased the promise of future legacies.
Wish Making Policy
Our Wish Making Policy remains the same. The Management Committee usually aims for us to consider all requests received for wishes, provided they fall within the objects of the charity, but it is not always possible to grant the first Wish requested. In 2023 A restriction on destination for Wish holiday requests to Europe & Florida was in place. A budget cap was set for each individual Wish, with Trustee discretion to approve Wishes over that cost, based on exceptionality. In 2024 there will be further restrictions as we consider reducing foreign holiday Wishes destinations.
Investment Policy
Due to the nature of the charity’s objects, the Management Committee consider it vital that funds are available at short notice to grant wishes for the children. Consequently, the charity retains approximately 8% of funds in instant access accounts. The remainder is held in short notice deposit accounts, and these funds can be accessed instantly, subject to loss of interest. The return on investment for the cash deposit has remained consistent in 2022.
Over the past 20 years, the charity has invested in properties, which are used in the provision of Wishes granted to sick children. They have been let-out when they are not in use for Wishes, to bring in additional funds. The Management Committee in the past, considered each property acquisition for its potential as a sound financial investment, as well as for its ability to furnish Wishes. In 2023 we implemented the policy which reduced our property portfolio. The policy to have investment properties was reversed in 2022 and the decision made to sell some of our properties. One Florida villa was sold in early 2023 whilst continuing to use the other for granting Florida Holiday Wishes. We do not take private bookings. It was also agreed in 2023 to sell Hengar Manor and Alicante Villa. In 2024 the continued possession of out remaining Florida Villa will be discussed. Monies released will be held in higher interest accounts and, if required, used to maintain charitable activity whilst income generation improves.
This policy was revised in 2022 and should now read that Free Reserves are required:
a) to provide funds which can be designated to specific projects to enable these projects to be undertaken at short notice.
b) to cover administration fund raising and support costs without which the charity could not function.
c) to provide funds for the maintenance of properties at home and abroad to facilitate the provision of various wishes.
d) To cover expenditure, especially on charitable activities, in circumstances that result in sudden loss of income.
Free Reserves Policy clause c) will be reviewed in 2024 if we do sell the remaining property.
To avoid the necessity of realising fixed assets held for the charity’s use, the Management Committee considered it prudent that free reserves should be sufficient:
a) to cover one year’s administration and fund raising and support costs.
b) to provide a pool equal to 25% of the average charitable expenditure over the preceding years from which funds can be designated to promised Wishes and specific projects.
This Reserves Policy will be fully reviewed on an annual basis.
These considerations for the reserves have been on hold due to the pandemic and the new main consideration has been to maintain cash in hand of £600,000.
This revised free reserves policy was agreed at the 2023 AGM.
Regarding net income, 2023 saw a net deficit of £209,946, compared with a much smaller deficit of £12,158 in 2022. This was a planned deficit to allow increased charitable activity, including the use of restricted funds to recommence our annual Lapland Trip. This expenditure was covered by the release of capital by the sale of one Florida Villa.
The value of Net Current Assets at the end of December 2023 fell to £850,724 from £914,390 in December 2022. A drop of £64K. In addition the Restricted Funds dropped to £16K in December 2023 from £281.6K in 2022.
The level of free reserve and cash flow are monitored regularly by the Management Committee.
The Charity’s total funds increased from £1.47m in 2020, to £1.58m in 2021, then slipped to £1.56m in 2022 follow the pandemic. In 2023, with increased charitable activity the total funds reduced further to £1.36m.
It is certain that 2024 will remain difficult for fundraising due to the on-going economic climate and the changes in charitable giving. A new fundraising strategy, headed up by a new Fundraising Manager is in place and a compete refresh of how the charity utilises social media implemented by the appointment in 2023 of a marketing & communication lead. Stewardship of supporters is improving. The Management Committee remains committed in supporting the Fundraisers Team in its efforts to raise funds via corporate and community supporters, grants and the promotion of the charity.
Since the new Chief Executive’s appointment, there has been a concentrated effort to complete the remaining actions detailed in the 2020 3-Year Strategy and work has started on producing a new 3-Year Strategy for 2024 - 2026. The Northern based fundraisers are working remotely from home, with regular visits to head office or remote meetings with other staff. The Scotland Office is working well.
A complete review of Telephones, IT and the provision of IT support has been undertaken. A new company will be engaged for IT support. IT hardware has been rationalised and updated where essential, with further upgrades as funds allow. A new telephone system was installed in spring 2024. For management accounts an external provider was engaged and progress on financial data entry and reporting has been made.
Following reduced income in 2023 a Cost Improvement Plan (CIP) agreed in quarter 1 of 2024. This plan looks at all areas of expenditure as well as expanding income streams. As part of the CIP, it sets more stringent budgets on the cost of individual; Wishes, postpones the decision on a Lapland 2024 trip, and reviews other cost. For example, all finance functions may be brought back in-house later in 2024 when new management accounts systems are fully in place.
Work on development of our staff and team building across the whole Charity will continue year on year.
The Management Committee started the search for 1 or 2 new trustees in late 2023 and it is hoped that a new prospective trustee will take up formal post at the 2024 AGM.
The Management Committee will continue to monitor expenditure and ensure that charitable activity spend returns to reflecting the concurrent income. The expenditure and value for money of Wishes granted will be more tightly controlled, with every effort made to not lose the magic of the Wish experiences. They will continue to scrutinise staff costs and office expenditure. Following difficulty recruiting in 2023, priority was being given to filling fundraising vacancies in 2024 and successfully recruited experienced dynamic fundraisers to the vacant posts.
All events will require approved budget plans with close monitoring of expenditure and accurate recording of the resulting income.
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The property expenditure costs will reduce following the sale of all but one property. Office costs have already reduced now we no longer have a NW office. As part of the CIP the final villa in Florida will be sold later in 2024 and we will no longer provide Florida holiday wishes, focusing on UK based wishes. This will reduce costs further.
The additional cash released by the sale of property will, if required be used to fund Wishes already booked and committed to prior to the new lower Wish budget.
The charity is a company limited by guarantee.
Responsibilities of the Management Committee
The trustees (who are also directors of When You Wish Upon a Star for the purposes of company law) 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).
Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure of the charitable company for that period. In preparing these financial statements, the trustees are required to:
select suitable accounting policies and then apply them consistently.
observe the methods and principles in the Charities SORP 2015 (FRS 102).
make judgments and estimates that are reasonable and prudent.
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
In so far as the trustees are aware: there is no relevant audit information of which the charitable company’s auditors are unaware; and the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Management Committee report was approved by the Board of Management Commitee.
Opinion
We have audited the financial statements of When You Wish Upon a Star (the "charitable company‘charity’) for the year ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, 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).
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 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.
In auditing the financial statements, we have concluded that the Management Committee 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 charity’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 Management Commitee with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Management Commitee are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and 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.
We have nothing to report in respect of the following matters in relation to 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:
the information given in the financial statements is inconsistent in any material respect with the Management Committee report; or
sufficient and proper accounting records have not been kept; or
the financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the statement of Management Committee responsibilities, the Management Commitee, who are also the directors of the charity for the purpose 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 Management Commitee 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 Management Commitee are responsible for assessing the 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 Management Commitee either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
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.
Based on our understanding of the charitable company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the charitable company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to misappropriation of funds in addition to the classification of costs between cost of raising funds and charitable activities.
Audit procedures performed included:
agreeing a sample of donations and sales to the bank and/or source documentation
recalculating the apportionment of expenditure between charitable activities and the cost of raising funds;
enquiries of management and testing of journals, evaluating whether there was evidence of bias by the trustees that represented a risk of material misstatement due to fraud; and
evaluating the appropriateness of valuations and classification of properties.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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: 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 charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.
UHY Hacker Young is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
Investment income and interest
All income and expenditure derive from continuing activities.The statement of financial activities includes all gains and losses recognised in the year.
When You Wish Upon a Star is a charitable company limited by guarantee registered in England & Wales. In the event of the entity being wound up the members are required to contribute an amount not exceeding £10. The address of the registered office is given in the legal and administrative information in these financial statements. The nature of the charity’s operations and principal activity is to provide wishes for terminally ill children or children with life threatening illnesses.
The financial statements have been prepared in accordance with the Charities Act 2011, the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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). The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The charity is still recovering from the effects of the Coronavirus Pandemic on the charity’s work from early in 2020 until the end of 2022. The Management Committee took mitigating actions, during 2020 & 2021, and followed a pandemic recovery plan throughout 2022, under which the charity reduced staff costs, charitable activity and other expenditure. Not only did the pandemic have a major impact on fundraising and charitable activity, but the continued effects of Brexit, and then the conflict in Ukraine, inhibited post-pandemic economic recovery in the UK. This held back the planned regrowth of the charity. The reduced income from fundraising since the pandemic years has persisted and has impacted on performance.
The resulting deficit was in line with the Budget Forecast agreed by the trustees in Autumn 2022 which planned for a return to substantial Wishes, including those using our Florida Villa and Euro Disney, plus re-establishing our day trips to Lapland. This charitable activity was deemed essential to refresh our visibility post covid and provide a new contemporaneous narrative to support our fundraising efforts, whilst maintaining sufficient reserves as seen in these accounts.
In spring 2024, on reviewing our finances, we have implemented a cost-improvement-plan as a start to moving to a sustainable plan for the control of expenditure and improving income. This will include tight management of Wish costs and income based on fundraising rather than legacies, which cannot be relied upon. That said, When You Wish Upon a Star has been fortunate in this year so far of 2024, in already receiving over £400k in unexpected legacies.
The financial statements have been prepared on a going concern basis, despite the £209,946 (2022: -£12,158) deficit in the year. The trustees have considered the level of funds held and the expected level of income and expenditure for at least 12 months from authorising these financial statements and believe that the charity remains in a sustainable position to be able to continue as a going concern.
Unrestricted funds are available for use at the discretion of the Management Commitee in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors as to how they may be used. The cost of raising and administrating such funds are charged against the specific fund. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
All incoming resources are included in the statement of financial activities, when the charity is entitled to the income and the amount can be quantified with reasonable accuracy. The following specific policies are applied to particular categories of income.
Voluntary income is received by way of donations and gifts and is included in full in the Statement of Financial Activities when receivable.
The trustees recognise the significant contribution made by volunteers, including service organisations, who give freely of their time. It is not practical to place a value on this contribution.
Other income, including rental income and interest receivable is included in the Statement of Financial Activities account on receipt.
Legacies are recognised in the Statement of Financial Activities at the point at which the charity is entitled to the funds and the current value to the charity can be reliably measured.
Donations in kind are included in the Statement of Financial Activities as income and associated expenditure where there is demonstrable financial cost borne by the donor and the current value to the charity can be reliably measured.
Gift aid claimed is recognised in the Statement of Financial Activities upon receipt and not at the time of the donation attracting the gift aid.
Expenditure is recognised on an accruals basis, as a liability is incurred. Expenditure is therefore recognised when there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably. Expenditure includes any VAT which cannot be fully recovered and is reported as part of the expenditure to which it relates.
Costs of generating funds comprise the costs associated with attracting voluntary income.
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such services and those costs of an indirect nature necessary to support them.
Support costs include office costs, governance costs and administrative payroll costs. Where support costs cannot be directly attributed to particular headings they have been allocated to cost of raising funds and expenditure on charitable activities on a basis consistent with use of resources. Premises overheads have been allocated on an apportionment basis and other overheads on a usage basis or percentage of staff time.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings are valued at market value as detailed in note 13 to the financial statements.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the statement of financial activities.
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Stocks are clothing and goods used in furtherance of the charity’s objectives as part of fundraising events rather than for the purposes of resale. Stock held by the charity is therefore recorded at cost, after due regard for obsolete and slow-moving items. Items donated for resale are not included in the financial statements until they are sold at which point income is recognised.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand and deposits held at call with banks.
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.
Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors are initially recognised at transaction price.Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less.
The charity is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 and is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore meets the definition of a charitable company for UK corporation tax purposes.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the charity’s accounting policies, the Management Commitee 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.
At the year end the Charity holds three properties in total; two properties held for wish children and classified as land and buildings and one held as an investment property. One of the properties held in land and buildings is carried in the accounts based upon desktop valuations obtained from professional estate agents in May 2024. The trustees believe the property held this value at the 31 December 2023 and have recognised the uplift in the current year. In March 2023 the Charity sold a similar property for $409,500, which was greater than the $310,000 carrying value included within these accounts. Valuations by their very nature do not involve a physical inspection of the properties and so are based upon certain assumptions in arriving at an estimated value. See note 8 for further details.
The second property held within land and buildings at a carrying value of £76,170 was sold in March 2024 for £95,772.
The investment property held at £122,700 The fair value of the investment property of £122,700 has been arrived at on the basis of a valuation carried out in 2019 by Barclays Properties, who are not connected with the charity. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
An agreement for sale has been made on the property for €155,000, this is greater than the carrying value within the accounts.
The trustees are of the opinion that the carrying value of all properties are a fair reflection of the current market values.
Grants and trusts
Income from other trading activities of £250,753 (2022: £283,708) was wholly attributable to unrestricted funds.
Investment income and interest
Investment income and bank interest of £21,129 (2022: £10,159) was wholly attributable to unrestricted funds.
The net gain on disposal of fixed assets of £90,533 (2022: £Nil) was wholly attributable to unrestricted funds.
Charitable Activities
Charitable Activities
Wishes
Computer & Software
Rates
Motor & Travel
Telephone
Printing, Post & Stationery
Property Maintenance
Insurance
Equipment Rental
Rent
Bank Charges
Governance costs includes payments to the auditors of £11,450 (2022- £10,500) for audit fees.
Costs have been apportioned on a consistent basis using employees roles.
The average monthly number of employees during the year was:
No members of the Management Committee received any remuneration during the year. The Management Committee had £28,046 of expenses reimbursed during the year (2022: £nil).
No other trustee or other person related to the charity had any personal interest in any contract or transaction entered into by the charity during the year.
The total amount of employee benefits received by key management personnel is £139,594 (2022: £204,769). The trustees consider the key management personnel to comprise the Chief Executive Officer, General Manager, Deputy Manager and Fundraising Manager.
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
At the year end, the Charity held three properties in total. Two held for the wish children – one in Florida, approximately a 15 minute drive from Disney World and one in Cornwall on a manor estate and an investment property in a popular resort in Alicante held primarily to generate short term rental income for the charity and the longer term potential for capital growth.
The two properties held for wish children are classified as land and buildings and are included in the accounts at cost or valuation less depreciation. The Cornwall property was revalued during October 2021 to £80,000 based on the trustee’s desktop valuation. The property was sold February 2024 for £96,422, which is greater than the £77,872 carrying value included within the accounts.
The Florida property was revalued at the year end to £284,716 by Stellar MLS, independent valuers not connected with the charity on the basis of market value. The valuation was based on recent market transactions on arm's length terms for similar properties.
The Trustees are of the opinion that the carrying values of all properties are a fair reflection of the current market values.
At 31 December 2023 had the revalued assets been carried at historic cost less accumulated depreciation and accumulated impairment losses, their carrying amount would have been approximately £77,477 (2022 - £84,296).
Investment property comprises the Alicante property.
During 2017, the Alicante property was transferred from land and buildings to investment properties as the primary usage of the property was to generate rental income for the charity, although it retains a secondary usage and is still available for use by wish children.
The fair value of the investment property of £122,700 has been arrived at on the basis of a valuation carried out in 2019 by Barclays Properties, who are not connected with the charity. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
An agreement for sale has been made on the property for €155,000, this is greater than the carrying value within the accounts.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The Center Parcs donations are made in support of the annual Center Parcs wish event which treats wish families to a three day experience in the Winter Wonderland at Sherwood Forest. Donations were made by Eddie Stobart and Kentown Wizard.
Key 103 – Cash for Kids donations are made in support of granting wishes to children in the Greater Manchester area.
The Disney Wishes fund was donated by Y Hughes specifically for granting wishes to Disney.
The funds received from Alton Towers specifically relate to a trip to Alton towers including a hotel stay and platinum FastTrack tickets for a group of children.
Arnold Clark granted donations for the purposes of a baking event.
The Lapland fund is comprised of donations received for the purpose of funding the annual trip to Lapland.
The head offfice utilities are donations received for the purpose of funding the head office running costs.
The general wishes funds are donations received for the purpose of granting wishes.
The Day in York funds provided by LNER for a trip to York, with £15k of travel costs support with the LNER network, and the remaining £10.4k relating helping pay for the salary of the wish co-coordinator.
Edinburgh wishes relates to a grant received from The Wood Foundation and Orcome Trust, ring-fenced for wishes in the Edinburgh area.
Hengar Manor relates to funds ring-fenced for refurbishing the property ahead of being put on the market.
North West donations were made by Sapphire Utility to fund wishes in the North West area.
The Wish ball fund is comprised of donations received for the purpose of funding the annual Wish ball.
There have been significant transfers made during the year, totalling £166,077 (2022; £20,000).
This is due to a full review of the restricted funds having taken place in the year. Transfers have been made where events have taken place in prior years, using restricted funds, but a lack of monitoring and controls meant the restricted bank balance was not updated accordingly. Controls have since been updated and improved.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
During the year the charity entered into the following transactions with related parties:
Members of the Management Committee were reimbursed £28,046 of expenses in the year (2022; £nil).