These financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments to market value and are 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 2016) (‘the SORP’), the Charities Act 2011 and applicable United Kingdom accounting standards.

Financial review

The Donkey Sanctuary’s financial performance for 2017 was encouraging, with consolidated total income reaching £37.6m (2016: £38.3m).

We increased total expenditure, including capital, to £42.0m (2016: £38.8m), an increase of 8%, and ended the year with general funds of £42.9m (2016: £43.4m).

Income

The Donkey Sanctuary continues to be reliant on the kind generosity of our supporters and the voluntary income they donate to help our work. While income from donations rose by 3% against the previous year, total voluntary income fell by 3% due to the exceptional legacy income received in 2016.

We experienced continued success from our fundraising strategies including strong growth in our adoptions scheme, investment in online fundraising activity and our ongoing initiatives to promote regular giving. We worked hard to not only introduce new supporters to the charity, but also to ensure we engage with our existing supporters through fundraising and communication activities that increase awareness of the impact of our work across the world.

Legacies continued to be an important source of income for us and, in 2017, we are grateful to all who have remembered us in their will.

In 2017 legacy income fell slightly to £23.3m (2016: £24.8m), a decrease of 6%, the reduction reflecting an exceptionally strong end to 2016 for legacy income. We are confident that our legacy income will continue to provide a robust source of income in 2018 and beyond with new high value giving strategies planned for the year ahead.

Income generated from other trading activities increased to £2.9m in 2017 (2016: £2.5m). During the year, we completed construction of The Kitchen, our new restaurant facilities in Sidmouth, and the Gift Shop and interpretation area for visitors. The new facilities provide an opportunity to attract more supporters to our sanctuary, the resulting increase in visitors helping to increase income from our trading and other on-site fundraising activities. All profits from our trading subsidiaries’ activities are donated back to the charity to help transform the lives of donkeys in need.

Expenditure

Total expenditure for the year, including investment in capital projects, grew to £42.0m (2016: £38.8m). In 2017 operational expenditure on our charitable activities increased by 8% to £28.8m (2016: £26.7m).

During the year, we increased investment in our Rehoming Scheme, our global programmes activities and advocacy work, our skin trade campaign activities, and our donkey-assisted therapy work.

We advanced with our rehoming strategy including the promotion of direct rehoming with Donkey Guardians who can offer caring homes for two or more of our donkeys. By extending our investment in 2017 we helped to increase the number of donkeys rehomed in private homes, schools and other institutions and worked towards our objective of increasing the number of rehomed donkeys to 3,000.

Our investment in Donkeys in the Community increased by 5% to £4.3m. 2017 was a period of transition for our Global Programmes team as we continued activity across our core projects in Mexico, Kenya, India and Ethiopia as well as extending our collaboration with other likeminded organisations across the world. During the year, one of our most significant projects was our donkey skins campaign. This involved our newly formed advocacy team consulting with governments, other non-governmental organisations and the international media to garner support. In order for us to make a sustainable impact, advocacy and awareness-raising will form a key activity in the future.

In 2017, we saw an increase of 13% in expenditure on donkey-assisted therapy, reflecting growth in activities across our centres and outreach programmes as we expanded our services to other groups such as sufferers of post-traumatic stress disorder. Our new strategy provides learning through experiencing and discovering things about the donkeys through hands-on interaction and provides more opportunity for a connection between donkey and human on an emotional and physical level.

Finally, in order to support our expanding operations and continue the success of the charity, we have invested in our new fundraising activities.

Particular attention has been paid to ensure the charity complies with new regulations both from the Fundraising Regulator and from the Information Commissioners Office in respect of General Data Protection Regulation (GDPR). The increase in fundraising activity combined with further enhancement to our internal controls to be GDPR-ready is reflected in the increase in expenditure on raising funds (including trading costs) to £8.6m in 2017 excluding capital (2016: £7.2m). The proportion of our expenditure attributed to raising donations, legacies and other fundraising income remains low, at 17.6p (2016:16.8p) for every £1 of total expenditure. The trustees continue to monitor the risks associated with the changing landscape of fundraising and data protection regulation and the potential for reduced levels of income in 2018 and beyond. Through our ongoing maintenance of robust financial controls and other internal measures, we are able to closely monitor the charity’s fundraising performance to mitigate this risk and take suitable action as required.

Reserves

The trustees operate a reserves policy to ensure the continued ability of The Donkey Sanctuary to meet its objectives. The trustees are aware of the potential volatility of income levels and the significant proportion of our total income from legacies. They completed a review of the reserves policy recognising that, while the existing policy had provided a robust platform in maintaining reserves sufficient to cover at least one year’s expenditure, a more agile and forward thinking model would be required to link in with our new five-year strategy and plans for growth.

The new policy recognises the specific reserves needed to fund our core activities reflecting the financial risks the charity faces, our ongoing committed expenditure and the composition of readily available funds to meet day-to-day activities. The policy will allow us to invest in a dynamic programme of strategic growth, driving forward our ambitious initiatives to transform the lives of donkeys at scale. The policy is kept under periodic review and reserves levels are adjusted as perceptions of risk and other factors change.

In terms of our total assets, £32.4m (2016: £29.9m) relates to fixed assets and planned capital projects, most of which is land and buildings to care for donkeys across sanctuaries. During the year, we completed construction of our new veterinary hospital and, at our main sanctuary in Sidmouth, we completed our new visitor facilities introducing an interpretation centre, a better gift shop and restaurant from which proceeds support our work across the world.

General funds of £42.9m (2016: £43.4m) comprise:

  • Specific reserves of £23.3m to take account of core operating activity including the many risks and uncertainties that the charity may face such as potential reduction of future income.
  • General reserves of £19.6m representing those funds available to accommodate medium to long term growth in the charity, and for the trustees to apply to specific transformative strategic projects.