Andrew Watson joined The Kids’ Cancer Project as Chief Financial Officer (CFO) in December 2017. He will serve as a member of the senior management team while managing finance, technology and human resources for the organisation. He is a seasoned executive and brings over 30 years’ experience to the role. Please join us in wholeheartedly welcoming Andrew.
Andrew Watson answers your questions about The Kids’ Cancer Project financial position. Here are two he received recently.
Q .What was the major cause of the $2.5 million reduction in operating revenue between 2016 and 2017?
A. The fundraising focus of The Kids’ Cancer Project is comprised of three key elements; raffles, merchandise and donations through individual giving, partnerships, major gifts and events. The costs associated with raffles (including funding prizes) and merchandise are high compared to donations.
In recognition of this, our strategy is to reduce the proportion of fundraising through raffles and merchandise. In FY2017 three raffles were undertaken versus seven raffles in the previous year, leading to the reduction of $2.2 million in gross revenue from raffles. However, it should be noted that the gross surplus from fundraising’s reduction was only $0.2 million and reflected an increase in gross margins from 49 per cent to 60 per cent.
Q. Why has The Kids’ Cancer Project had a deficit in the last two years?
A. Over the last two years, the charity has directly contributed $7.8 million in research funding which, with co-funding from other parties, has resulted in over $24 million going toward medical research. The Board decided to contribute this $7.8 million to medical research resulting in the two-year reported deficit of $1.7 million. In making this decision, the Board recognised there was sufficient retained surplus on the balance sheet to fund this research. In addition, in reviewing its risk management policies, the Board determined that the required level of retained surplus should equate to approximately 12 months of funded research. This provided the capacity for the greater investment in research over the last two years.