Saturday, 25 October 2014

RSPB: You didn’t forget the birds

In the past few days the RSPB has come under attack from a group going by the name You Forgot The Birds (YFTB), which appears to be a front for the country (that is, blood sports) magazine The Field. (For more about the people behind the campaign, see Spike’s post at Adventures In Conservation.)

This post isn’t going to study the group’s motives — it’s no secret that their idea of conservation involves the persecution of birds of prey to preserve shooting moors as an aristocrat’s playground — but the substance of their claim.

The claim

YFTB’s claim is that the RSPB spends only 24% of its income on conservation. This is based on two false assertions: firstly that the RSPB’s income is £122m, and secondly that it spends only £29m on conservation.

The reality

The diagram below contrasts the diagram from YFBT’s website with a truthful rendition of the figures.

The RSPB’s income

You’ll have to forgive me for a brief detour into accounting terminology here. Suppose I spend £13.1m on some goods in order to sell them on. I then sell them for £21.2m, which is £8.1m more than I paid for them. The £21.2m figure is called the revenue. Increasing your revenue is good, but not if your cost of sales — the £13.1m figure — increases more quickly. The more useful figure is the £8.1m — the revenue minus the costs of sales — which is the income. To complete the set, your profit (or operating income) is the income minus any other operating expenses. Note that the terminology differs between countries and accounting systems, but the fundamental concepts remain the same.

The can find the RSPB's income from their annual accounts, which have been audited by Crowe Clark Whitehill LLP. The operating statement is shown on page five, with the key figure in shown in the first grey line: the net income available for charitable purposes is £90.1m. The £122m figure quoted by YFTB is instead the revenue.

We can see why this is misleading by revisiting the example above — the figures I used were the actual figures for the RSPB’s commercial activities, consisting largely of the RSPB Shop, which are shown in operating statement as Commercial trading and Cost of goods for resale. Let’s imagine the RSPB’s commercial revenue doubled, and the costs of goods rose in proportion. This clearly benefits the RSPB’s charitable aims as the income raised from commercial trading would also double. However, because the YFTB analysis is based on the revenue (before subtracting costs of sales), YFTB would now report that the RSPB spending an even lower figure of 23% on conservation (assuming the extra £8.1m income was divided proportionately on the existing sources of expenditure).

RSPB spending on conservation

YFTB state that the RSPB spends £29m on conservation. Looking at the accounts, we can see that this is taken from the line Conservation on RSPB nature reserves, at £29.6m — note that YFTB has rounded down the figure. YFTB however ignore two other aspects of conservation: the Acquisition of nature reserves, at £2.7m, and Conservation – research, policy, and advocacy, at £34.7m. YFTB ignores the former and dismisses the latter as being spent ‘on people’ rather than ‘on birds’. This characterisation can only be described as deceptive: conservation work directly on reserves is no different from conservation research in the sense that it is carried out by people, but both are carried out for birds. Finally, we have Education, we helps the RSPB extend its reach by involving the wider public in the process of conservation, with another £14.2m.

Together these add up to 90% of the charity’s income, with the remainder consisting of 5% spent on Membership services (£4m) and Governance (£0.6m), and 5% left over as operating income. Total financial reserves total £48m, with £31.8m being held for specific future projects.

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