Financial review

Each year the annual report and accounts presents the position of the group, set out in the consolidated statement of financial position (the balance sheet), and the results for the year, set out in the consolidated statement of financial activities. The consolidated statement of cash flows links the balance sheet with the financial activities to make up the primary statements. The primary statements are supported by the notes which give additional, more detailed information on certain key numbers. This section provides a narrative of the financial activities for the year, in support of those statements.

Income and Expenditure:

Red Nose Day 2019 raised over £70m thanks to generous donations from the public and their fundraising activities, institutions and corporate partners. We also work with institutional partners, such as the Department for International Development and the Bill and Melinda Gates Foundation on joint projects that serve both organisations’ objectives.

In addition to our main fundraising campaign we also received income from a number of different sources, such as the Comic Relief Spectacular, held at Wembley SSE Arena in February 2019. We also have received some income from earlier and future campaigns which we have accounted for in his financial year.

Additionally, we generate income from investing the funds we have raised prior to them being distributed as funding to other organisations. This helps fund our operating costs and allows us to give more money to good causes. In 2019 the capital gains from investments were £13.2m (2018: £15.6m).

Our largest operating expense is staff costs, and we work carefully to ensure we continue to pay at least the London Living Wage to all our staff. In 2019 total staff costs including agency staff was reduced by £1.6m, being £13.7m (2018: £15.3m) excluding costs of redundancy in each period.

Restricted Fund (£0.1m; 2018 £-1.5m)

Restricted funds can only be used for purposes as specified by the donor. In 2018 the fund was in deficit because the costs are recognised in full when the award is made, whereas the related income is recognised only when Comic Relief is entitled to receive the funds from funding partners, which will typically be in stage payments over several years. For 2018/19 the balance is £54,000 surplus. Further details are given in note 20.

Unrestricted designated funds (£75.1m; 2018: £81.4m)

  • Social Change Fund (previously Grant Fund) £65.6m (2018 £73.3m) This fund represents amounts designated by Trustees for grant making which have not yet been allocated to partners. We aim to allocate funds over a two-year period following each fundraising campaign.

  • Common Ground Initiative (£0.3m; 2018: £-1.5m) In 2018, the negative balance reflected that income is only recognised on entitlement to income from DFID, but the corresponding awards are recognised in full at the time they are made. During 2019 CGI payments of £2m were received.

  • Red Shed (£7.8m; 2018: £8.2m) This fund represents a designation of capital gains on investments from previous years which is being used to fund new and innovative ways to support our mission and vision.

  • Bill & Melinda Gates Foundation (£0.8m; 2018 £0.8m) In discussion with the Foundation, Trustees have designated this general operating grant towards supporting the expansion of Comic Relief’s international activities, developing creative ways of demonstrating success stories from Africa, engaging millennials and supporting global advocacy.

  • Fixed assets (£0.5m; 2018 £0.6m) This fund represents the net book value of fixed assets, recognising that such assets cannot be readily liquidated on demand.

General Fund (£57.1m; 2018 £51.9m)

The remaining balance of unrestricted funds, the General Fund, is monitored regularly by Trustees in accordance with their agreed reserves policy (shown below). Income in the General Fund is generated from Gift Aid, investment returns, licensing activities and sponsorship/specific contributions to cover costs. The General Fund is used to cover all costs of the organisation that are not related to funding allocation or management.


The General Fund is a reserve against which the surplus or deficit of operating income less operating expenses is charged. Trustees have considered the potential scenario that a single year’s fundraising campaign may have to be cancelled or that the charity experiences a significant loss on its investments, recognising that under the Comic Relief Commitment the charity relies on investment returns to help cover the running costs of the organisation. Comic Relief is in the unusual and fortunate position whereby, if there was a deficit on the General Fund in any particular year, there is a very limited risk of it affecting the charity’s ability to continue its operations. The positive cash flow generated by the annual fundraising event would assist in financing a temporary deficit should the need arise. Therefore, the Trustees believe they would be able to plan the recovery of the organisation’s finances over a reasonable timeframe without threatening the commitments to the charity’s beneficiaries if such a situation were to occur. The target balance on the General Fund is therefore to retain a reserve of an amount equal to the sum of:

  • Six months’ operating costs (to be held in cash); and

  • 15% of the value of the investment portfolio in order to afford a degree of protection to the General Fund (and organisational operating budget) against market fluctuations.

At 31 July 2019 the target General Fund balance is £33m against the actual balance of £57.1m (2018: £51.9m) which the Trustees are satisfied is consistent with the long term policy, after taking account of the budgets and planning assumptions for the future.

Fixed Asset Investments


We are a cash-generative organisation. The business model is that the great majority of income from events is received between March and July in the same year as the event. We aim to award funds to projects over the subsequent two years. The great majority of funding awards are multi-year, often for three years but sometimes for five years or more. Funding commitments are scheduled for payment across the period of the funding in instalments to ensure the money is being spent as agreed and delivering the intended impact. Until cash is required for funding it is invested to provide a return, outlined in the investment approach below.

Sufficient cash or cash equivalents are held to cover six months’ worth of funding commitments and operating costs based on a 12 month average forecast, with a monthly minimum balance equal to three months’ needs or £25m, whichever is higher, reflecting the fact that most of the cash inflows occur in March – July each year. £15m will always be available within one month and none of the cash holdings will be placed with maturity of more than one year. Beyond the sums to be held in cash there is, therefore, core capital which can prudently be held in longer term assets to achieve an enhanced level of return.

Investment approach

The overall objective of the Investment Policy is to maintain and grow the value of the portfolio while remaining true to our values, mission, and vision. In addition, we aim to maximise the return from the portfolio but only within an acceptable level of risk. Despite our reliance on returns from the investment portfolio to pay for our overheads, we are mindful that the portfolio represents donations received from the public and consequently we have a responsibility to invest in relatively safe areas that minimise the risk of incurring capital losses. We also recognise the importance of investing responsibly and sustainably. To make sure that our investments do not conflict with our Social Change strategy, our investment policy prohibits investing in companies which manufacture armaments or tobacco products or whose primary business is adult entertainment or the manufacture of alcohol products. The list of sectors to be excluded from the portfolio is reviewed by Trustees twice a year. In September 2019 the Trustees added a statement to the Investment Policy in respect of fossil fuels, which states:

Trustees of Comic Relief will not sanction an investment in companies whose primary business is the extraction or manufacture of fossil fuels without reason that is aligned with the organisation’s charitable purpose.

In 2014, we signed up to the UN Principles for Responsible Investment (UNPRI), an international network of over 1,800 investors working towards putting environmental, social, and governance issues at the centre of their investing approach. In the 2019 self-assessment, we achieved a score of A or A+ in all three completed modules which exceeds the peer median scores of A in the module on strategy and governance, B for listed equities and B for property. We are also members of the Charities Responsible Investing Network, supported by ShareAction. Through this network of UK-based charities and foundations, we aim to secure public benefit through the judicious use of shareholder engagement with investee companies, as well as developing and sharing best practice in responsible investment across the foundation and charity sectors, building skills for responsible investment among foundation and charity investors, and achieving positive change cost-effectively by working collaboratively. For the year under review, Trustees delegated oversight and management to the Investment Committee for the investment portfolio and the Cash Management Advisory Group (which reports to the Finance & Risk Committee) for the cash portfolio. As part of the governance restructure approved during 2018/19 the Investment Committee (now called the Investment Advisory Group) now reports to the Finance and Risk Committee from September 2019. From January 2020 the Cash Management Advisory Group will be subsumed into the Finance and Risk Committee agenda. The Committee and the Group are made up of professionals who donate their time for free. Note that from January 2020 the Finance and Risk Committee will become two separate committees, Finance and Fundraising Committee and Audit and Risk Committee (see governance section for more detail).

Investment performance

The opening value of the investment portfolio was £130.4m. During the year, the net investment gain was £13.2m. Investments in Stewart, F&C and Fundsmith were sold and partially reinvested in purchases of MFG Magellan (£10m) and Trojan Ethical Fund (£15m) with £6m released to operating cash. The portfolio closing value was £137.1m. The total return on the portfolio (including dividends, interest and capital gains, but net of costs) was £15.8m (2018: £17.6m) for the year to 31 July 2019. The portfolio consistently holds a proportion of cash that is designated for investing use.

The Trustees have adopted a nominal total return target of 4.5% after costs, annualised over a rolling five year period. Based on figures independently calculated by our advisors, total returns over the last five years have been as follows:


Actual Total Return (%)

Target Total Return (%)

Over Performance (%)

1 year to 31 July 2019




5 years to 31 July 2019




Going concern

The Trustees have reviewed the level of reserves and available liquid resources in the context of operating and spending plans over the next 12 months, the five-year business plan and the organisational risk assessment. The Trustees believe that Comic Relief has sufficient financial resources to continue in operational existence for the foreseeable future and that the group is well placed to manage its operating risks successfully. They have therefore continued to adopt the going concern basis of accounting in preparing the annual financial statements.

Remuneration at Comic Relief 

We are proud to be a Living Wage employer and all our London based staff are paid at least £10.55 per hour in line with guidance from the Living Wage Foundation. Responsibility for overseeing our pay policy, setting CEO and Executive Director pay, and agreeing on the level of annual staff pay increases, lies with the Remuneration and Nominations committee - This is a sub-group of the Board of Trustees, attended by the Chair. The committee takes external benchmarking advice to inform its decisions. Meetings are held at least three times a year with Senior Comic Relief staff and supported by external HR experts who attend in an advisory capacity. We are committed to the principle of equal opportunities and equal treatment for all employees. We have a clear policy for paying employees equally for the same or equivalent work.

Gender Pay Gap

We have a proud history of tackling gender inequality in the UK and across the world. We passionately believe in our vision to create a just world free from poverty for everyone and that starts here, by ensuring that all staff are treated equally.

At the snapshot date of 5 April 2019, our mean gender pay gap is 3.7% (2018: 12.46%) and its median gender pay gap is 5.00% (2018: 13.98%). We’re proud of the achievement to narrow this gap but recognise there is more to do.

We have high female representation throughout the organisation particularly at the executive and junior levels. We have increased the percentage of male employees in the lower quartile through recruitment and continue to work to reduce the pay gap overall.

We will put into practice the relevant actions recommended by the Government Equalities Office. We do not pay bonuses. Pay quartiles by gender:

Numbers in Quartile %






Upper middle



Lower middle






Our ratio of top pay to median pay is 4.2:1

Our ratio of top pay to lowest pay is 8.8:1

We try to balance the expectations of our supporters and beneficiaries, who trust us to use their money effectively, with the requirement to recruit and retain the best people. We know that our staff are attracted to working for us because of the opportunity it gives them to have a positive impact on the lives of others. A key driver for attracting and retaining talent is our commitment to family-friendly policies and flexible working practices that help staff achieve a good work/life balance. Our investment in training, development and well-being is an added incentive. For all staff, including the CEO and Executive Directors, pay is reviewed on an annual basis and our salaries reflect the knowledge, skills, responsibilities, and attributes required for the performance of each position. Our salaries are benchmarked against similar roles in other charities and relevant organisations. A set percentage increase, directed by the Retail Price Index, Consumer Price Index, the actions of other organisations in the sector, and agreed on by the Remuneration & Nominations Committee, is given annually to all permanent staff with six months’ service, though exceptional performers may receive a higher increase.

We also benefit from the incredible efforts of a huge family of volunteers who help us to achieve our fundraising goals. Their support allows us to minimise core running costs and enables our highly professional core staff to focus on delivering ground-breaking campaigns, coordinating fundraising efforts, and helping ensure that the money raised is distributed fairly, efficiently and usefully both in the UK and around the world. We also accept pro bono work and gifts-in-kind from commercial partners wherever appropriate, in order to operate as efficiently and cost-effectively as possible.


We want to attract a wide range of diverse skills into the workplace. We use a recruitment tool which enables blind recruitment. Our staff diversity in percentage as at 31/7/2019 is as follows:

Gender % Ethnicity % Sexual orientation % Disability %
Female 69.0 White 59.0 Heterosexual 70.2 No 89.1
Male 29.5 BAME 26.0 Gay/Lesbian/Bi-sexual/other 7.8 Yes 4.1
Not declared 1.5 Prefer not to say/not declated 15.0 Prefer not to say/not declared 21.9 Prefer not to say/not declared 6.8

Employment Policies 

All our staff and job applicants are offered equality of opportunity and fair treatment. Comic Relief provides line managers with development sessions about discrimination and equality, and makes every effort not to discriminate, either directly or indirectly, on the grounds of nationality, ethnic or national origins, religion, gender, marital status, sexual orientation, disability, age, spent convictions, and membership or non-membership of a trade union. There are policies and processes in place to prevent bullying and harassment, to ensure the safeguarding of children and vulnerable adults, to support staff members affected by issues including domestic violence and to provide a positive and supportive working environment for people with mental health conditions. In the last year we’ve increased the ways we listen to staff, held open house sessions for staff to set the agenda and ask questions of management, held listening lunches all with aim of adopting a more open culture.

Comic Relief has a strong commitment to developing the diversity of its staff through fair and open policies in recruitment and throughout the employee life cycle, training and practical action. This includes encouraging applications from disabled people as well as people from varied socio-economic backgrounds. Comic Relief takes every reasonable measure to adapt premises and working conditions so that all who work for us can access training and skills development opportunities. Staff engagement is very important to us. We conduct an annual staff survey to get anonymous feedback from across the organisation and hold monthly staff meetings. All employees are invited to the annual staff conference and are kept up to date on news and events through weekly email updates and monthly staff meetings. Our CEO and Executive Directors have ‘open door policies’ to hear staff comments directly. We are continually looking for innovative ways to communicate with our staff in order to create a sustained culture of engagement and openness.