It's 2019. This was the year that Boris Johnson became Prime Minister of the UK after the resignation of Theresa May.
This post continues the series following the large gifts than Soul Survivor received. For a better sense of the narrative, start with part 1.
Where were we? Yes, that's it: the £500,000 donation.
Let's begin by focusing on the location for that gift: the Soul61 charity.
Here we find the donation listed amongst the other gifts for their 2018-2019 financial year:
(Source: Total exemption full accounts made up to 31 August 2019, Soul61 filings at Companies House, page 11)
Later in the report we find details of the spending:
"Soul61 received a further donation of £500,000 from a donor wishing to support the work of various Soul Survivor activities, to be used at the discretion of Mike Pilavachi. The funds were paid into Soul61. During the year, £110,000 was paid to Soul Survivor Watford to be used towards the reconstruction of the Watford church"
(Source: Total exemption full accounts made up to 31 August 2019, Soul61 filings at Companies House, page 14)
Can we see that money arrive at the church? No. As explained in the last post, the donations to D & J M Morgan Trust (the charity behind the church) aren't itemised, even those from other organisations.
All we know is that the payments were made by the end of the Soul 61 financial year: 31st August 2019.
By that point we've seen the following gifts from YTL Utilities:
£100,000
£100,000
£500,000
A total of: £700,000
And we've seen the following money spent:
£75,000 filming festival session
£3,000 filming festival sessions
£40,000 church building fund
£3,538 supporting potential leaders' travel to events
£110,000 church building fund
That means the total expenditure from those donations to Soul61 by September 2019 was: £231,539
And what amount was spent on young leaders? £3,538
That's it.
2% of the money spent so far has gone on young leaders.
It's looking more and more like there are other reasons that gift was paid to the Soul61 charity.
Why didn't they pay this third gift to K & J M Morgan Trust? They'd already began the building project by the time the gift had arrived, so they knew about that need. It was unrestricted, so they wouldn't lose flexibility if they subsequently changed that decision.
The leader who never left
In the 2018-2019 Soul61 report I notice something I missed in previous reports: Liz Biddulph gets a mention. In the 'Related parties' section, the report says:
"Andrew Croft and Ali Martin are also trustees of Soul Survivor Ltd, and Mike Pilavachi and Elizabeth Biddulph are employees of Soul Survivor."
Now, back in 2014, the Soul Survivor report told us this:
(Source: Total exemption full accounts made up to 31 December 2014, Soul Survivor filings at Companies House, page 2)
Since only Mike Pilavachi and Duncan Layzell have been listed as executive directors, she must have left her old role. I mistakenly assumed she had left Soul Survivor entirely.
The final summer festivals
Let's backtrack to the start of 2019, and turn our attention to the Soul Survivor charity.
What a ride this year must have been for them. The structure of the year matched the previous couple. But clearly it must have been emotional to close things down, and the act of closure brought some unusual situations.
This year, the charity took an exceptional approach to budgeting:"The trustees decided that 2019 would be the last year of events and approved a deficit budget for 2019 support by the reserves brought forward."
(Source: Total exemption full accounts made up to 31 December 2019, Soul Survivor filings at Companies House, page 12)
Along with their typical annual costs, they also had to spend money on closing down. Their report for 2019 lists 'Exceptional closure costs' of £113,374.
This year, total income was £3,792,663. Total expenditure was £4,036,410. Whoa! Can the reserves take that much overspend?
Yes, it appears they can. They finished the year with 'General funds' of £231,784.
In 2019 Soul Survivor continued their considerable support of Soul61. More on that in a minute.
Unusually, the charity also gave a gift to Youthscape of £50,000. Who? Youthscape are a Luton-based charity with many Soul Survivor connections. Luton and Watford are 20 miles apart, a fact that I imagine also helped relationship building between the two organisations. Youthscape were planning to start a summer festival at the time of the closure announcement, and it seems Soul Survivor decided to support them in this.
Who got paid over £90,000?
This year Soul Survivor listed a reduced headcount: 16 staff. I think that's because these totals are a yearly average of employee numbers, and because the charity had a phased close-down during the year.
They spent £561,799 on staff costs in 2019.
Mike Pilavachi resigned from his role as joint Executive Director on 30th September, Duncan Layzell remained in post throughout the financial year.
One staff member was paid a salary, including redundancy, between £60,000 and £70,000. Sounds familiar. But another staff member was paid a salary, including redundancy, between £90,000 and £100,000.
Wow.
I'd assume that the two co-leaders of the charity get paid the most of all the employees: Pilavachi and Layzell. That normally happens, as they have the most responsibility. Pilavachi is also an employee of Soul Survivor Watford church. Maybe he's only part time here, and so one of his full-time colleagues has a larger salary from this charity. So, maybe these salaries are Layzell and someone else.
Compared to the year before, one of these salaries rose significantly into the £90,000-£100,000 pay bracket. I imagine this was a severance package - it would be rare for a charity employee to get a 20-40% pay rise. That would rule out Layzell, who is still listed as an employee of Soul Survivor into 2020.
So who got paid over £90,000 in 2019?
If it was Pilavachi, then we should be concerned, because in that case the deal would have been approved by the trustees. And some of them have conflicts of interest. There are the trustees of Soul Survivor in 2019:
- Graham Cray
- Andy Croft
- Ali Martin
- Christopher Lane
- David Westlake
- Jessica Jones
- Keith Johnson
As detailed in a previous post, Croft has many conflicts of interest. The largest of these seems to be his writing partnership with Pilavachi. I've also talked about Ali Martin's conflicts of interest previously. The most significant seems to be that in the church, in 2019, Ali Martin reports to Pilavachi. The prospect of an employee approving their boss's redundancy? Seems questionable.
So it's important to ask the question, was who was paid over £90,000 in 2019?
A mysterious money move
While we're talking about staffing I'd like to bring up another unusual detail. Remember how each year some Soul Survivor staff do work for Soul61? Soul61 are charged for the staff time that entails. Normally that finger is around the £10,000 mark.
Which Soul Survivor employees is this for? The 2018-2019 Soul61 report tells us:
"Mike Pilavachi, Ali Martin and Andrew Croft also provided some of the teaching to the students and interns. The charity also employed two course assistants to manage the course, arrange further teaching and provide pastoral care for the students."
(Source: Total exemption full accounts made up to 31 August 2019, Soul61 filings, page 2)
Martin and Croft are employees of the church in 2019, so recharges for them would be listed separately. As such, the Soul Survivor charges look like Pilavachi time working for Soul61.
This may be a slight simplification. Maybe this charge covered a little time from one or two other Soul Survivor staff as well.
Anyhow, several strange things happen with these recharges in 2019.
Firstly, there's a contradiction.
In the 2018-2019 Soul61 filings, the financial year that ends 31st August, we are told:
"Certain members of Soul Survivor perform services for Soul61, which are recharged at cost. The amount of recharges for services provided in 2019 was £11,360..."
(Source: Total exemption full accounts made up to 31 August 2019, Soul61 filings, page 14)
But, in the 2019-2020 Soul61 filings the authors say:
"Certain members of staff of Soul Survivor perform services for Soul61, which are recharged at cost. The total amount of recharges for services provided in 2019 was £29,676 (2019: £43,652)"
(Source: Total exemption full accounts made up to 31 August 2020, Soul61 filings, page 18)
So in the Soul 61 2018-2019 financial year how much money moved that charity to Soul Survivor for staff time? £11,360 or £43,652?
That's weird.
Let's assume the former number is correct, as it's more consistent with the previous reports. If we look further at the 2019-2020 Soul61 reports, the amount charged for staff time jumps. In 2019-2020 the charge is £29,676, 260% of the year before.
That's also weird.
And then, the timing is strange: as we've seen Pilavachi resigned on the 30th September. The start of the 2019-2020 Soul61 financial year is 1st September. He's only in post for 30 days, and yet the charge for the whole year goes up by 260%.
That's also weird.
And then, the purpose is strange: I've heard that Soul61 gap year attendees arrive in November each year. So Pilavachi wouldn't be around for any of the gap year lectures. Who would be listening?
That's also weird.
And then, as Steve Lewis spotted previously, for the 2019/2020 financial year Soul61 changed the person who was their independent examiner.
That's also weird.
For 8 years Soul61 had hired FB Hay Associates Ltd of St Albans to be their independent examiner. Charity Commission rules require them to do this. Their guidance says:
"The role of the independent examiner is to provide an independent scrutiny of accounts. The examiner plays a role in maintaining public trust and confidence in charities"
(Source: Independent examination of charity accounts: Directions and guidance for examiners (CC32))
You see the name FB Hay Associates Ltd on every Soul61 report from 2011-2012 to 2018-2019. And a corresponding charge for their services: £1,200 in 2018-2019.
And then in 2019-2020 Soul61 change the provider. The independent examiner for that year is listed as Wyatt & Co Chartered Accountants of Leeds. Their charge for this service? £1,200.
Maybe they changed to get improved service. Or maybe FB Hay Associates were putting their prices up.
But, all these weird things, they add up. What are the chances of all of them happening at the same moment? Also do you notice that the discrepancy in the new report makes the new recharge look like a 32% drop rather than a 160% increase?
It is possible someone was trying to move £15,000 from Soul61 without others noticing, and this was how they achieved that.
Problems with Soul Survivor Trading
This year Soul Survivor Trading generated sales of £484,144. They had costs of £514,273. They made a loss of £30,129 (These figures are taken from page 24 of the 2019 Soul Survivor report)
Now, this presents a problem. Because, if I look at the Companies House records for this year, I discover that this company had an equity of £-65,810.
The company generated most of its sales at the summer festivals. If those sales no longer happened, where would the money come from to dig them out of this hole?
At this point I start thinking... those large gifts, couldn't you use them to pay off the debts here? It's hard to see a prospect of the company breaking even: they had made a loss 4 of the previous 5 years.
Over at the Church, the building programme talked about in previous years hit a snag: where would the church meet while the building work was happening? Eventually they found a solution, phasing the work in a clever way, and building was planned to begin the following year: in spring 2020.
In 2019-2020, the income of the church was £1,503,395. Of this money £469,532 was restricted, donations for a specific purpose - maybe for the building programme. They spent £1,030,924.
This financial year the church gave £12,000 to Soul61. No surprises there.
They also give £4,915 to Soul Survivor Ministries. This is the first gift I've seen going from the church to the charity. We can't verify whether that arrives at the charity in 2019 or in 2020 as they don't itemise unrestricted gifts. I imagine it does.
I also notice a gift to 'New Frontiers' of £2,487. That's a different church movement outside of the Church of England. There are many social media posts of Pilavachi speaking at their conferences. This gift may be connected with that, or it may be a donation to a particular church in the movement.
At this point I'd normally talk about staffing levels at the church. However, they go through abrupt change two thirds of the way through their financial year at the start of 2020. More on that next time.
Soul61 begin a new financial year in September 2019. As we discussed earlier, one early event in that year was the resignation of Mike Pilavachi from the Soul Survivor charity. Will that event change the Soul61 year? After all, he leads the work with his interns.
It appears not. Four interns join the programme this year. Seems like business as usual. We also had 18 gap year participants, paying the usual amount: £6,500 each.
And Pilavachi continues speaking at festivals. In October of 2019 he spoke at the Multiply Conference Festival, run by Catalyst, one of the New Frontiers movements. Here is one of the promotional tweets from Catalyst earlier in the year:
Concerns about the summer festivals collection
I'm a little confused about Soul61 income this year.
We're used to seeing money from the Soul Survivor collections arrive in Soul61. The collection happens at the summer events, which are held in August.
The Soul61 financial year ends on 31st August. Looking back, the money seems to arrive at Soul61 after August, meaning the next Soul61 financial year.
The 2019 Soul Survivor report mentions this collection on page 10:
"Total collection of £122,033 contributing £40,678 to each of Soul Action, Central Asia and Soul61"
Later on in that same report, we see this £40,678 joining some other funds set aside for Soul61:
(Source: Total exemption full accounts made up to 31 December 2019, Soul Survivor filings at Companies House, page 43)
So the total amount of these restricted funds leaving Soul Survivor for Soul61 is £67,704. Do you follow?
If we flip back earlier in the report we see this amount combined with the a £12,000 gift from the charity, and £5,900 from the Central Asia fund:
(Source: Total exemption full accounts made up to 31 December 2019, Soul Survivor filings at Companies House, page 43)
So, in total Soul Survivor moved £85,604 to Soul61.But.
But, when I look at the Soul61 report the numbers don't match. Take a look at this extract:
(Source: Total exemption full accounts made up to 31 August 2020, Soul61 filings, page 12)
Firstly, the amount listed for 'Allocation of collection' is 0. That's not right, and is inconsistent with the presentation of figures from previous years.
This may be a mistake.
This could be deliberate, to distance the collection money from the restriction that it be given to 'young leaders' so it can be used for other things. As far as the Soul61 filings are concerned, these are now general funds with lots of flexibility.
That's a problem, because the Charity Commission is strict about gifts being used in the correct way. In the Fundraising Code of Practice they say:
"You must make sure that donations are used to support the cause in line with any conditions attached to the donation. This [sic] may be conditions the donor sets when making the donation or representations you make (either verbally or in fundraising materials) about how the money will be used."
This discrepancy also happens to occur at the moment when Soul61 changed their independent examiner.
I'm assuming that the money didn't vanish, that it became part of the £128,732 from Soul Survivor Ministries labelled 'Unrestricted funds'. It's unclear where the rest of that money came from. Perhaps there is another donation in 2020, before the 31st August year-end?
Wherever it came from, that is a huge amount. Most years Soul61 are given an unrestricted donation of £12,000-£15,000. In 2019-2020, the amount is ten-fold: £128,732.
Why is that much money being moved into Soul61? Should it be paying off the debts of Soul Survivor Trading Ltd? Why does Soul61 need any more money?
In their 2019-2020 financial year, Soul61 listed two employees with a combined salary bill of £29,676.
There were no more large gifts from YTL Utilities.
Soul61 moved some large sums of money out. Let's look at them in the next post, as they tie in with other events in 2020.
Liz Biddulph resigned as a Soul61 trustee on the 1st November, after 8 years.
Speaking of Liz Biddulph, she signed off the 2019 trustee report for Soul Survivor International. It listed no income or expenditure, and £3,351 of reserves. No change there from the previous years.
What a year, eh? It took me a lot of time to line up everything that was going on.
In the next post we turn our attention to 2020, and the biggest single spend of the YTL gifts so far:
Following the money - part 4: a £200,000 transfer of staff and a mystery £20,000
Sources
This blog draws extensively from the annual reports of the charities. There are too many references to footnote, but you can find the whole reports here:
Soul61 filings at Companies House
Soul Survivor filings at Companies House
Soul Survivor Trading Limited filings at Companies House
K & J M Morgan Trust report from 2018-2019
K & J M Morgan Trust report from 2019-2020
