Following the money - part 4: a £200,000 transfer of staff and a mystery £20,000

This is the fourth part of an effort to follow the Soul Survivor money flows. You may wish to start with part 1.

We begin 2020 focusing on the church, specifically the charity it's underpinned by: K & J M Morgan Trust.

Why? Because as 2020 began, and news spread of an unknown virus in China, the church took on 6 extra employees. Yes, 6.

In their 2018-2019 annual report they declared 18 employees. In the 2019-2020 follow-up they declared 24 employees - growth of 33%.

We find their explanation in the 2019-2020 report:

"Soul 61 Salary Bursary: In September 2019 staff were transferred from Soul Survivor Ministries to K J [sic] Morgan Trust due to the dissolution of Soul Survivor Ministries. Funds were donated from Soul Survivor Ministries to meet the cost of the staff transferred for as long as funds are available"

(Source: Charity Commission filings of K & JM Morgan Trust 2019-2020, page 30)

The bursary that's not a bursary

I don't know quite where to start with this. Firstly, why is it called the 'Soul61 Salary Bursary'? These are Soul Survivor staff, moved from that charity to the church. 

The word 'bursary' is defined by the Cambridge dictionary as:

"an amount of money given to a person by an organization, such as a university, to pay for them to study"

Now, you could have a Soul61 Bursary, which was based in the Soul61 charity for young leaders. It could be used for gap year delegates who can't afford the costs. That would be in keeping with the definition of the word.

But finding this concept in the church, and adding the word 'salary', and using it to pay for employees moved across from the Soul Survivor charity? That's misleading.

33% more staff

And what about transferring staff? How does that work?

One situation where staff growth can happen: a charity expanding an area of work as part of a strategic plan. For example, they might significantly change their approach to fundraising and hire more staff to do so. In this case they can justify the extra spend by saying, "in the medium-term these staff will pay for themselves as donations increase".

For a major expansion in headcount, I'd expect to see some details in the annual report. What was the reason for the expansion? How would they fund the new posts in the future?

Are those details here? No. And yet the report is detailed enough to mention their marriage preparation course and the two Alpha courses they ran in the course of 2020. 

I'm not an HR professional, or a charity leader. I'm sure there are other reasons one might expand the number of staff.  If you know any, let me know (contact details are on the right of this post).

And then there's that strange phrase:  "as long as the funds are available"? 

Really?

Surely they knew what these people were paid, and could work out the end date and set up appropriate contracts. That would give the employees stability,  and motivation to move organisation rather than look for other work. 

The funds that accompany the staff are listed: £220,882. According to this report, £98,442 of this money is spent before year-end in March 2020. It doesn't look like funds were going to be available for long.

If we look to Soul61 we find the answer in the 2019-2020 report:

"The Charity made grants of £250,000 to Soul Survivor Watford in support of extensions to the church building [sic]£50,000) and to fund additional staff salaries (£200,000). The grants were made from a donation that was given to Soul61 on an unrestricted basis and with the donor's permission to fund projects outside of Soul61's core leadership course."

(Source: Total exemption full accounts made up to 31 August 2020, Soul61 filings at Companies House, page 4)

There's that money from YTL Utilities again. So that's why it's called the "Soul61 staff bursary". 

Can you see what they did here? The donor didn't specify how the money should be spent. But by paying the donation through Soul61, an unrestricted (flexible) donation goes in:

(Source: Total exemption full accounts made up to 31 August 2020, Soul61 filings at Companies House, page 13)

It then becomes a restricted donation going out to K & J M Morgan Trust:

(Source: K & J M Morgan Trust report from 2019-2020, page 30)

The purpose of restricted donations is to honour donor wishes. At best, this is against the spirit of that. At worst, it's possible that this approach breaks Charity Commission rules. 

There is another important dimension to this. As I've previously mentioned, the unclear terms that accompanied this donation say in one place:

"Soul Survivor received [sic] 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."

(Source: Total exemption full accounts made up to 31 August 2019, Soul61 filings at Companies House, page 14)

With that in mind, we should ask: did Pilavachi use part of the YTL donation to justify an expanded salary from the church?

Funding these 6 posts could provide a pretext for the church to increase his salary, as the organisation had 6 more people who needed leading. 

By making the money restricted, the church would be forced to use the money that way by Charity Commission rules.

But the restriction didn't come from the donor. It either came from Mike Pilavachi or from his fellow Soul61 trustees.

In part 3 of this series, we saw funds moving through Soul61 losing their restriction (the collection money). And now we have funds moving through Soul61 to apply a restriction the donor never specified.

The Soul61 charity is pretty useful for this sort of thing, isn't it? Hmmmm.

At this point, can I remind you that Pilavachi was an accountant until the age of 29? His biography on this Soul Survivor page tells us:

"Mike studied at Birmingham University before working as an accountant at Harvey Nichols until the age of twenty nine,... "

You'll also notice that the money doesn't quite add up. Another £20,882 arrives from somewhere to join this money in the 'Soul61 Salary Bursary'. Maybe that's the destination for that mysterious money move we looked at in part 3?

By the end of the Soul61 financial year on the 31st of August, we can see the following picture:

Donations from YTL Utilities: £700,000

Expenditure from these donations:

£75,000 filming festival sessions

£3,000 filming festival sessions

£40,000 church building fund

£3,538 supporting potential leaders' travel to events

£110,000 church building fund

£50,000 building works

£200,000 additional staff salaries

Total expenditure so far is [drumroll]: £481,539

You know where I'm going next, don't you?

If £3,538 was spent on young leaders, that would by 0.7% of the gifts spent that way. 

And yet the money from YTL Utilities was paid into Soul61 - the charity focussed on young leaders. I'm going to ask the usual question: why?

Post-festival life

While the church was taking on the extra staff, Soul Survivor Ministries was entering a new phase. As their report says:

"Soul Survivor stopped operating conferences in 2019; during 2020 the Executive Director and its trustees achieved its objects [sic] by making grants to similar charities with similar objects [sic]." 

Where did these grants go? To very familiar names:

£100,000 for Soul61? That's a lot of money. And there's no stated plan for its use. There's no mention of an expansion of the gap year programme, for example.

I think we've found where that extra unrestricted money came from that we noticed in the previous post.

By the way, remember that these numbers are from annual reports of charity activity. This £100,000 may have been one payment, or a number of small payments between January and September. 

The report this year was different. With a smaller income they were no longer required to have an audit. Instead they chose the cheaper independent examiner option, as Soul61 did. Do they pick the new independent examiner they found in Leeds in the autumn of 2019? No, they do not. 

There's a big governance change for the charity this year:

"Following the decision to stop operating national conferences, those trustees who served the charity faithfully for a number of years resigned; the trustees appointed this year were all trustees of Soul Survivor Watford (formerly the K J M Morgan Trust)."

(Source: Total exemption full accounts made up to 31 December 2020, Soul Survivor filings at Companies House, page 2)

One result of these changes: after 20 years as Executive Director of this charity, and 9 months after his resignation from that role, Mike Pilavachi had formal power again. This time he was a trustee.

Question - why didn't they close the charity? It seems pretty clear they have stopped its work. That's why all the staff have moved on.

In 2020 the total income of the Soul Survivor charity was £24,956 - a world away from the previous years. Expenditure was £231,356 (mostly from the grants mentioned above). The balance sheet gives an equity of £24,374, of which £6,674 was 'cash at bank or in hand'. 

In their 2020 report they list a single employee - Executive director Duncan Layzell. But, the salary bill this year is unusual. Costs are listed as follows:

"Wages and salaries: £42,419

Social security costs: £5,799

Other pension costs: £6,249"

Strangely these aren't totalled up in this report. We can do that ourselves, and get a figure of £54,467.

Side note: do you see how this is less than £60,000? Does that mean Duncan Layzell wasn't one of the two staff members who earned £60,000-£70,000 in 2018? Even though he was the joint leader of the charity?

Anyhow, the report lists those 3 figures. And then it says: 

Costs recharged: £45,210

This is strange. It reads like Layzell was paid by Soul Survivor, but then Soul Survivor charged someone else for this time.

The difference is paid by Soul Survivor: £9,257

I've checked the reports of Soul61 and the church. I can find no record of this cross-charge.

This year less detail is given about the performance of Soul Survivor Trading, only this paragraph: 

(Source: Total exemption full accounts made up to 31 December 2020, Soul Survivor filings at Companies House, page 14)

Neither this report, nor the Soul Survivor Trading filings give any details of the profit or less of the business.

My question from the previous post remains: without events to sell products at, how will Soul Survivor Trading get out of this financial hole? 

Why not use some of the charity's funds for that instead of moving them to the church and Soul61? Maybe there is some sort of charity commission rule that prevents this.

The annual report for Soul Survivor Watford features Covid extensively. Lockdown rules forced the church to halt their Sunday services and stream via YouTube. That's a familiar story for many of us. They bought new equipment to aid this streaming, which cost £65,000.

The building project was also disrupted by Covid. Work halted in March, and then restarted in November with new plans to expand the number 7 building.

As you can imagine Mike Pilavachi's travel plans were disrupted by the pandemic: 

"Our senior pastor Mike Pilavachi had to postpone and cancel many of his overseas travelling engagements this year. Instead he has carried out many speaking engagements via Zoom this year."

(Source: Accounts Reporting Year 31st March 2021, Soul Survivor Watford filings at the Charity Commission, page 10)

He continued to speak in the UK, albeit in a remote capacity: 

A new charity

The governance for the church went through a significant change in 2020. After 19 years operating through a charity in the name of two members (K & J M Morgan Trust) they set up a charity that matched the name of the church. 

The new charity was called 'Soul Survivor Watford'. Its nature means that filings are only found via the Charity Commission website, there are no listings at Companies House.

In the first report of the charity we read that "all assets, liabilities and operations" were transferred from the old charity to the new one on 31st October 2020.

For the year from 1st April 2000 to 31st March 2021, the church lists 1 employee with a salary in the £60,000-£70,000 range. This might be one of the transferred staff, or it may be an existing staff member who received a pay rise. 20 employees are listed - 4 down from the peak we talked about earlier in the post. The total salary bill is £773,111.

There's a strange line in the report here:

'Staff costs capitalised'? This reduces the total salary bill. Maybe this is about money from the building fund paying some staff costs? 

This must have been a strange year for the young adults on the two Soul61 programmes, as the UK Covid lockdowns will have fundamentally changed the nature of those courses. They would have been quite different anyway for many of them: no final hectic month at the summer festivals.

There's something strange in the Soul61 annual report for September 2019-August 2020:

(Source: Total exemption full accounts made up to 31 August 2020, Soul61 filings at Companies House, page 3)

Can you see how the numbers don't add up here? If there were 18 gap year students, and 4 interns, why were opportunities not provided for 22 people? Is that an error, or something hidden there? 

In the year that closed in August 2000, Soul61 had 2 staff members with a total salary bill of £29,676. 

The money flow from Soul Survivor Ministries to Soul61 has a number of confusing aspects. I've tried to track the money moving across, and I've been beaten by the challenge.

Part of the complexity is that the financial years of both charities were different. The Soul Survivor financial year ran from January to December. The Soul61 financial year ran from September to August. And then, to add further complexity, the banking of the collection money varied. Sometimes it happened in August - the end of one Soul61 financial year. Other times it happened in September: the beginning of another Soul61 financial year. Sometimes part of the collection money even stayed in Soul Survivor until the following year. 

It's impossible to track the money moving across from the annual filings alone. Trust me, I've tried. 

£20,000 with an unknown purpose

The 2019-2020 Soul61 filings list an incoming £20,000 restricted gift from Soul Survivor:

(Source: Total exemption full accounts made up to 31 August 2020, Soul61 filings at Companies House, page 12)

The amount doesn't match any outgoing chunks of money, whether restricted or unrestricted, from Soul Survivor in 2019 or 2020.

When the new Soul61 financial year started in September it was a much quieter affair. The gap year programme didn't run this year. Three Mike Pilavachi interns did take part.

Soul61 made another donation from the YTL Utilities this autumn: £65,000 to Soul Survivor Watford. . It's labelled "Grant to Soul Survivor Watford for building works" in the report. 

Recognise that amount? The amount matches the money for streaming equipment that we saw arrive in the Soul Survivor Watford filing. Maybe it was the same money, albeit labelled differently. Or it could be a coincidence.

We'll pick up the rest of the Soul61 events in the next post.

The year ends with a moment of hope: in December the first UK patients start to receive a Covid vaccine.

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

Soul Survivor Watford filings at the Charity Commission

Charity Commission filings of K & JM Morgan Trust 2019-2020

Charity Commission filings of K & JM Morgan Trust 2018-2019

Uncovered: conflicts of interest in Soul Survivor's £100,000 in donations to XLP

There's a charity called XLP. It's an ambiguous name, but as you peruse their website it's hard not to be impressed by their work.

Their mission statement is:

"To engage in long-term relationships that empower young people from disadvantaged backgrounds to complete their education, avoid anti-social behaviour, and ultimately become independent and confident contributors within their communities"

Soul Survivor made a number of donations to XLP in the 2000s and 2010s. 

The first one I can find is £14,928 in 2004.

It's followed by £11,000 in 2005 and £15,457 in 2006.

These are all listed in Soul Survivor's annual filings at Companies House.

In total, they donated £99,548 over 12 years. 

So what?

Well, the problem is that Liz Biddulph became a trustee of XLP in November 2004:

(Source: XLP pages at Companies House) 

What's a trustee? According to the Charity Commission, 

"Trustees have independent control over, and legal responsibility for, a charity’s management and administration."

Trustees have a legal duty to act in a charity's best interests.

I believe Liz Biddulph was already co-leader of Soul Survivor at this point. Chris Bullivant, a former employee, mentioned this in a recent tweet. And certainly the first time the Chief Executive Offices are noted in the annual filings, in 2006, her name appears next to Pilavachi's name:

(Source: Group of companies' accounts made up to 31 December 2006, Soul Survivor filings at Companies House, page 1) 

When you lead a charity you're expected to act in the best interests of the charity, and the people they exist to help, right?

That means donations after 2004 create a conflict of interest. Are these in the best interests of Soul Survivor and in the best interests of XLP?

We can see an example of this the very next year.

Soul Survivor finished 2004 with only £49,284 in the bank. That's very low for a charity with a turnover of more than £3,000,000 that employed 38 staff.

And yet, in 2005 Soul Survivor donated £11,000 to XLP.

The charity she lead donated £11,000 to a charity she has legal responsibility for.

That year it looks like Soul Survivor made a number of staff redundant: the 2005 report only lists 25 employees. In that context was the XLP donation in the best interests of Soul Survivor?

The Charity Commission has rules about this:

(Source: The Essential Trustee)

Charities are expected to establish a process that deals with conflicts of interest. Did Soul Survivor do this? 

There would be no complications if Biddulph was donating her own money. The challenge here is that charity funds were being donated.

And that challenge grew.

Because, in 2007 Mike Pilavachi also became a trustee of XLP:

(Source: XLP pages at Companies House) 

At that point, both executive directors of the Soul Survivor charity are also both trustees of XLP. And Soul Survivor continues to give to XLP.

The next donation to XLP is £1,477 in 2008. And then £26,486 in 2011.

If both Soul Survivor's leaders have conflicts of interest, it's quite a challenge to have a process that counteracts them. However, it is possible that another trustee took on the decisions about grants in this period. 

The donations keep on going.

From 2011 these gifts were listed in the Soul Action section of the report. Soul Action is a partnership with Tear Fund. The 2016 filings provide some insight into how this worked:

No details are given about who 'the team' were. 

In 2013, it looks like Soul Survivor had another tricky year, spending more than they received in funds. They end the year with £95,499 in the bank, and their filing in 2014 has two fewer staff, which may be connected. And yet they still donate £5,400 to XLP in 2014.

I'm not saying anything bad about XLP and the work they do. I am saying there were conflicts of interest here for Soul Survivor. And did the leaders follow Charity Commission rules regarding them?

As you'd expect from trustees, the support extended to other aspects. Here is Mike Pilavachi speaking to young adults on their gap year programme:

And here he is platforming the charity at one of the summer festivals:

In 2014 Liz Biddulph stepped down as co-leader of Soul Survivor. However, as discussed in the previous post she remained a staff member. A conflict of interest may still remain in her regard, albeit of a different nature.

In 2017 Pilavachi stepped down as a trustee of XLP. 

Biddulph remained a trustee until 2020.

Since 2000 there were £99,548 in donations from Soul Survivor to XLP. All of these were made when one, or both, of the Soul Survivor leaders were trustees of XLP.

More Soul Survivor blogs

The odd lines of accountability for the Mike Pilavachi interns

Questions about a £500,000 gift and Mike Pilavachi

 

Following the money part 3: concerns about the collection, a mystery money move and who took home more than £90,000?

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

Following the money - part 2: the decision to stop the festivals and Mike Pilavachi's two jobs

This post continues my effort to follow the large gifts received by Soul61 in 2016-2019. It's best if you read the posts in order. The first post is here: Following the money - part 1: the TV connection and questions of control 

It's 2018. This is the year when the new GDPR rules about data arrived. And, in fact, costs related to GDPR show up in the annual report of the Soul Survivor charity. I do not miss the work that year entailed. 

One of the trustees resigned in January 2018 after four years: the well-known worship leader Tim Hughes.

A few months later Soul Survivor took part in Hope Bristol, an event:

"serving the local communities in Bristol on social action projects and sharing the good news of Jesus"

(Source: Group of companies' accounts made up to 31 December 2018 from Soul Survivor filings at Companies House, page 7)

It was a collective effort between Soul Survivor, the Hope organisation and local churches such as the Woodlands group. Soul Survivor took 473 young people along.

Aside from that, the programme of events that ran this year echoes previous years. Naturally Supernatural was now well established in the summer sequence. 

But this was also a momentous year for the charity. In May, they announced they were going to cease their summer festivals, after 27 years in their current form. The now-deleted message [raises eyebrow] said things like:

"We know this will come as a shock to many but we believe that God has spoken and that this is the right time for us to step aside and make space for others to rise up. This is not a decision we have taken lightly but something we have been wrestling with for a substantial amount of time.

Our leadership team and board of trustees came to this decision unanimously and believe that, after 27 years of events, 2019 is the right time for Soul Survivor to end."

I wonder if Tim Hughes, who resigned in January, agreed with this decision? 

A decision of the magnitude of closing the festival would have taken several trustees meetings to decide. Given they say they meet 3-4 times a year,  I think they'll have started talking about this late in 2017 at the latest. 

They go on to say: 

"Soul Survivor isn’t growing as fast as it once was, and it’s hard to balance budgets whilst running a quality event, but we are in a secure financial position. This really is a decision based on what we believe God is saying"

I wonder when they started discussing this action? And when the final decision was made? It's hard to imagine going through the effort of switching locations in 2017, if you knew the festivals would stop soon. 

Equally, 27 years isn't a particularly significant number. Wouldn't you stop at 25 or 30? Maybe Pilavachi's age played a part - he was 60 in 2018.

However the move came about, it was big news. The summer events represented the bulk of the work of the charity, the bulk of the income, and the bulk of the staffing needed.

Transition work began in 2018. The speakers at the summer 2018 events included people who lead other summer festivals: DTI (Dreaming The Impossible) , Limitless and the still-being-developed Satellites. I think that shows an impressive degree of organisation by Soul Survivor.

They say that bookings for Naturally Supernatural were particularly strong this year: up 19% on the year before to 3,251 delegates.

Soul Survivor reported a total income of £2,817,192. They spent £3,151,271. This loss affected their funds: at the end of the year they had £475,531 total funds, compared to £809,701 at the end of 2017. This was the third successive year making a loss. 

I can't find an explicit statement about reserves in the 2018 report, but this seems low to me - less than two months' running costs for the charity.

They list 23 staff on payroll (up from 19 in 2017) this year, with a total cost of £730,622. It seems like an odd time to grow their staff, in light of the decision to end the festivals. Wouldn't one freeze recruitment? 

Who were the staff ? Were they then eligible for redundancy payments the following year? Filling these extra posts was an 18% increase in staffing costs.

Two staff members had salaries in the £60,000-£70,000 bracket. I assume this was Pilavachi and Layzell, the joint Executive Directors. That is an assumption though.

Let's pause here for a minute here and ask a question I should have asked a lot earlier: how does Pilavachi lead both this charity and the church, and travel as a speaker? That seems an incredible amount of work. 

Here he is, speaking at the Vineyard's DTI youth event in June of 2018, one of many speaking trips he took that year:

So, was he part-time at the church, or at the charity? There's no mention of that in the reports of either organisation.

And if he is part-time at Soul Survivor, is £60,000-£70,000 an appropriate salary?

This year the charity made gifts to Soul61 of £15,000 and £27,026. 

Soul Survivor Trading made sales of £332,136 in 2018. They incurred costs of £307,543, giving a profit of £25,593. As before these figures are included in the figures quoted for income and expenditure of the charity.

Meanwhile there was a big moment for the church in June. They had a 'giving day' for the Making Room For More building project. It seems to have gone well: they received £1,900,000 in gifts and pledges.

I'm wondering about one aspect of this.  Did the leaders tell the church members about the £200,000 in donations they had received in the last 2 years from YTL Utilities? 

And did they know the £500,000 gift was coming at that stage? In the charity world you often have advanced warning of major gifts arriving. I wonder what they said on that 'giving day'.

Also, remember the £40,000 that was paid from Soul61 to D & J M Morgan Trust for building work? I can't see that money arrive at the church. I've checked the 2017-2018 report that covers until 31st March, and the 2018-2019 report that covers the rest of the year.

I have 5 years of reports for K & J M Morgan Trust. I notice that none of them detail incoming funds from other organisations. I presume they're rolled into the 'Donations' line, joining the gifts from church members.

I find this weak. It creates the situation where they itemise gifts to other organisations, but not gifts from other organisations. It's also inconsistent with the approach taken by the Soul61 and Soul Survivor charities.

In the 2018-2019 financial year, the church reported 18 employees, as with the year before.  The total salary bill was: £477,120.

This year Bob Wallington's post is not listed as being paid for by Soul61.

As in previous years, no employees of the church were paid more than £60,000. 

The total income of the church was £2,022,768, which includes the money raised on the giving day. If we remove the restricted gifts (presumably that's where the building project gifts are noted) then the total income for 2018/2019 is £963,411. Expenditure was £839,578.

And now to Soul61. In the first half of the year, the 2017-2018 cohort of Soul61 gap year students are hard at work. Their year finishes in August after the summer festivals, matching the end of the Soul61 financial year.

At this point the amount left of the first two YTL Utilities gifts is £78,461.

Can we take a moment to appreciate something? Out of just under £122,000 spent so far from the Soul61 large gifts, only about £4,000 has been spent on young leaders, which is the focus of Soul61. 

A new Soul61 financial year begins in September and in November 2018 a new cohort of 18 join, having paid £6,500 in fees for the year. Two interns also join for some, or all, or the financial year.

The Soul61 filings for the 2018-2019 financial year list two employees and a salary bill of £43,652.

Soul61 were charged £10,866 by the other charities for use of their staff time. Actually, this year they provide a breakdown. That charge was all for Soul Survivor staff time.  They made no use of staff time from the church.

And then, sometime before the end of 2018, or early in 2019, the third and largest gift arrives in Soul61.

£500,000

It's an out-sized gift for Soul61 - whose other income for the year is £170,609. 

Will any of it be spent on young leaders? We'll see in the next post that unpacks the events of 2019:

Following the money part 3: concerns about the collection, a mystery money move and who took home more than £90,000?

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 2017-2018
• K & J M Morgan Trust report from 2018-2019