About the Charity
Chen Su Lan Methodist Children’s Home provides shelter, care and protection to boys and girls between 5 and 21 years old who come from low income, broken, dysfunctional or abusive families in Singapore.
7 VITAL SIGNS
Vital Sign 1: Financial Health
Ratio of Liabilities to Assets
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This ratio tells us how much of the charity’s assets come from borrowing money or other sources of debt. The lower the number, the more financially strong the charity.
According to our analysis, this number indicates excellent financial strength
The charity is in a very good position to pay off what it owes (to staff, vendors etc.) if the debts suddenly fall due
The charity has been accumulating cash, which is a good sign for its short term financial health
Working Capital Ratio
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“If the charity’s short-term debts suddenly become due immediately, will it be able to pay them”?
A ratio higher than 1 means that the charity has enough liquid assets like cash that can be used to meet its short term debts. The higher the ratio, the more resilient the charity is.
Increase in Cash and equivalents
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This tells us about the financial health of the charity. No matter how much surplus the charity makes, it is likely to collapse if it runs out of cash to pay its bills. A positive value is a healthy indicator
Net Surplus over 3 years
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“How much surplus did the charity have at the end of the year, subtracting its expenses?”
While charities are non-profits, a financially healthy charity should still carry over some surplus each year to grow its reserves. This is important, so that the charity can continue to run even if its funding sources are affected.
A charity that continues running deficits yearly would deplete its reserves and be unsustainable in the long run
This charity is financially sound, and has been carrying over a surplus every year in order to maintain enough reserves.
The sharp increase in 2020 was due to the curtailment of many of its activities as a result of the pandemic. As a result, its expenses fell, and it was able to retain more of its income to be carried over to 2021. However, some of the surplus will have to be returned to various social welfare funds, as they were not spent in 2020.
The pandemic is a timely reminder of the importance of maintaining enough surplus, so that the charity has enough money to meet exigencies if they are suddenly unable to fundraise and generate income.
Vital Sign 2: Sources of Income
Charities receive money from a variety of sources which include public donations, grants and government contracts. What are this charity’s sources of income over the years?
Sources of Income in 2018-2020
What do these mean?
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This includes public cash donations, and non-cash gifts in kind by the public
Donations from the public account for 20% of the charity's income stream. The charity is quite reliant on public donations
This charity generates some income from childcare fees it charges in running its childcare services.
A very small percentage of the income comes from the fees it charges for childcare. The charity is more reliant on other sources of income
This include social welfare grants from various sources such as the government, Tote Board, Community Chest etc.
The charity receives program grants as part of funding agreements signed with MSF and NCSS. The charity also receives subsidies from ECDA for each child enrolled in the childcare program, which reduces costs of childcare fees payable by parents.
The amount of funding from these sources has remained relatively stable, which is a good sign as it indicates financial stability
This includes income not recognized in the categories above, including interest earned from keeping cash in the bank.
There was a sudden jump in this category in 2020, because the home received a one-off grant from the Bicentennial Community Fund support from the and Covid-19 Job Support Scheme.
Sources of Income in 2020 - Our Analysis
Chen Su Lan Methodist Children’s Home received $$4,804,660 from various social welfare grants. This represented 58.8% of the total income receipts for the year. The large amount of grants indicates that these organizations endorse and support the charitable work done by the Home.
Despite being supported by grants, a significant portion (about 1/5ths) is derived from public donations.
The “other income” category was exceptional due to COVID-19 support for charities in this year.
Vital Sign 3: Sources of Expenditure
Charities spend money on various sources including their charitable programmes, staff expenses, administrative costs, etc. What are the biggest contributor's to the charity's spending over the years?
For this charity, the major contributors of expenses were programme and home expenses, as well as salary expenses
Programme and Home Expenses
The numbers fell slightly in 2020.
For Programme Expenses, the dip was a result of activities which were curtailed during the year due to the Covid-19 pandemic.
The dip in Home Expenses was attributed primarily to lesser donations-in-kind received as there were lesser donors and visitors to the Home.
The Staff expenses rose significantly in 2020, compared to previous years.
The centre recruited more staff towards the end of 2019.
In 2020, the staff recruited more contract staff to help out in the dormitories, due to split-team arrangements imposed by Covid-19 measures.
Over the past 3 years, the centre has added a therapy team for the clinical work to be done for the children. The case workers in the centre are also more qualified with either a bachelors or master’s degree.
Sources of Expenditure in 2020 - Our Analysis
Expenditure on fundraising was minimal this year, due to restrictions on fundraising brought by the pandemic.
Overall, the increase in expenditure for staff salaries demonstrates that the centre is expanding its operations to provide better quality services for its beneficiaries, which is a good sign.
We anticipate that in the future, with the lifting of activity restrictions imposed by COVID-19 measures, the charity’s expenses will continue to increase. Apart from the above, the charity also incurs expenses in upkeep and maintaining its premises. The charity will continue to require more income to sustain its operations and serve its residents
Vital Sign 4: Fundraising Efficiency
“How much does the charity spend in raising donations from the public?"
The lower the figure, the more efficient the charity is in raising public donations. A lower number is generally a positive sign, as it means less wasted costs in fundraising.
Fundraising Efficiency over the years
The spending on fundraising declined sharply in 2020, due to the charity being unable to host public fundraising events as a result of the pandemic. This figure should be viewed as an outlier.
In the preceding years, the figure has been relatively low – this is a very good sign as it shows that the charity is not spending excessively without return in obtaining donations from the public.
Vital Sign 4: Fundraising Efficiency
Vital Sign 5: Spending on
“What proportion of the charity's spending goes to direct outcomes?"
We are interested in knowing how much of our donation goes to the actual beneficial outcomes that beneficiaries enjoy. The greater the figure, the more likely every dollar we donate directly goes to benefitting the charity's beneficiaries.
For this charity, the programme, home and salary expenses directly go to benefitting the residents of the home. We will look at this figure over the years.
Over the years, the proportion of the major components of the costs (staff costs and programme costs) have been quite stable.
Quite a significant part of the expenses come from staff costs, which are an essential part of the centre’s services. The centre employed 88 staff as of the end of 2020, with about 60% being involved in the direct care of children and youth, another 10 staff involved in childcare, and the rest involved in corporate or support staff roles.
In our view, this figure is the greatest strength of the charity - the vast majority spending goes to direct outcomes for its residents. Donors can be assured that their donations will have a direct impact on the residents of the home.
Vital Sign 6: Benefit Received per Beneficiary
"How many beneficiaries did the charity help?"
In assessing how impactful a charity is, it is always useful to look at how many beneficiaries benefitted from the charity. This also helps to put the charity's needs and expenses in perspective - a charity that provides more services, or serves more beneficiaries would naturally require more donations and funding.
In 2020, the charity served a total of 90 residents and their families
The charity currently houses 69 residents in the home. It continues to provide post-discharge care and support for its former residents
In 2020, through the Home's education programmes, 13 candidates passed their national examinations and were posted to the secondary school or higher education institution of their choice.
Vital Sign 7: Non-Financial Needs
"Apart from donations, how else can I support this charity?"
Currently, the Home has about 93 volunteers serving in various capacities
Donations in kind
Apart from financial donations, the charity also appreciates donations of meals and groceries